Turkish government is planning to slab duty 28 percent on fabric and 40 percent on garment to protect its local industry. However, Pakistani exporters have strongly opposed the duty on fabric and garments during public hearing held this week in Turkey.
For the final verdict on safeguard duty proposal, a public hearing was held in Turkey, which attended by several Pakistani Fabric and garment exporters along their legal advisors to oppose the duty on fabric and garments. The Denim industry of Pakistan has taken a leading role in persuading Pakistani exporters to unite and develop a common legal strategy and Shahid Soorty, Chairman, Pakistan Denim Manufacturers, & Exporters Association (PDMEA) also attending public hearing early this week on behalf of the association.
The hearing was held by the Turkish Undersecretariat regarding impose of safeguard measures in relation to the import of fabrics & garments from countries like Pakistan, India, Indonesia, China, Thailand and GSP countries, Shahid informed on his return from Turkey.
Raashid Anwer of M/s Khalid Anwer & Co, Advocates was lead counsel for the case from Pakistan. He, in turn, hired a leading law firm in Turkey. In addition, a prominent WTO law firm in Brussels was also engaged. Besides this in order to gather the relevant statistical data, Turkish accountants were hired by PMDEA, he added. During the hearing, three presentations were made on behalf of Pakistan and Pakistani Consul General, Dr Junaid, gave another presentation. He pointed out that WTO requirements had not been fulfilled in this case.
Pakistani presentations were according to complaint and Pakistani lawyers pointed out that the data provided by the Turkish complainants are not base on a valid statistical basis. They explained that under the Turkish Safeguards Law there were three legal requirements, which had to meet before imposition of duties, including surge in imports, suffering of the local industry and evidence to prove that the suffering is because of high imports.
Soorti informed that during the hearing it revealed that surge in imports of fabric and garments was only appearing because in 2008 and 2009 there was a world-wide recession. However if the imports in 2010 were compared with imports in 2005 and 2006 there was no surge at all.
In order to rebut the complainants' claim that their employment had dropped drastically in 2008 and 2009, the Pakistani presentations showed that overall Turkish employment had also dropped by the same percentage in 2008 and 2009 because of world-wide recession, he added.
It also explained that raising the duty on fabrics would hurt the Turkish economy as this fabric mainly used for conversion into garment export to Europe. Therefore, if fabric became more expensive, Turkish garment manufacturers would not be able to compete with other countries and Turkey's exports would drop accordingly.
Soorti informed that more than twenty Pakistani woven fabric exporters registered with the Turkish authorities and this was the largest number of exporters of any country who registered with the Turkish authorities in the present case. The representatives of the US Government, the European Commission, Chinese Government, Indonesian Government, Bangladeshi Government, and the Malaysian Government also expressed their views at the hearing.
There was lot of pressure built on Turkish Government to reduce and avoid safeguard duty. Finally, it submitted that the complainants had failed to meet the legal requirements of the Turkish law and requested for rejection of complaint. Decision on safeguard duty is expected to announce sometime in April 2011.
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