Nepal Trade Preferences Act

Summary: Nepal Trade Preferences Act It is the sense of Congress that it should be an objective of the United States to use trade policies and trade agreements to reduce poverty and eliminate hunger. The President may give preferential treatment to certain articles imported directly from Nepal into the U.S. customs territory if that country meets certain requirements under the African Growth and Opportunity Act, including a market-based economy and the rule of law, the protection of human rights and internationally-recognized worker rights, elimination of trade barriers to the United States, and non-engagement in activities that undermine U.S. national security or foreign policy interests or support acts of international terrorism. Nepal must also meet certain eligibility criteria for designation as a beneficiary developing country under the Trade Act of 1974.  Certain leather articles (trunks, suitcases, vanity cases, attache cases, briefcases, school satchels and similar containers) and textile or apparel articles imported directly from Nepal may enter the U.S. customs territory duty-free if:   the article is the growth, product, or manufacture of Nepal; Nepal is the country of origin of the textile or apparel article; the President determines, after receiving advice from the U.S. International Trade Commission (USITC), that the article is not import-sensitive; and   the sum of the cost or value of the materials produced in, and the manufacturing costs performed in, Nepal or the U.S. customs territory is at least 35% of the appraised value of the article at the time it is entered. Limits to 15% of the appraised value of an article at the time it is entered the cost or value of the materials produced in, and the manufacturing costs performed in, the U.S. customs territory and attributed to the 35% requirement.  The U.S. Customs and Border Protection must verify annually that textile and apparel articles imported duty-free into the United States from Nepal are not being unlawfully transshipped into the United States. The President shall establish a trade facilitation and capacity building program to assist Nepal in the export of goods. The extension of preferential treatment to Nepal shall terminate after December 31, 2025.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Nepal Trade Preferences Act''.

SEC. 2. SENSE OF CONGRESS.

    It is the sense of Congress that it should be an objective of the 
United States to use trade policies and trade agreements to contribute 
to the reduction of poverty and the elimination of hunger.

SEC. 3. ELIGIBILITY REQUIREMENTS.

    (a) In General.--The President may authorize the provision of 
preferential treatment under this Act to articles that are imported 
directly from Nepal into the customs territory of the United States 
pursuant to section 4 if the President determines--
            (1) that Nepal meets the requirements set forth in 
        paragraphs (1), (2), and (3) of section 104(a) of the African 
        Growth and Opportunity Act (19 U.S.C. 3703(a)); and
            (2) after taking into account the factors set forth in 
        paragraphs (1) through (7) of subsection (c) of section 502 of 
        the Trade Act of 1974 (19 U.S.C. 2462), that Nepal meets the 
        eligibility requirements of such section 502.
    (b) Withdrawal, Suspension, or Limitation of Preferential 
Treatment; Mandatory Graduation.--The provisions of subsections (d) and 
(e) of section 502 of the Trade Act of 1974 (19 U.S.C. 2462) shall 
apply with respect to Nepal to the same extent and in the same manner 
as such provisions apply with respect to beneficiary developing 
countries under title V of that Act (19 U.S.C. 2461 et seq.).

SEC. 4. ELIGIBLE ARTICLES.

    (a) In General.--An article described in subsection (b) may enter 
the customs territory of the United States free of duty.
    (b) Articles Described.--
            (1) In general.--An article is described in this subsection 
        if--
                    (A)(i) the article is the growth, product, or 
                manufacture of Nepal; and
                    (ii) in the case of a textile or apparel article, 
                Nepal is the country of origin of the article, as 
                determined under section 102.21 of title 19, Code of 
                Federal Regulations (as in effect on the day before the 
                date of the enactment of this Act);
                    (B) the article is imported directly from Nepal 
                into the customs territory of the United States;
                    (C) the article is classified under any of the 
                following subheadings of the Harmonized Tariff Schedule 
                of the United States (as in effect on the day before 
                the date of the enactment of this Act):


4202.11.00............................  4202.22.60...................  4202.92.08
4202.12.20............................  4202.22.70...................  4202.92.15
4202.12.40............................  4202.22.80...................  4202.92.20
4202.12.60............................  4202.29.50...................  4202.92.30
4202.12.80............................  4202.29.90...................  4202.92.45
4202.21.60............................  4202.31.60...................  4202.92.60
4202.21.90............................  4202.32.40...................  4202.92.90
4202.22.15............................  4202.32.80...................  4202.99.90
4202.22.40............................  4202.32.95...................  4203.29.50
4202.22.45............................  4202.91.00...................  .........................................
                                                                       .........................................
5701.10.90............................  5702.91.30...................  5703.10.80
5702.31.20............................  5702.91.40...................  5703.90.00
5702.49.20............................  5702.92.90...................  5705.00.20
5702.50.40............................  5702.99.15...................  .........................................
5702.50.59............................  5703.10.20...................  .........................................
                                                                       .........................................
6117.10.60............................  6214.20.00...................  6217.10.85
6117.80.85............................  6214.40.00...................  6301.90.00
6214.10.10............................  6214.90.00...................  6308.00.00
6214.10.20............................  6216.00.80...................  .........................................
                                                                       .........................................
6504.00.90............................  6505.00.30...................  6505.00.90
6505.00.08............................  6505.00.40...................  6506.99.30
6505.00.15............................  6505.00.50...................  6506.99.60
6505.00.20............................  6505.00.60...................  .........................................
6505.00.25............................  6505.00.80...................  .........................................
 

                    (D) the President determines, after receiving the 
                advice of the United States International Trade 
                Commission in accordance with section 503(e) of the 
                Trade Act of 1974 (19 U.S.C. 2463(e)), that the article 
                is not import-sensitive in the context of imports from 
                Nepal; and
                    (E) subject to paragraph (3), the sum of the cost 
                or value of the materials produced in, and the direct 
                costs of processing operations performed in, Nepal or 
                the customs territory of the United States is not less 
                than 35 percent of the appraised value of the article 
                at the time it is entered.
            (2) Exclusions.--An article shall not be treated as the 
        growth, product, or manufacture of Nepal for purposes of 
        paragraph (1)(A)(i) by virtue of having merely undergone--
                    (A) simple combining or packaging operations; or
                    (B) mere dilution with water or mere dilution with 
                another substance that does not materially alter the 
                characteristics of the article.
            (3) Limitation on united states cost.--For purposes of 
        paragraph (1)(E), the cost or value of materials produced in, 
        and the direct costs of processing operations performed in, the 
        customs territory of the United States and attributed to the 
        35-percent requirement under that paragraph may not exceed 15 
        percent of the appraised value of the article at the time it is 
        entered.
    (c) Verification With Respect to Transshipment for Textile and 
Apparel Articles.--
            (1) In general.--Not later than April 1, July 1, October 1, 
        and January 1 of each year, the Commissioner responsible for 
        U.S. Customs and Border Protection shall verify that textile 
        and apparel articles imported from Nepal to which preferential 
        treatment is extended under this Act are not being unlawfully 
        transshipped into the United States.
            (2) Report to president.--If the Commissioner determines 
        pursuant to paragraph (1) that textile and apparel articles 
        imported from Nepal to which preferential treatment is extended 
        under this Act are being unlawfully transshipped into the 
        United States, the Commissioner shall report that determination 
        to the President.

SEC. 5. TRADE FACILITATION AND CAPACITY BUILDING.

    (a) Findings.--Congress makes the following findings:
            (1) As a land-locked least-developed country, Nepal has 
        severe challenges reaching markets and developing capacity to 
        export goods. As of 2015, exports from Nepal are approximately 
        $800,000,000 per year, with India the major market at 
        $450,000,000 annually. The United States imports about 
        $80,000,000 worth of goods from Nepal, or 10 percent of the 
        total goods exported from Nepal.
            (2) The World Bank has found evidence that the overall 
        export competitiveness of Nepal has been declining since 2005. 
        Indices compiled by the World Bank and the Organization for 
        Economic Co-operation and Development found that export costs 
        in Nepal are high with respect to both air cargo and container 
        shipments relative to other low-income countries. Such indices 
        also identify particular weaknesses in Nepal with respect to 
        automation of customs and other trade functions, involvement of 
        local exporters and importers in preparing regulations and 
        trade rules, and export finance.
            (3) Implementation by Nepal of the Agreement on Trade 
        Facilitation of the World Trade Organization could directly 
        address some of the weaknesses described in paragraph (2).
    (b) Establishment of Trade Facilitation and Capacity Building 
Program.--Not later than 180 days after the date of the enactment of 
this Act, the President shall, in consultation with the Government of 
Nepal, establish a trade facilitation and capacity building program for 
Nepal--
            (1) to enhance the central export promotion agency of Nepal 
        to support successful exporters and to build awareness among 
        potential exporters in Nepal about opportunities abroad and 
        ways to manage trade documentation and regulations in the 
        United States and other countries;
            (2) to provide export finance training for financial 
        institutions in Nepal and the Government of Nepal;
            (3) to assist the Government of Nepal in maintaining 
        publication of all trade regulations, forms for exporters and 
        importers, tax and tariff rates, and other documentation 
        relating to exporting goods on the Internet and developing a 
        robust public-private dialogue, through its National Trade 
        Facilitation Committee, for Nepal to identify timelines for 
        implementation of key reforms and solutions, as provided for 
        under the Agreement on Trade Facilitation of the World Trade 
        Organization; and
            (4) to increase access to guides for importers and 
        exporters on the Internet, including rules and documentation 
        for United States tariff preference programs.

SEC. 6. REPORTING REQUIREMENT.

    Not later than one year after the date of the enactment of this 
Act, and annually thereafter, the President shall monitor, review, and 
report to Congress on the implementation of this Act, the compliance of 
Nepal with section 3(a), and the trade and investment policy of the 
United States with respect to Nepal.

SEC. 7. TERMINATION OF PREFERENTIAL TREATMENT.

    No preferential treatment extended under this Act shall remain in 
effect after December 31, 2025.

SEC. 8. EFFECTIVE DATE.

    The provisions of this Act shall take effect on January 1, 2016.