Anti-dumping duty on bed linen abolished by EU

[LahoreEstate]

MUSHTAQ GHUMMAN
ISLAMABAD (March 06 2009): The European Union (EU) has abolished the long awaited anti dumping duty on export of bed linen from Pakistan. The EU had imposed anti-dumping duty on export of Pakistani bed linen to Europe in March 2004. The anti-dumping duty of 5.8 percent made Pakistani exports uncompetitive against other suppliers.

Pakistan's exports of bed linen to European Union during 2007-08 was 842.7 million dollars and had captured 44 percent of total EU's market share. The imposition of anti-dumping duty made the exports uncompetitive and its exports declined by nine percent in terms of value, while in terms of quantity, the exports remained the same as of last year. According to the EC policy, if a written request for review is not received in the stipulated time, the anti-dumping measures will automatically expire on the next review date.

The EC slapped an anti-dumping duty of 13.1 percent in early 2004, but following the protest of Pakistani exporters, the European Commission immediately announced a partial review. In the first closure of the review, the duty was brought down to 9.9 percent, which was further cut down to 7.6 percent in second review. While on May 6, 2006, the duty was further cut down to 5.8 percent.

It is hoped that this decision will make Pakistani exports of bed linen more attractive and the country will register an increase in its export revenue to the European market. The European commission has issued a formal notification in its official journal.

Being Pakistan's most important trading partner, the EU accounted for around 20 percent of Pakistan's total trade in 2007. The EU-Pakistan trade growth was about eight per cent annually between 2003 and 2007. Meanwhile, All Pakistan Textile Mills Association (APTMA) has welcomed the abolition of anti-dumping duty on Pakistan's bed linen exports to the EU.

Punjab APTMA Chairman Akbar Sheikh lamented the anti-dumping duty levy by the EU given that Pakistan was a vulnerable country. The APTMA also appealed to the EU and the US to help Pakistan in its fight against terrorism by giving it preferred market access.

Akber Sheikh expressed the hope that with the induction of Suleman Ghani as Commerce Secretary, the country's trade diplomacy would gain a fresh impetus. Textiles and clothing as well as leather products account for the majority of Pakistani exports, while its imports from the EU mainly comprise mechanical and electrical machinery as well as chemical and pharmaceutical products.

To further promote the development of two-way trade between the parties, the EU and Pakistan agreed in May 2007 to set up a sub-group on trade under the auspices of the EU-Pakistan Joint Commission. Besides discussing trade policy developments more broadly, the sub-group is also aiming to tackle individual market access issues, which hamper trade between the two parties.

According to the EU, wider picture, however, shows that regulatory barriers continue to hold Pakistan back from developing its full trade potential: High costs of doing business, complex regulation and infrastructure bottlenecks all have a detrimental effect on trade and growth. Pakistan's trade regime and regulatory environment still remain comparatively restrictive and in 2008, the World Bank ranked Pakistan 76 (out of 178 economies) in terms of the ease of doing business.

It is pertinent to mention here that Pakistan was making efforts to have the anti-dumping duty removed since Humayun Akhtar was the Commerce Minister. He visited Brussels several times to convince the European leaders that anti-dumping duty on Pakistani bed linen was unjust.

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