After clearly favoring Pakistan in the wake of 9/11 attacks, the European Union could now try limiting an expected surge in imports from the low-cost country after 2004. .
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EU Commission could soon propose an anti-dumping duty on bed linen from Pakistan after shipments were up 27% in value terms in the January-November period, according to Pakistani sources. .
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Pakistan has an overwhelming share of EU bed linen imports from low-cost countries. No less than 54,000 tons were imported from Pakistan by mid-December. .
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Imports did not sharply increase in 2003 in volume terms actually, although Pakistan initial quota was raised from 46,800 tons up to 52,400 tons. .
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EU Commission offered in 2002 a dramatic adjustment in the so-called “working” or effective limit, raised to 56,335 tons by the end of the year while the same limit did not exceed 58,900 tons in 2003.Not surprisingly, Pakistani quotas are being 100% utilized after Brussels offered a duty-free access to Pakistani bed linen under its GSP program, in addition to a substantial rise in limits. .
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In sharp contrast with previous treatment, Pakistani bed linen are now threatened by a 15% anti-dumping duty. .
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EU anti-dumping investigation was announced a year ago. Islamabad proposed ways to escape such anti-dumping duties, including imposing a minimum price for Pakistani bed linen or reducing duty-free quantities exported to the European Union. .
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All these proposals were apparently rejected by Brussels. .
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Similar anti-dumping duties were already imposed on Pakistani, Egyptian and Indian bed linen from 1997 to 2001. .
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After filing the European Union before the WTO, India won its case. Brussels last week published its final decision to terminate anti-dumping duties on Indian bed linen, already suspended two years ago. .
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Far from renouncing, Brussels would impose anti-subsidy duties on the same bed linen from India, from 5.3% up to 16% and effective from January. .
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EU MFN tariffs already reach 16%.If such countervailing duties were imposed by the European Union, Pakistani bed linen could retain their relative advantage since still benefiting from basic tariff-free entry, anti-dumping duties excepted. .
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This duty-free treatment was already contested by India, however. A few weeks ago, a WTO panel suggested that EU Commission should repeal the specific treatment offered to countries fighting drug traffic, including Pakistan and a large series of Latin American countries. .
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Brussels could appeal the rule with a 1-year delay in a possible removal of the preferential treatment. .
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If the rule is confirmed or the EU does not appeal the rule, however, Pakistan may lose its duty-free advantage covering not only bed linen but also all apparel exports to the EU. .
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Promptly reacting to India victory, Brussels may file this country before the WTO for imposing a series of anti-dumping duties on imports from the European Union, including acrylic fibers. Consultations were already officially requested.
Date:12/18/2003
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