ISLAMABAD, Dec 10: The government has decided to challenge the decision of Egyptian Investigation Authority (EIA) to levy 29 per cent duty on Pakistani matches in the dispute settlement body (DSB) of WTO.

Official sources told Dawn that the decision was taken in the meeting of the Board of Administrators of Export Development Fund (EDF) headed by Federal Commerce Minister Humayun Akhtar Khan here on Friday.

It was agreed that EDF would bear 50 per cent cost of the lawyers to be engaged in WTO for the purpose. 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 has been imposed.

The issue of anti dumping duty on Pakistan matches was raised in the month of August 2002 on a complaint made by M/s Nile Match & Egyptian Match Co. to the Egyptian Investigating Authority (EIA).

Both the Egyptian companies in their complaint alleged that dumped imports of matches from Pakistan are causing material injury to the Egyptian match industry.

The officials believed that anti-dumping duty on matches was illogical and could not be justified under the 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 match industry is the only export-oriented industry of NWFP and employees around 5000 workers. Such anti-dumping action could also affect the jobs of hundreds of agriculturalist and farmers, who provide poplar wood to the match industry, they added.

Pakistan is exporting matches to almost all over the world but none of these countries have levelled any sort of allegation, the official said and added that the most important factor is that Pakistani manufacturers are using locally available raw material with low conversion cost.

Whereas the Egyptian companies are importing all the major inputs so they could not compete with Pakistan-made matches in the Egyptian market, they added. The EDF board also approved and sanctioned amount to enable Export Promotion Bureau (EPB) to facilitate exporters by agreeing to pay freight charges of shipments made between January 1- 20, 2005.

The EPB had already announced the facility of paying the air freight of those shipments which were made against valid quotas and confirmed orders in those categories where there would be embargo in the US.

The Board agreed to finance this operation from the EDF as it was of the view that these steps were necessary for maintaining exporters-importers relationship, particularly on the eve of quota free regime commencing from January 1, 2005.

It agreed to pay from EDF the air freight and gave the options to the exporters to ship by sea between January 1 and January 20, 2005. If the exporters so desire, the EDF will provide 50 per cent of the air freight equivalent, to the exporters of such categories.