Nepal's garment exports to U.S. sink to zero

Long plunging garment exports to the United States have hit rock bottom with not one piece being shipped in June. Nepal's ready-made garment manufacturers received zero orders from the U.S. during the month, The Kathmandu Post daily reported on Tuesday.

Statistics of the Garment Association of Nepal (GAN) show that garment exports in the first six months of 2010 recorded a decline of 38.9 percent.

According to GAN, exports to the U.S. amounted to 2.19 million U.S. dollars during the review period. Exports during the first six months of 2009 were worth 3.59 million dollars.

Exports to the U.S. have been consistently declining since the elimination of quotas in global apparel trading in 2005. The decline in exports to the U.S. in the last four years has pushed Nepal's garment industry to the verge of collapse.

Even though exports to the U.S. had grown by around 25 percent in January 2010, the last five months have been dismal. According to GAN, exports have nose-dived by 90 percent during the period 2005 to 2009.

Garment manufacturers are not surprised by this massive decline. "This is not a new story for the garment industry," said GAN past president Kiran Sakha. "Manufacturers and exporters both have lost hope due to the constant labor unrest and bandas that have crippled production."

"This was bound to happen," said trade expert Ratnakar Adhikari. He added that Nepali ready-made garments had been losing competitiveness in the U.S. market. "Garment manufacturers and exporters should look to other markets including the EU rather than relying on the U.S. market only," said Adhikari.

With Nepal not being able to get duty-free access for its ready- made garments in the U.S. market, the only hope is the Trade and Investment Framework Agreement (TIFA) which Nepal and the U.S. are to sign in the near future. TIFA has provisions that will help Nepal to gain favorable market access in the U.S.
(Source:xinhua)