WT/L/1001  
 
12 December 2016  
(16-6769) Page: 1/9 
General Council    
 
TRADE PREFERENCES GR ANTED BY THE UNITED STATES OF AMERICA TO  NEPAL  
DECISION OF 7 DECEMBER  20161 
The General Council,  
 
Conducting  the function of the Ministerial Conference in the interval between meetings 
pursuant to paragraph  2 of Article  IV of the WTO  Agreement;  
 
Having regard  to paragraphs  1, 3 and 4 of Article  IX of the Marrakesh Agreement 
Establishing the World Trade Organization (the "WTO  Agreement"), the Guiding Principles to be 
followed in considering applications for waivers adopted on 1  November  1956 (BISD  5S/25), and 
the Understanding in Respect to Waivers of Obligations under the General Agreement on Tariffs 
and Trade 1994 (the "Understanding");  
 
Taking note  of the request of the United States, pursuant to paragraph  3 of Article  IX of the 
WTO Agreement, for a waiver of its obligations under paragraph  1 of Article  I and paragraphs  1 
and 2 of Article  XIII of the General Agreement on Tariffs and Trade  1994 (GATT  1994) through 
31 December  2025, to the extent necessary to permit it to provide duty -free treatment to eligible 
products originating in Nepal designated pursuant to section  915 of the Trade Facilitation and 
Trade Enforcement Act of 2015 ("the Act");  
 
Bearing in mind  also the 1979  Decision on Differential and More Favourable Treatment, 
Reciproc ity and Fuller Participation of Developing Countries and the 1994  Decision on Measures in 
Favour of Least -Developed Countries;  
 
 Considering  the dramatic social and economic situation as a consequence of the earthquake 
and its aftershocks which affected ex tensive regions of Nepal in April  2015, as well as the efforts 
made by the Members to foster economic development in landlocked least developed countries 
such as  Nepal;  
 
Considering  further that the preferential treatment provided to Nepal under the Act i s 
designed to promote the expansion of trade and economic development of Nepal in a manner 
consistent with the objectives expressed in paragraphs  1, 2, and 3 of the Preamble to the 
WTO Agreement;  
 
Considering  further that the preferential treatment provide d under the Act will not alter 
benefits provided under the US  Generalized System of Preferences to other developing countries;  
 
Considering , moreover, that the duty -free treatment provided to Nepal under the Act should 
not prejudice the interests of other Members not benefiting from such treatment, and that it is 
expected that the provision of such duty -free treatment to Nepal will not cause a significant 
diversion of United States imports of products eligible under this Act originating in Members who 
are not beneficiary countries;  
 
Considering  that the duty -free treatment provided to Nepal under the Act by the United 
States shall not constitute an impediment to the reduction or elimination of tariffs and other 
restrictions to trade on a most -favoured -nation  basis;  
 
                                                
1 Adopted in accordance with the Decision -Making Procedures under Articles  IX and XII of the 
WTO Agreement agreed by the General Council on 15  November  1995 (WT/L/93) . WT/L/1001  
 
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   Taking note  of the assurances given by the United States that it will promptly enter into 
consultations, on request, with any interested Member with respect to any difficulty or matter that 
may arise as a result of the preferential treatment prov ided under the Act;  
 
 Noting  that, in light of the foregoing, the exceptional circumstances justifying the waiver 
from paragraph  1 of Article  I and from paragraphs  1 and 2 of Article  XIII of the GATT  1994 exist;  
 
Decides  as follows:  
 
1. Subject to the term s and conditions set out hereunder, paragraph  1 of Article  I and 
paragraphs  1 and 2 of Article  XIII shall be waived through 31  December  2025, to the extent 
necessary to permit the United States to provide duty -free treatment to eligible products 
originatin g in Nepal, as defined in the Annexes to this Decision, without being required to extend 
the same treatment to like products of any other Member.  
 
2. The United States shall submit to the General Council an annual report on the 
implementation of the provis ions that provide preferential treatment to Nepal under the Act with a 
view to facilitating the annual review provided for in paragraph  4 of Article  IX of the 
WTO Agreement.  
 
3. Such duty -free treatment shall be designed to facilitate and promote the trade  of Nepal and 
not to raise barriers to or create undue difficulties for the trade of any other Members.  
 
4. The United States shall promptly enter into consultations, on request, with any interested 
Member with respect to any difficulty or matter that may arise as a result of the preferential 
treatment provided to Nepal under the Act. If a Member considers that any benefit accruing to it 
under the GATT  1994 may be or is being impaired unduly as a result of such implementation, such 
consultation shall examin e the possibility of action for a satisfactory resolution of the matter.  
 
5. This Decision does not affect Members' rights as set forth in the Understanding in Respect of 
Waivers of Obligations under the GATT  1994.  
 
_______________  
 WT/L/1 001 
 
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  ANNEX 1  
THE TRADE FACI LITATION AND TRADE E NFORCEMENT ACT OF 20 15 (SEC.  915 OF P.L.  114-125) 
SEC. 915. TRADE PREFERENCES FOR NEPAL.  
 
(a) FINDINGS. —Congress makes the following findings:  
 
(1) Nepal is among the least developed countries in the world, with a per capita gross 
national income of $730 in 2014.  
 
(2) Nepal suffered a devastating earthquake in April  2015, with subsequent aftershocks. 
More than 9,000  people died and approximately 23,000  people were injured.  
 
(b) ELIGIBILITY REQUIREMENTS. — 
 
(1) IN GENERAL. —The President ma y authorize the provision of preferential treatment 
under this section to articles that are imported directly from Nepal into the customs 
territory of the United States pursuant to subsection  (c) if the President determines — 
 
(A) that Nepal meets the requi rements 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 
 
(B) after taking into account the factors set forth in paragraphs  (1) through (7) of 
subsection  (c) of section  502 of th e Trade Act of 1974 (19  U.S.C. 2462), that 
Nepal meets the eligibility requirements of such section  502. 
 
(2) 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.).  
 
(c) ELIGIBLE ARTICLES. — 
 
(1) IN GENERAL. —An article described in paragraph  (2) may enter the customs territory 
of the United States free of duty.  
 
(2) ARTICLES DESCRIBED. — 
 
(A) IN GENERAL. —An article is described in this paragraph if — 
 
(i) (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);  
 
(ii) the article is imported directly from Nepal into the customs territory of 
the United States;  
 
(iii) 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):  
 WT/L/1001  
 
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  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  
5702.3 1.20......................................  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   
 
(iv) the President determines, after receiving the advice of th e 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  
 
(v) subject to subparagraph  (C), the sum of t he 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.  
 
(B) EXCLUSIONS. —An article shall not be treated as the growth, product, or 
manufacture of Nepal for purposes of subparagraph  (A)(i)(I) by virtue of having 
merely undergone — 
 
(i) simple combining or packaging operations; or  
 
(ii) mere dilution with water or me re dilution with another substance that 
does not materially alter the characteristics of the article.  
 
(C) LIMITATION ON UNITED STATES COST. —For purposes of subparagraph  (A)(v), 
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 subparagraph may not 
exceed 15  percent of the appraised value of the article at the time it is entered.  
 
(3) VERIFICATION WITH RESP ECT TO TRANSSHIPMENT FOR TEXTILE AND APPAREL 
ARTICLES. — 
 
(A) IN GENERAL. —Not later than January  1, April  1, July  1, and October  1 of each 
calendar year, the Commissioner shall verify that textile and apparel articles 
imported from Nepal to which preferenti al treatment is extended under this 
section are not being unlawfully transshipped into the United States.  
 
(B) REPORT TO PRESIDENT. —If the Commissioner determines under 
subparagraph  (A) that textile and apparel articles imported from Nepal to which 
prefere ntial treatment is extended under this section are being unlawfully WT/L/1 001 
 
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  transshipped into the United States, the Commissioner shall report that 
determination to the President.  
 
(d) TRADE FACILITATION AND CAPACITY BUILDING. — 
 
(1) FINDINGS. —Congress makes the fo llowing findings:  
 
(A) 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.  
 
(B) The World Bank has found evidence that the overall export competitiveness of 
Nepal has been declining sin ce 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.  
 
(C) Implementation by Nepal of the Ag reement on Trade Facilitation of the World 
Trade Organization could directly address some of the weaknesses described in 
subparagraph  (B). 
 
(2) 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 — 
 
(A) 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;  
 
(B) to provide export finance training for financial institutions in Nepa l and the 
Government of Nepal;  
 
(C) to assist the Government of Nepal in maintaining publication on the Internet of 
all trade regulations, forms for exporters and importers, tax and tariff rates, and 
other documentation relating to exporting goods and deve loping 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 
Organi zation; and  
 
(D) to increase access to guides for importers and exporters, through publication of 
such guides on the Internet, including rules and documentation for United 
States tariff preference programs.  
 
(e) 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 section, the compliance of Nepal with subsection  (b)(1), and the 
trade and investment policy of the United States with respect to Nepal.  
 
(f) TERMINATION OF PREFERENTIAL TREATMENT. —No preferential treatment extended under 
this section shall remain in effect after December  31, 2025.  
 WT/L/1001  
 
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  (g) EFFECTIVE DATE. —The provisions of this section shall take eff ect on the date that is 30  days 
after the date of the enactment of this Act.  
 
_______________  WT/L/1 001 
 
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  ANNEX 2 
PRODUCTS ORIGINATING  IN NEPAL TO BE EXEMP TED FROM CUSTOM DUTI ES 
UPON IMPORTATION INT O THE UNITED STATES  
Products are listed by Harmonized Tariff Schedule  of the United States (HTS)  subheadings. The 
product descriptions in this list are for informational purposes only; the definitive tariff 
nomenclature for the products listed below can be found in the HTS. The descriptions below are 
not intended to delimit  in any way the scope of the relevant subheadings. The HTS may be viewed 
at http://www.usitc.gov/tata/hts/bychapter/index.htm . 
 
HTS 
Subheading  Brief Description  
4202.11.00  Trunks, suitcases , vanity & all other cases, occupational luggage & like containers, 
surface of leather, composition or patent leather  
4202.12.20  Trunks, suitcases, vanity and attache cases, occupational luggage and similar 
containers, with outer surface of plastics  
4202.12.40  Trunks, suitcases, vanity & attache cases, occupational luggage & like containers, 
surfaces of cotton, not of pile or tufted construction  
4202.12.60  Trunks, suitcases, vanity & attache cases, occupational luggage & like containers, 
w outer surface of veg. fibers, excl. cotton  
4202.12.80  Trunks, suitcases, vanity & attache cases, occupational luggage and similar 
containers, with outer surface of textile materials nesi  
4202.21.60  Handbags, with or without shoulder strap or without handle, with outer  surface of 
leather, composition or patent leather, nesi, n/o $ ea.  
4202.21.90  Handbags, with or without shoulder strap or without handle, with outer surface of 
leather, composition or patent leather, nesi, over $ ea.  
4202.22.15  Handbags, with or without  shoulder straps or without handle, with outer surface of 
sheeting of plastics  
4202.22.40  Handbags with or without shoulder strap or without handle, with outer surface of 
textile materials, wholly or in part of braid, nesi  
4202.22.45  Handbags with or wit hout shoulder strap or without handle, with outer surface of 
cotton, not of pile or tufted construction or braid  
4202.22.60  Handbags with or w/o shoulder strap or w/o handle, outer surface of veg. fibers, 
exc. cotton, not of pile or tufted construction or  braid 
4202.22.70  Handbags with or w/o shoulder strap or w/o handle, with outer surface containing 
% or more of silk, not braided  
4202.22.80  Handbags with or without shoulder strap or without handle, with outer surface of 
textile materials, nesi  
4202.29 .50 Handbags w. or w/o shld. strap or w/o handle of mat. (o/t leather, shtng. of plas., 
tex. mat., vul. fib. or paperbd.), pap.cov.,of mat. nesi  
4202.29.90  Handbags with or without shoulder straps or without handle, with outer surface of 
vulcanized fiber or of paperboard, not covered with paper  
4202.31.60  Articles of a kind normally carried in the pocket or handbag, with outer surface of 
leather, composition or patent leather, nesi  
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  
4202.32.80  Articles of a kind normally carried in the pocket or handbag, with outer surface of 
vegetable fibers, not of pile or tufted construction, nesi  
4202.32.95  Articles of a kind norma lly carried in the pocket or handbag, with outer surface of 
textile materials, nesi  
4202.91.00  Cases, bags and containers nesi, with outer surface of leather, of composition 
leather or patent leather  
4202.92.08  Insulated food or beverage bags with outer surface of textile materials, nesoi  
4202.92.15  Travel, sports and similar bags with outer surface of cotton, not of pile or tufted 
construction  WT/L/1001  
 
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  HTS 
Subheading  Brief Description  
4202.92.20  Travel, sports and similar bags with outer surface of vegetable fibers, excl. cotton, 
not of pile c onstruction  
4202.92.30  Travel, sports and similar bags with outer surface of textile materials other than of 
vegetable fibers  
4202.92.45  Travel, sports and similar bags with outer surface of plastic sheeting  
4202.92.60  Bags, cases and similar containers , nesi, with outer surface of cotton  
4202.92.90  Bags, cases and similar containers nesi, with outer surface of plastic sheeting or 
of textile materials, excl. cotton  
4202.99.90  Cases, bags and similar containers, nesi, with outer surface of vulcanized fi ber or 
of paperboard  
4203.29.50  Gloves, mittens and mitts of leather or composition leather, nesi, lined, for 
persons other than men  
5701.10.90  Carpets and other textile floor coverings, of wool or fine animal hair, not 
hand-hooked, not hand knotted duri ng weaving  
5702.31.20  Carpets and other textile floor coverings of pile construction, woven, not tufted or 
flocked, not made up, of wool/fine animal hair, nesoi  
5702.49.20  Carpets & other textile floor coverings of pile construction, woven, not tufted or  
flocked, made up, of other textile materials nesoi  
5702.50.40  Carpets & other textile floor coverings, not of pile construction, woven, not made 
up, of wool or fine animal hair, nesoi  
5702.50.59  Carpets & other textile floor coverings, not of pile const ruction, woven, not made 
up, of other textile materials nesoi  
5702.91.30  Floor coverings, not of pile construction, woven not on power -driven loom, made 
up, of wool or fine animal hair, nesi  
5702.91.40  Carpets & other textile floor coverings, not of pile  construction, woven nesoi, 
made up, of wool or fine animal hair, nesoi  
5702.92.90  Carpet & other textile floor coverings, not of pile construction, woven, made up, of 
man-made textile materials, nesi  
5702.99.15  Carpets and other textile floor coverings,  not of pile construction, woven, made 
up, of cotton, nesoi  
5703.10.20  Hand-hooked carpets and other textile floor coverings, tufted, whether or not 
made up, of wool or fine animal hair  
5703.10.80  Carpets and other textile floor coverings, tufted, whethe r or not made up, of wool 
or fine animal hair, nesoi  
5703.90.00  Carpets and other textile floor coverings, tufted, whether or not made up, of other 
textile materials nesoi  
5705.00.20  Carpets and other textile floor coverings, whether or not made up, neso i 
6117.10.60  Shawls, scarves, mufflers, mantillas, veils and the like, nesoi  
6117.80.85  Headbands, ponytail holders & similar articles, of textile materials other than 
containing % or more by weight of silk, knitted/crocheted  
6214.10.10  Shawls, scarves,  mufflers, mantillas, veils and the like, not knitted or crocheted, 
containing % or more silk or silk waste  
6214.10.20  Shawls, scarves, mufflers, mantillas, veils and the like, not knitted or crocheted, 
containing less than % silk or silk waste  
6214.20.0 0 Shawls, scarves, mufflers, mantillas, veils and the like, not knitted or crocheted, 
of wool or fine animal hair  
6214.40.00  Shawls, scarves, mufflers, mantillas, veils and the like, not knitted or crocheted, 
of artificial fibers  
6214.90.00  Shawls, scarv es, mufflers, mantillas, veils and the like, not knitted or crocheted, 
of textile materials nesoi  
6216.00.80  Gloves, mittens and mitts, not knitted or crocheted, of wool or fine animal hair, 
nesoi WT/L/1 001 
 
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  HTS 
Subheading  Brief Description  
6217.10.85  Headbands, ponytail holders and similar articl es, of textile materials containing 
< % by weight of silk, not knit/crochet  
6301.90.00  Blankets and traveling rugs, nesoi  
6308.00.00  Needlecraft sets for making up into rugs, etc., consist of woven fabric and yarn, 
whether/not w/accessories, put up packi ngs for retail sale  
6504.00.90  Hats and headgear, plaited or assembled from strips of any material (o/than veg. 
fibers/unspun fibrous veg. materials and/or paper yarn)  
6505.00.08  Hats and headgear made from hat forms and hat bodies of , except of fur fel t 
6505.00.15  Hats and headgear, of cotton and/or flax, knitted  
6505.00.20  Headwear, of cotton, not knitted; certified hand -loomed and folklore hats 
& headgear, of cotton or flax, not knitted  
6505.00.25  Hats and headgear, of cotton or flax, not knitted, not certified hand -loomed 
folklore goods  
6505.00.30  Hats and headgear, of wool, knitted or crocheted or made up from knitted or 
crocheted fabric  
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  
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  
6505.00.60  Hats and headgear, of man -made fibers, knitted or crocheted  or made up from 
knitted or crocheted fabrics, not in part of braid  
6505.00.80  Hats and headgear, of man -made fibers, made up from felt or of textile material, 
not knitted or crocheted, not in part of braid  
6505.00.90  Hats and headgear, of textile materi als (other than of cotton, flax, wool or 
man-made fibers), nesoi  
6506.99.30  Headgear, nesoi, of furskin, whether or not lined or trimmed  
6506.99.60  Headgear (other than safety headgear), nesoi, of materials other than rubber, 
plastics, or furskins, wheth er or not lined or trimmed  
 
__________