An idea of the seriousness of the situation arising from the imposition of anti-dumping duty by the European Union on our bed linen may be had from the sharp reaction of trade bodies besides the Pakistan Bedwear Exporters Association which has been directly hit by it.
Riaz Ahmed Tata, President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI), while deploring the approach of the Ministry of Commerce to the serious setback, has urged Commerce Minister Humayun Akhtar to take up the issue with the EU authorities.
He has expressed the fear that in the event of the government not taking a strong stand, the target of 14 billion dollars textiles exports could become unattainable.
More to it, he has pointed out that with the expansion of EU, Pakistan might be deprived of as many as ten more textile markets in Europe.
He is also reported to have suggested that Pakistani bed linen has been particularly targeted by certain vested interests in Europe, who are trying to sabotage the upper hand Pakistani exports enjoy in the international market.
Recalling that Pakistani bed linen had already remained subject to 6.5 to 8.2 percent duty for five years (1997 to 2002) and that it was only for a short period of 18 months that its exports gained equal access to the European market with other textile exporting countries, the FPCCI chief saw the threat of complete ouster Pakistani bed linen from EU, as had happened in Canada.
Subsequent to the imposition of anti-dumping duty on Pakistani bed linen by Canada, its export had already crashed from 30 million dollars to 4 million dollars.
Further, the GSP concession of 10 percent Pakistan enjoys on its bed linen exports to EU, would expire in 2005, he pointed out, and that would mean a total levy of 23 percent, making Pakistani textile goods all the more costly, thereby scaring more European buyers away, to the advantage of the regional competitors.
Reference may also be made to the strong plea made by Ahmad Kamal, Chairman, All Pakistan Cloth Exporters Association (Apcea), that the Ministry of Commerce make immediate efforts for the withdrawal of the unwarranted anti-dumping duty on bed linen.
He claimed that Pakistani exporters had fully complied with the questionnaire issued by the European Commission and that the analysis of the data and calculations of different price components were thoroughly cross-checked by the Commission, which had failed to find any fault with the export price mechanism or any speck of dumping.
Yet further investigations were mounted and physical audit was carried out by the inspectors, but without establishing any dumping activity.
Now that the duty has been imposed, Ahmed Kamal said it was time to launch an unfailing strategy to offset the negative impact of the anti-dumping duty without any further loss of time.
While appreciating the efforts of the Commerce Minister for establishing contact with Pascal Lamay and immediately taking up the matter with the European Commission, he emphasised the need for immediate damage control action to avert the loss to the country by taking the issue to the World Trade Organisation.
This, of course, makes sense in the historical perspective. It will be recalled that earlier, in 1997, the European Union had imposed anti-dumping duty on three countries, namely, Pakistan, Egypt and India.
On that occasion, while Pakistan and Egypt took it lying down, India opted to challenge it at WTO.
It is, however, just another matter that Pakistan and Egypt also stood to benefit from that country's two-year-long legal battle at the highest forum, resulting in the EU losing the case, and withdrawal of the duty imposed on all the three countries.
Obviously, learning a lesson from that upset, the EU did not bracket Pakistan with any other country this time, making it stick on us alone.
It will, however, be noted that while the government appears to have adopted almost the same indifferent attitude in the present case as in 1997, the Pakistani exporters directly affected this time also, seem to have failed to learn the right lesson from the example then set by India.
This, obviously, has reference to the six Pakistani companies wholly relying on one and the same foreign lawyer to deal with their cases in Brussels.
Evidently, they opted for this strategy because of the exorbitant fee involved in hiring more than one lawyer, which deprived them of the chance of benefiting from the second or third opinion which might have been available in the event of errors or omissions by the lone lawyer they chose to rely upon.
Now, seemingly realising their error of judgement on this count, quite discernible in their overall perception of the debacle appears to be the too heavy reliance they continued placing on the government.
Of course, the lapse on their part may be traced to the government's oft repeated loud claims of all out support to the private sector.
Reference, in this regard, may also be made to the discomfiture lately voiced over the government's protracted indecision on the European Commission's offer for settling the issue.
Perhaps, overtaken by the hype of EU's generosity as a reward for our enthusiastic participation in the international war on terror, the government and the private sector both took it for granted that Pakistan would be spared the burden of anti-dumping duty, as a gesture of goodwill.
Apart from the reality that the political alliance has already become a millstone round our neck these issues can be best pursued in accordance with the system and procedures laid down by the WTO.
The only course now left for us to avert the disaster is to take the case to WTO, for which the government and the exporters would do well to co-operate to the maximum possible extent.
As for the future, the government should stop putting wrong ideas of support and incentives in the minds of the businessmen, who in turn, should try to act in accordance with the demands of enlightened self-interest.
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