ISLAMABAD, April 6: The European Union has offered a tariff rate quota on Pakistan’s bedlinen exports to its member countries in order to reduce the impact of anti-dumping duty on the export of the commodity. Well-placed sources told Dawn on Wednesday that the EU had initially offered around 35,000 tons yearly quota for the export of bedlinen to the EU states. Pakistan’s export of bedlinen to the EU-member countries was in the range of around 60,000 tons.

With the definitive 13.1 per cent anti-dumping duty, Pakistani bedlinen attracted customs duty at the rate of 25 per cent (13.1 per cent anti-dumping duty and 12 per cent normal duty earlier exempted under the GSP scheme) from January 1, 2005 in the EU markets.

This high duty has not only affected the export of bedlinen to the EU, but also increased the prices of Pakistani bedlinen in the EU market.

Elaborating further, the sources said the offer of tariff quota was a new turn in the EU policy to provide a protection to its manufacturers by restricting import of bedlinen from Pakistan.

The EU had earlier given an assurance to Pakistan that it had the power to suspend the anti-dumping duty on Pakistani bedlinen until the review process was completed by end of 2004. But later it linked the suspension of anti-dumping duty of 13.1 per cent with the signing of a readmission agreement with Pakistan, added the sources.

During this period, the EU states also agreed to reduce the anti-dumping duty to 1.1 per cent from 13.1 per cent so that following the graduation of clothing and made-ups from the drug-related generalized system of preferences (GSP) scheme of zero duty from January 1, 2005, the actual levy of duty on Pakistani bedlinen would remain at 13.1 per cent.

According to the sources, some exporters have asked the government to challenge the EU decision in the Dispute Settlement Body (DSB) of the WTO.

“The offer of tariff rate quota on bedlinen showed that the anti-dumping duty was not levied on actual basis of dumping margin. The EU has rather admitted that the case did not exist,” added the sources.