KARACHI, Oct 13: The European Union has agreed to adopt Minimum Export Price (MEP) mechanism instead of imposing anti-dumping duty on bedlinen (category 20) imports from Pakistan.

An understanding to this effect took place during a recent visit to Brussels of a four-member bedlinen delegation who held a follow-up meeting with the EU’s chief on anti-dumping.

The EU Commission in its preliminary finding early August had suggested to impose 45 per cent anti-dumping duty on bedlinen imports from Pakistan.

Subsequently, a group of leading bedlinen exporters last month held a meeting with the Commission officials. During the meeting the Pakistani exporters suggested for adopting MEP mechanism to check dumping, if any, but the same was rejected by the EU Commission on the ground that it would be difficult to monitor.

However, the EU Commission gave counter suggestion of ‘tariff quota’ mechanism which could even had gone beyond the quota regime ending on December 31, 2004. Under the tariff quota the Commission suggested to fix a ceiling of 40,000 tons on the import of bedlinen and above that it would impose 20 per cent anti-dumping duty.

The EU softened its stance on the issue after Commerce Minister Humayun Akhtar Khan held a meeting with EU’s trade chief Pascal Lamy on the sidelines of the WTO ministerial conference held last month in Cancun, Mexico.

According to the understanding, the MEP would also go beyond the quota regime and it would be imposed on all the six categories or qualities of bedlinen based on count and weight per kilogramme.

Nevertheless, the most important point or clause of this agreement will be that in case of violation an individual exporter will be responsible and have to face anti-dumping duty to a maximum of 20 per cent on his exports.

In other words, this understanding will fall under bilateral agreement with the EU and will be out of the preview of the WTO. Individual exporter will have to sign MEP document, which will be a sort of an undertaking for abiding the agreement on the price.

At present around 200 bedlinen exporters are engaged in trade with EU member states and have a total quota volume of 60,000 tons, earning around $400 million per annum. But the question is if this arrangement on bedlinen was reached with the EU what implications it would have on exports of other textile goods from Pakistan?

Former Pakistan Bedwear Exporters Association (PBEA) chairman Shabir Ahmed appreciated the efforts of the commerce minister in convincing EU trade chief Pascal Lamy to soften their attitude towards Pakistan.

He said that in principle the EU had agreed to the MEP mechanism but the floor price was yet to be fixed which would be agreed upon in the next meeting to be held in a period of two weeks.