KARACHI, Sept 24: The European Union (EU) is manoeuvring to restrict quantum of textiles and clothing export from Pakistan even after the expiry of quota regime on December 31, 2004. Though the EU has not taken up this matter at the official level, ‘behind the scene’ developments strongly indicate that there is a move on their (EU) part to put a cap on Pakistani textile exports ahead of quota free market era starting from January 1, 2005.

These indications emerged from a recently held meeting at Brussels, between EU’s Commission and a group of leading textile exporters from Pakistan over the issue of anti-dumping duty on bedlinen, a former office bearer of All Pakistan Cloth Exporters Association (APCEA) told Dawn.

The European Commission HAD invited a group of bedlinen exporters from Pakistan in the first week of this month to find out a constructive solution to the on-going anti-dumping proceedings and the suggested punitive duty of up to 40 per cent.

The group comprising six or seven ‘big wigs’ has reportedly not opposed the propositions of the EU’s commission aggressively because they were themselves more attuned to the prevalent restrictive system, maintained the APCEA member. He said that it was a sort of ‘Quota Tariff Regime’ that has been offered by the EU in post-quota regime scenario after December 31, 2004.

The EU commission is presently in a fix owing to its own fault and was trying to find a way out so it could secure a ‘win-win’ position. The commission could not complete its investigations and it was equally unlikely that it would like to do the same in the near future, therefore, they are trying to resolve the issue at its present position, he added.

Giving some details about the parleys of September 5, 2003, held at Brussels, European Commission’s headquarter, the APCEA member said firstly the EU suggested that the anti-dumping issue on bedlinen could be resolved by allowing 20,000 tons without anti- dumping duty and above that at a punitive duty at the rate of 25 per cent would be charged.

However, the EU negotiators rejected a suggestion given by a member of the Pakistan’s team that a floor price could be fixed to check dumping. They said it would be difficult for the Union to monitor the price.

Subsequently, the EU team made a counter offer for allowing 40,000 tons without any punitive duty and above that a balance of 25 per cent anti-dumping margin would be fixed, he maintained.

Commenting on these developments, APCEA representative said that it gives a strong signal that the EU wants to restrict Pakistani textile exporters in quota free era because once this condition of ‘quota tariff’ was accepted for bedlinen it could also be applied to other textile items as well, he added.

However, it is very difficult to know if the visiting Pakistani team of bedlinen exporters did have full patronage of the government. It was, however, learnt that Pakistan’s Economic Minister to Brussels was also attending these meetings.

Furthermore, the federal minister for commerce Humayun Akhtar Khan has been reported to have said on many occasions that the country (Pakistan) could also enter into bilateral agreements and if this is what he meant then it would translate into textile quotas for exporters even after January 1, 2005.

This would also mean that Pakistan would not be in a position to take up its cases with the Appellate Body of the WTO in the post-quota era. The additional tariff concessions allowed by the EU under Generalized System of Preference (GSP) would be coming to an end on December 31, 2004.

A pertinent question is what scope does the huge investment made in textile sector by many small and medium size entrepreneurs enjoy? According to official figures, presently about one dozen of leading bedlinen exporters are holding lion’s share of EU’s category 20 quota, they are: Gul Ahmed, Al-Abid, D L Nash, Chenab Fabrics, Al-Karam, Kam International, Yunus Textile, Mohammad Farooq, Fairdeal Textile, Al-vera Enterprise and Nishat.

On the other hand, quota premium in the open market has gone sky high and exporters are unable to meet their export commitments. A leading exporter said that he was losing huge orders to India and Bangladesh as he was unable to compete after paying high premium for quota.

With only one year left for quota regime the prices of quota should have come down to zero but strangely what was being witnessed, he said, was that they have jumped to 20 year record high.