The National Tariff Commission (NTC) has initiated an investigation to review the duty structure of polyester chain including PTA in pursuance of para 67 of the Textile Policy 2009-14 speech made by the Textile Minister.  To promote utilisation of manmade fibre and diversify the export mix, monetisation of customs duty on PTA is being continued to offset the additional cost for the users in the current year.  This will entail an expenditure of Rs4.5 billion approximately during the current financial year (2009-10).

The Act provides for a due process to be followed under which the commission will carry out an in-depth examination of the case of protection to the indigenous industry and comprehensive analysis of relevant data.

Spinners have warned that any curbs on yarn export resulting in lower prices of the commodity would be counter-productive for the value added textile sector which may be subjected to countervailing duties under the World Trade Organisation.

All Pakistan Textile Mills Association’s former chairman Akber Sheikh warned the clothing sector that any restriction on yarn export as demanded by the textile value added sector, being contrary to WTO obligations, would lead to textile value chain being considered a beneficiary of subsidised input. The entire industry would become vulnerable to countervailing duties by importing countries.

He said European Union countries were sensitive to trade-distorting measures evident from the countervailing duty imposed on export of bedlinen from India and a complaint file against subsidy being given to the PTA industry in Pakistan.

He pointed out that EU trade counsellors had already complained about export restrictions on raw leather from Pakistan. They would be much more sensitive about cotton yarn.

He said the value added sector should adopt a mature stance. The sector should learn to live with market forces like the spinning sector which even in a period of acute raw cotton shortage never demanded a ban on cotton export.