Nepal and the United States of America (USA) established the diplomatic relations between them on 25 April 1947. Nepal established its Embassy in Washington D.C. on 3 February 1958. On 6 August 1959, the American Embassy in Kathmandu was opened. A number of Nepal’s honorary consuls have been appointed in various US cities.
Exchange of Visits
High-level visits have served to further cement the bilateral relations between Nepal and the United States of America. Prominent visits to Nepal from the US include the visits of US First Lady Hillary Clinton in 1995, Assistant Secretary of State Christina Rocca in 2001, 2002, 2003 and 2005, Secretary of State Colin Powell in January 2002, Richard Boucher, Assistant Secretary of State in May 2006, November 2006 and February 2009, Under Secretary of State Henrietta Fore in March 2007, Assistant Secretary of State for South and Central Asian Affairs Mr. Robert O. Blake on June 12-13, 2009 and on 11 September 2012, Under Secretary of State for Political Affairs Wendy R. Sherman on April 4, 2012, and Under Secretary of State for Civilian Security, Democracy, and Human Rights María Otero from November 17 to 19, 2012 and on February 12 to 14, 2012.
Similarly, former US President and a Nobel laureate Jimmy Carter paid a visit to Nepal from 13-16 June 2007 in the capacity of the Founder of the Carter Center. He repeated his visits on November 20-24, 2007, and April 6-14, 2008.
The CEO of Millennium Challenge Corporation (MCC) Ms. Dana Hyde visited Nepal on 10-12 February 2015 and briefed about the MCC’s decision and potentiality of various sectors in which the aid can be utilized to Ministers and high-level dignitaries.
Important visits to the USA from the Nepalese side include the visits of late King Birendra and late Queen Aishwarya in December 1983, the then Prime Minister Sher Bahadur Deuba from May 6 to 11, 2002.
Hon. Deputy Prime Minister and Minister for Foreign Affairs Mr. K.P. Sharma Oli (September 2006) met with the Secretary of State Dr. Condoleezza Rice. Mrs. Sahana Pradhan (September 2007) visited the US in the capacity of Minister for Foreign Affairs.
The USA is one of the first countries to extend development assistance to Nepal. The development cooperation harks back to 1951 when it supported Nepal with its Point Four Program. USAID/Nepal is the development assistance arm of the US Mission to Nepal. Various sectors such as transport, communication, public health, family planning, malaria eradication, agriculture, forestry, energy, etc have come to benefit from the development assistance spanning more than 5 decades. Of late, US cooperation is also geared towards the institutionalization of peace and democracy and protection and promotion of human rights in accordance with its country strategy document. US cooperation has equally been instrumental in the fields of human resource development and institution building.
There have been regular exchanges of visits and sharing of expertise and experiences between the armies of the two countries in the area of training, disaster management, logistics management, counter-terrorism, interoperability and so on.
The US is one of the important trading partners of Nepal. It is also the biggest source of hard currency for Nepal primarily from the export of garments and carpets as well as from tourist incomes. After the end of the quota system under the Multi-fibre Agreement (MFA) in 2004, the export of Nepali readymade garments to the United States of America has declined significantly. Nepal has been consistently advocating for duty-free facilities for its exports to the US, especially the readymade garments.
Following is the position of trade balance with the US, which shows a favorable balance of trade most of the time:
Value in Rs. ‘000
939, 024, 310
546, 163, 4522
-958, 405, 860
(Source: Trade and Export Promotion Centre, Nepal)
Trade Preferences for Nepal: Trade Facilitation and Trade Enforcement Act 2015 (H.R.1907)
The duty-free program, specially designed for Nepal, came into effect on December 15, 2016, following the introduction of the US Trade Facilitation and Trade Enforcement Act by former US President Barack Obama. The Act was introduced to support Nepal’s economic recovery in the aftermath of devastating 2015 earthquakes.
Under this program, 66 Nepali products are granted duty-free entry into the US till December 31, 2025. This means goods like carpets and rugs, shawls, scarves, luggage articles, handbags, pocket goods, such as wallets, travel bags and other containers, headbands, blankets, hats, and gloves, which previously used to be subject to tariffs ranging from 5 percent to over 20 percent can now enter the US market at zero tariffs. However, such goods must be grown, produced, or manufactured in Nepal, with the cost of the Nepali materials plus the cost of processing standing at least 35 percent of the product’s sales price.
Millennium Challenge Corporation
Nepal is selected as an eligible country for Compact
Nepal joined MCC in 2010 when it was considered eligible for its “Threshold Program”, after passing through a scorecard consisting of 20 indicators related to the political, economic, and social situation of the country. Threshold Program aimed to assist a country in becoming compact eligible by supporting targeted policy and institutional reforms. MCC works with Threshold Program – eligible countries on these reforms through country-specific threshold program.
The MCC Compact Agreement (worth 630 million USD) was signed between Nepal and the USA on 14th September 2017. The Agreement aims to enhance Nepal’s energy connectivity and minimize transportation cost for economic growth and prosperity through the construction of about 300 km of electricity transmission lines and support for maintenance of 300 km of roads within 5 years of the project’s period.
The numbers of tourist arrival from the US to Nepal in the past years are as follows:
|Year||Number of Tourist|
US Peace Corps Volunteers
The Peace Corps Nepal, which temporarily suspended its operations and activities from September 2004, has resumed its operations from January 17, 2012. The volunteers have been working in rural areas in various sectors including teaching in schools.
Source: Ministry of Foreign Affairs