KARACHI, Nov 22: Pakistan will be the only country who will be entering the quota-free era of the world market with a punitive duty and a normal customs duty on its exports to European Union (EU) member states having a sizeable market for all categories of textiles and clothing.

The total impact of both the duties will be around 25.1 per cent with 13.1 per cent anti-dumping and 12 per cent customs duty. This would mean that our exporters will have to protect their market share with one arm tied at the back while their competitors will have no such burden and could easily encroach upon and grab Pakistan's export market share.

There had been two major factors which resulted in the imposition of punitive duty on import of Pakistani bedlinen to EU market. In the first place the EU Commission imposed the duty without completing the investigation of the five companies selected for the sample survey and thereafter the Ministry of Commerce failed to properly plead and take up the issue with the Commission to protect the market share ahead of free market era.

Last year, the EU Commission team came to Pakistan to conduct on the spot and physical verification of the five sample companies selected for collecting facts and figures to verify if any dumping had been made by Pakistani exporters.

When the investigation was under process the EU Commission team received an anonymous phone call of threat. The team members immediately rushed back home in next available flight. A complete investigation of one company was done by that time and the other was under the progress.

However, the local media was not informed about the sudden departure of the EU team and a former chairman of Pakistan Bedwear Exporters Association (PBEA) escorted them to airport. But soon after that some differences cropped up between the government and the exporters of bedlinen over the method and slow progress in handling the issue with the EU Commission. As a result of this a group of leading bedwear exporters-cum-manufacturers called a press conference where they dilated the story.

Since the exporters were so much annoyed over the way the issue was being handled by the government particularly when all important moves were being taken late to forestall the anti-dumping duty move of the EU Commission they informed the newsmen that they would boycott European products from where most of the capital goods and chemicals are imported by the textile industry.

That was the time when the EU indicated to give certain amount of duty free access to market but to no avail as the Pakistani side took too much time to take any decision.

According to some reports the EU offered 55,000 to 60,000 tons of duty free market access in the post quota market. When the Pakistani side shown interest in the offer the EU backed out and thereafter the situation went from back to worst.

In the meantime, Pakistan also took a decision to purchase Boeing air crafts from the US on rejecting Airbus offer. This further deteriorated the situation and in a way proved to be a last straw on the back of camel.

A year back the EU gave 15 per cent market access along with duty free import of all products to the European market. The duty free import was allowed under the Generalized System of Preference (GSP), which is also expiring on December 31, 2004.

The US instead of giving market access to Pakistani textiles and clothing only enhanced the ceiling of some quotas which normally stay under-utilized. The total impact was calculated to be at around $156 million.

Long delays from government side in tackling the issue ultimately resulted in the imposition of 13.1 per cent anti-dumping on import of bedlinen from Pakistan early this year.

A large team headed by the then secretary commerce also took flying visits to the European capitals for lobbying but all the efforts were made when most of the decisions had been taken by the EU authorities.

The Pakistani authorities lost another chance to change the mind-set of the EU high-ups when latter put the matter under review only after a period of two months of the imposition of the punitive duty.

At that time the EU was of fifteen member states and Ireland was the chairman of the trade committee of the EU. During the voting there was a tie as seven votes were cast in favour and equal number of votes were put against the anti-dumping duty. In normal practice the chairman's puts his vote in favour of EU decision.

The voting pattern speaks loud that little extra efforts from Pakistani side could have made difference but our authorities took the issue very lightly or were over confident with their personal relations and friendship with the EU Trade Commissioner Pascal Lamy.

At that time it was strongly suggested to the Ministry of Commerce to involve the President Pervez Musharraf in the matter but the proposal was rejected on the ground that the issue was too small to be taken up by the President.

In the present world the nations are vying for market access and strongly feel that they need 'no aid but trade' to ensure their economic prosperity and to provide jobs to their youth who could be easily become tool in the hands of terrorists.

If on one hand the EU imposed the anti-dumping duty without meeting all the norms of justice on the other it had been badly mishandled by the Pakistani side. Therefore, it could be easily said that the bedlinen is a worst case scenario in the entire textiles and clothing as the exporters of this product would be paying 25.1 per cent duty in the free market era whereas their competitors will have no punitive duties.