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Kathmandu Wednesday February 21, 2001 Falgun 10, 2057.
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Review of Nepal-EU textile agreement stressed
Post Report
KATHMANDU, Feb 20 - Almost a year after the government introduced licensing
requirements for textile exports to the European Union (EU), officials are gearing for
reviewing the Nepal-EU textile agreement and assessing the country’s performance in
textile exports.
"The need to carry out a review arises not because the licensing
provision failed but to simplify the procedural and administrative difficulties
further," said Krishna Hari Baskota, Director General of Department of Commerce (DC),
talking to The Kathmandu Post.
The review meeting will address issues such as need to acquire license even
for sending a single unit of textile products abroad as samples. Baskota informed that the
emphasis would be to relax the licensing requirements upto a certain limit of exports.
He also said that review of the agreement is necessary to obtain feedback of
the EU. The review meeting would be participated in even by the private sector including
Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Nepal Chamber of
Commerce (NCC), Export Council of Nepal (ECON) and Garment Association of Nepal (GAN),
among others.
The meeting will review the performance of Nepal in textiles export front
ever since the licensing provision was implemented. As per the figures made available by
DC, the department, till mid-January 2001, issued a total of 3945 licenses and 8397
certificates of origin (CO).
Similarly, license to 3.2 million units of textile products worth Rs 827.72
million was issued and COs to 4.65 million units worth Rs 1126.1 million was issued.
Nepal and EU had reached an agreement on 26th March, 1999, that introduced
license system for the export of textile products falling under five major textiles
categories, of the 161 categories as classified by EU. The agreement was enforced from
March 1, 2000.
The five categories, numbered 4, 5, 6, 7 and 26, include the major exporting
textile items, such as shirts, T-shirts, light weight fine knit roll, jerseys, woven
breeches, shorts other than swimwear and trousers, blouses, jumpers and pullovers made of
wool, cotton or man made fibres among others.
The DC issues the license to the exporter on producing the order of goods or
the receipt of advance payment made by the European importer to the Nepali exporter or if
there exists a back-to-back or buy-back arrangement.
According to the agreement, exporters also have to get Certificate of Origin
(CO) of all textile items, exported to EU, endorsed by a competent government official,
which were usually done by the local chambers of commerce. The DC has been entrusted with
the responsibility of endorsing the CO, which is forwarded by the Garment Association of
Nepal (GAN) to DC through the local Chambers of Commerce.
EU had initially demanded to initiate license system for 15 categories, which
Nepal bargained down to 5. India and China are also manufacturing the textile items
falling under these categories, which they export to the European market under the quota
system. The transshipment of Indian and Chinese goods through Nepal must have prompted the
EU to pressurize Nepal entering into this Agreement on Trade in Textile Products.
An agreement has also been reached to manage exports efficiently and promote
Nepali entrepreneurs by controlling transshipments of the textile products from
neighbouring countries.
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