ISLAMABAD, March 27: The government has decided to challenge the decision of the Egyptian Investigation Authority (EIA) for levying 29 per cent import duty on Pakistani matches at the Dispute Settlement Body (DSB) of the WTO.

Commerce Minister Humayun Akhtar Khan told Dawn on Saturday that the decision was taken at a high-level meeting. He believed that an anti-dumping duty on matches was illogical and could not be justified under WTO rules.

The decision would have an adverse effect on the country as match manufacturers contribute massively to the earning of valuable foreign exchange.

Exports of matches to Egypt account for approximately $5 million and the match industry is the only export-oriented industry of NWFP that employs around 5,000 people. Such anti- dumping action could also affect the jobs of hundreds of agriculturalist and farmers, who provide poplar wood to the match industry, the minister added.

According to a letter of the Pakistan Match Manufacturers, a copy of which was made available to Dawn, the decision made by the EIA was due to political pressure and not on the merits of the case.

Pakistan is exporting matches to almost all over the world, but none of these countries have levelled any sort of allegation, the PMM said and added that the most important factor was that Pakistani manufacturers were using locally available raw material with low conversion cost. Whereas the Egyptian companies are importing all the major inputs, that is why they could not compete against Pakistani matches in the Egyptian market, the PMM added.

Egypt has imposed 29 per cent anti-dumping duty on Khyber Match Factory (Pvt) Ltd and all other exporters from Pakistan, excluding Mohsin Match Factory (Pvt) Ltd, on which 26 per cent duty was imposed.

The issue of anti-dumping duty on Pakistani matches was raised in August 2002 on a complaint made by Nile Match and Egyptian Match Company to the EIA. Both the Egyptian companies in their complaint had alleged that dumped imports of matches from Pakistan were causing material injury to the Egyptian match industry.