ISLAMABAD: Pakistan is considering withdrawing a suit filed against the European Union at the World Trade Organisation in 2014 over imposition of countervailing duties on export of polyethylene terephthalate (PET).

The decision was taken in the wake of expiry of EU’s countervailing duty on the chemical, a senior official of the ministry of commerce told Dawn on Monday.

The EU had imposed countervailing duties on import of polyethylene terephthalate from Pakistan, Iran and the United Arab Emirates in June 2009. As per trade remedy laws, the countervailing duties remained in vogue for five years and expired on Sept 30.

According to the official, the EU actually decided not to review the extension in countervailing duties following realisation that Pakistan has actually challenged the five per cent countervailing duty on PET exports in the WTO’s Dispute Settlement Body.

The EU has already achieved its objective to provide enough protection for five years to domestic producers of PET against cheap imports from Pakistan, Iran and the UAE.

A diplomatic source told Dawn that the commerce ministry is celebrating the EU’s decision for not making further extension in the countervailing duties. However, the official said it will be mandatory for Islamabad to formally withdraw its case from WTO.

The WTO’s Dispute Settlement Body (DSB) established the panel on March 25 to study the complaint related to the trade-restrictive tax measures imposed by the EU on Pakistan’s exports of PET.

Pakistan’s PET exports to the EU dropped drastically to 10,000 tonnes last year from 85,000 tonnes in 2009 when there was no countervailing duty on imports of PET from Pakistan.

The EU Minister Counsellor, M. Hutunen, has also written a letter to the WTO panel that the duties have already expired.

The EU formally requested the WTO panel to terminate its work. It, however, said that the panel can still make findings with respect to the measures that expired during the course of the proceedings.

Since measures have expired, the EU considers that those measures do not nullify or impair Pakistan’s right under the WTO agreements, the letter said.

The EU further noted that terminating this dispute would also contribute to easing the backlog situation.

Published in Dawn, October 6th , 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play