It is disturbing to learn from a report in this newspaper (October 28) that the US Customs have imposed an embargo on the clearance of export shipments of shop towels under Category 369(S) from Pakistan with immediate effect.
In fact, quite a sizeable quantity of consignments of shop towels dispatched earlier from Pakistan, have been held up by the US Customs. The situation has naturally caused consternation among the exporters and manufacturers of this item who would be facing a threat of financial losses in the event of non-clearance of their shipments at the US ports.
The information about this development was reportedly conveyed by the Export Promotion Bureau to the Towel Manufacturers Association (TMA) in Karachi after the receipt of a fax message from the US Customs authorities.
The towel manufacturers were also advised to suspend further shipments to US destinations because that would aggravate the situation arising from the accumulation of consignments of shop towels exported from Pakistan due to non-clearance at the US ports.
According to the figures about the utilisation of the quota of shop towels for USA, as maintained by the EPB, exports so far completed within the quota limits worked out to 86.81 percent. This means that Pakistani exporters are still entitled to cover the remaining unutilised quota of 13 percent by making additional exports by the end of December this year.
According to a statement from Syed Muzammil Hussain, Vice Chairman of Towel Manufacturers Association, Sindh and Balochistan, the action of the US Customs may be based on the difference between the figures about the utilisation of the agreed quota as shown on the website of US Customs and those maintained by the EPB. He advised the EPB to match its figures with those of the US Customs so that the problem could possibly be resolved.
It is indeed disgusting to note that US Customs authorities usually resort to hasty action without checking their figures with EPB although both sides are usually in contact on the issue of quota exports through the electronic system known as 'Elvis'.
The Towel Manufacturers Association has appealed to the Commerce Minister to approach the US authorities for the clearance of the withheld consignments of shop towels from Pakistan.
It may be mentioned here that it was only about two weeks ago that the federal commerce minister returned from the USA after comprehensive negotiations with the US trade department on issues concerning Pakistan's efforts to seek greater market access for its exports to the US market.
In this connection, the prospects of a free trade agreement between the two countries were also reportedly discussed and further negotiations are likely to be held in the near future.
Pakistan's keen desire to enter into a free trade agreement with the USA is based on expectations of a favourable treatment in the form of lower rates of customs tariff for its textile exports after the end of the export quota regime for textiles from 2005 onwards.
In this context the non-clearance of towel shipments from Pakistan at the US ports will be seen as a harsh measure in view of the fact that the quota for this item is yet to be utilised fully by Pakistani exporters.
According to another report, the United States Bureau of Customs has clarified in response to queries from certain quarters that even after the abolition of quota exports in textiles for the WTO member-countries from January 2005, a textile item would be subjected to quota safeguards in the US market if the item is exported from a third country to the US market.
For instance, any attempt to re-export textile goods, originally manufactured in China, from Europe or any other country would continue to be subjected to quota restrictions in the USA after the quota abolition in 2005.
It would appear that such rules which might be arbitrarily applied by the developed countries, specially the USA, even in the post-quota era, may continue to hamper the global textile trade in the coming years.