The Garment Association of Nepal (GAN) has urged the government to lobby the U.S. government to endorse the TRADE (Tariff Relief Assistance for Developing Economies) Act 2005, which would facilitate duty free entry of garment products of Nepal, a leading media group's website, eKantipur.com reported on Sunday.

GAN President Kiran Prakash Saakha was quoted as saying "If the government can convince the U.S. government to endorse the act, Nepal will again gain a competitive edge, which it lost since the expiry of Multi Fiber Agreement (MFA) in January 2005."

Ever since the phasing out of the quota system or MFA, garment exports have come down by more than half, Saakha said.

Saakha made the remarks on Saturday while addressing 17th annual general meeting of the Garment Association of Nepal, a umbrella organization of garment industries in Nepal.

Saakha said that the garment industry in Nepal is on the verge of collapse as a result of unreasonable demands of workers, acts of extortion and lack of initiatives from the government to promote the sector.

"Deteriorating industrial environment, caused by labor related problems, threats of physical harm and lack of government's long term policy, are having their adverse impact on the sector," he said.

"If these problems are not addressed soon, the country will lose another sector which is making significant contribution to the economy," he warned.

According to Chandi Raj Dhakal, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Nepal used to export garments worth 14 billion Nepali rupees (200 million U.S. dollars) annually, and now it exports garment only worth more than 50 million rupees (714,285 dollars). The sector used to provide employment to around 200,000 people, and now it employs only a few hundreds."

Source: Xinhua