WT/L/1047  
 
29 November 2018  
(18-7561) Page: 1/3 
General Council  
12-13 December 2018  Original: English  
 
TRADE PREFERENCES  FOR NEPAL  
REPORT OF THE GOVERNMENT OF THE UN ITED STATES  
UNDER THE DECISION O F 7 DECEMBER 20161 
The following communication, dated  27 November 2018,  is being circulated at the request of the 
Delegation of the United States.  
 
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1  INTRODUCTION  
1.1.  On 7 December 2016 , the United States was granted a waiver from its obligations under 
paragraph 1 of Article I of the GATT 1994 to the extent necessary to permit the United  States 
Government to provide preferential treatment for eligible imports into the United States from Nepal .  
This waiver expires  31 December 20 25. 
1.2.  Under the terms of this waiver, the United States is required to submit to the General Council 
an annual report on the implementation of the trade -related provis ions of the program with a view 
to facilitating the annual review provided for in paragraph 4 of Ar ticle IX of the WTO Agreement. 
This report covers the period from 1 January 2018 through 30 September 2018, the most recent 
period for which data is availabl e. 
2  DUTY FREE TREATMENT UNDER THE PREFERENCE S FOR NEPAL  
2.1.  Section 915 of the Trade Facilitation and Trade Enforcement Act of 2015 ( "the Act ") provides 
for non -reciprocal preferential trade benefits through  31 December 2025 for certain US imports from 
Nepal th at meet specific eligibility criteria. These   preferences are provided to assist Nepal in its 
recovery from a devastating earthquake and  its aftershocks in April 201 5. Since  1976,  the United 
States has granted tariff preferences to developing countries,  including Nepal, under the Generalized 
System of Preferences (GSP) program. Section 915 of the  Act expands these tariff preferences to 
make an additional 77 eight digit tariff lines  eligible for  duty-free treatment if the President 
determines that certain el igibility requirements are met. The trade preferences were implemented 
on 15 December 2016.  
2.2.  Section 915(e) of the Act requires the President to monitor, review, and report to Congress on 
the compliance of Nepal with the eligibility requirements in subsecti on (b)(1). Under 
Section  915(b)(2) of the Act, the President may withdraw, suspend or limit  preferential treatment 
to Nepal if Nepal does not meet the eligibility criteria.  
2.3.  This program builds on an existing framework of programs intended to assist Nepal's  economic 
development. In particular, the United States and Nepal signed a Trade and Investment  Framework 
Agreement (TIFA), which entered into force in April 2011. One of the main objectives of the TIFA is 
to expand trade,  investment and technical c ooperation and to strengthen economic relations 
between the parties.  
                                                
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  3  PERFORMANCE  
3.1.  In 2017, US imports from Nepal were US$92 million, and US exports to Nepal were 
US$76  million. As the trade preferences were implemented on 15 December 2016, the trade data 
for the preferences is limited. Through the first nine months of 2018, US imports under the Nepal 
preferences were approximately US$2.36 million , a 36 per  cent increase compared to the same 
period in 2017.  Total US imports from Nepal during this same period were US$71.7 million.  
3.2.  The three largest categories of goods entering the preference program were hats and headgear, 
shawls and handbags. The following table provide additional detail on US imports from Nepal for the 
first nine months of 2018 . 
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  WT/L/1047  
 
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  TABLE 1 
LEADING US IMPORTS FOR CONSUMP TION UNDER NEPAL PREFERENCE PROVISIONS , 
JANUARY – SEPTEMBER 2018 
Note:  Due to  rounding, figures may not add to totals given . The abbreviation "nesoi" stand s for "not 
elsewhere spe cified or included. "  
Source:  Compiled from official statistics of the US Department of Commerce.  
 
__________  HTS number  Description  Value  
(Thousands of 
USD)  
6505.00.30  Hats and Headgear, of wool, knitted or crocheted or 
made up of knitted or crocheted fabric  664 
4202.92 .15 Travel, sports and similar bags with outer surface of 
cotton, not of pile or tufted construction  385 
6214.20.00  Shawls, scarves, mufflers, mantillas, veils and the 
like, not knitted or crocheted, of wool or fine animal 
hair 274 
4202.22.45  Handbags with or without shoulder strap or without 
handle, with outer surface of cotton, not of pile or 
tufted construction or braid  120 
5703.10.20  Hand-hooked carpets and other textile floor 
coverings, tufted  109 
6505.00.40  Hats and headgear, of wool, made up from felt or of 
textile material, not knitted or crocheted or made up 
from knitted or crocheted fabric  98 
4202.32.40  Articles of a kind normally carried in the pocket or 
handbag, with outer surface of cotton, not of pile or 
tufted construction  64 
4202.92.20  Travel, sports and similar bags with outer surface of 
vegetable fibbers, excl. cotton, not of pile 
construction  58 
6216.00.80  Gloves, mittens  and mitts, not knitted or crocheted, 
of wool or fine animal hair, nesoi  55 
6505.00.90  Hats and headgear, of textile materials (other than of 
cotton, flax, wool or man -made fibers), nesoi  46 
5702.91.30  Floor coverings, not of pile construction, woven not 
on power -driven loom, made up, of wool or fine 
animal hair, nes oi 44 
5701.10.90  Carpets and other textile floor coverings, of wool or 
fine animal hair, not hand -hooked, not hand knotted 
during weaving  33 
6505.00.50  Hats and headgear, of man -made fibers, knitted or 
crocheted or made up from knitted or crocheted 
fabric, wholly or in part of braid  33 
6214.90.00  Shawls, scarves , mufflers, mantillas, veils and the 
like, not knitted or crocheted, of textile materials, 
nesoi 32 
4202.92.39  Travel, sports and similar bags with outer surface of 
textile materials other than MMF, paper yarn, silk, 
cotton  32 
4202.22.89  Handbags with or without shoulder strap or without 
handle, wit h outer surface of textile materials nes oi 28 
 Subtotal  2,073 
 All Others  291 
 Total 2,365