EDITORIAL ARTICLE

EU agrees to review anti-dumping duty on bed linen

The European Union (EU) has agreed to make a review of 13.1% anti-dumping duty levied in March 2004 on the imports of bed linen from Pakistan. In order to review the 13.1% punitive duty imposed on bed linen, the European Commission will have to once again carry out investigations after seeking quotations from cooperative companies or exporters to the European market.
The EU levied anti-dumping duty on Pakistan's bed linen in 1997, which was withdrawn in January 2002, as the investigation conducted into the matter did not determine the dumping element in Pakistan's exports of bed linen to the EU. In December 2002, the EU again started investigations but the investigation team did not complete the process and left the country without completing its job. In 2003 European Union has released 4,000 tonnes exceptional flexibility textile quota for 2003 in categories 6, 9 and 20-bed linen, towels and readymade garments.
The EU imposed again 13.1% anti-dumping duty on bed linen in March 2004 after it claimed that the investigations carried out by the European Commission had found sufficient evidence that cheap imports from Pakistan was causing an injury to the European textile industry. The exporters of bed linen took strong exception and claimed that the EC investigation team rushed back without completing the investigations and without giving any tangible reason. As a result of this the EU entered into lengthy negotiations with Pakistan to resolve the issue. The EU team, which visited Pakistan early this year to review the manufacturing process and sales operations of the selected exporters, left suddenly under the pretext of security risks without completing its job.
Now both the sides gave suggestions and counter-suggestions for resolving the issue and at one stage the EU offered 'tariff-quota' under which certain quantity of bed linen exports would have been allowed without any punitive duty and thereafter a duty would be imposed from January 1, 2005. The exporters are in favour of complete withdrawal of the anti-dumping duty because in the free trade era, commencing from January next year, there should be no restriction on trade among the World Trade Organisation (WTO) members.
The WTO pointed out that the Pakistan exporters would be required to pay 12% duty on the exports to the EU from January 2005 as the duty-free facility under the General System of Preference (GSP) would be withdrawn. Consequently, with a 13.1% anti-dumping duty and a 12% customs duty, Pakistan's exports of bed linen to the European market will be completely wiped out as the exporters will not be in a position to compete with a total duty impact of around 25.1%. However, the EU has now realized that Pakistani exporters of bed linen will suffer immensely and will not be able to sustain under such a heavy duty, particularly when other countries will enjoy the facility of free market era.
The European Union is one of the major markets for the export of Pakistan's bed linen, which has won preference of the consumers in terms of quality and design over the similar items exported by other competitors to the European market. The export of bed linen, one of the fast growing industrial sectors of the country, crossed $ 1.0 billion mark recently and is poised to exceed $ 2.0 billion after December 2004, when quota restrictions under MFA (Multi Fibre Agreement) expire. At present around 200 bed linen exporters are engaged in trade with EU member states and have a total quota volume of 200,000 tonnes, earning around $400 million per annum. Pakistan exports around 60,000 tonnes of bed linen to the EU.
The government officials and the bed linen exporters recently held discussions on the ways and means to tackle the anti-dumping duty on bed linen. Tasneem Noorani, Federal Commerce Secretary, has assured exporters that the government would fully cooperate with the exporters to safeguard their interests. The EU on its part has offered to review the anti-dumping measures and is expected to notify the initiation of the review sometime by the end of July.