ISLAMABAD, July 2: The European Union has initiated an anti-dumping proceeding against Pakistani exporters for alleged dumping of PET Resin in EU markets.
Well-placed sources told Dawn on Wednesday the EU manufacturers have lodged a complaint with the EU secretariat at Brussels for initiation of anti-dumping investigation against imports of PET Resin from Pakistan, which they believed were causing harm to sales and prices of their production in European markets.
The PET Resin is bottle grade polyester chip, which is used in production of PET bottles. During the current year, exports of PET Resin touched the figure of $70 million, which was expected to be raised to $90 million in the next year.
“This was made possible following the acquiring of expertise and market access agreement between the EU and Pakistan by the end of 2001, which comes into effect from January 2002,” sources said, adding the main market for Pakistani PET is Europe, where more than 80 per cent of Pakistani PET exported to EU member countries.
Following the complaint, the EU has sent notice to two Pakistani companies manufacturing and exporting the PET Resin — GATRON, Karachi, and Novatex, Karachi, — for compliance in this regard. When contacted, the companies chief executive Razak Dewan confirmed to Dawn on Wednesday that they had received notice from the EU against alleged dumping of PET Resin in European markets.
“Initially, we are replying to the EU notice shortly to apprise them of the situation. However, in case they are not satisfied with the answer, then they might sent a team of auditors to investigate the case,” he said.
He further said the company had also hired a lawyer at Belgium to defend the alleged case of dumping against Pakistani exporters.
According to the sources, Pakistani PET products did not pose the same threat to the EU as other countries like Taiwan, China and Korea. The total PET production is only 6-7 per cent of EU production capacity, while production capacity of each of those of China, Taiwan and Korea is two times the capacity of EU PET production capacity.
The sources said it was high time for the government to mobilize support to stop the anti-dumping measures against Pakistani PET exports to the EU in view of the fact that Pakistan’s PET Resin exports were only 3-4 per cent of PET production of European PET producers and were not causing any significant injury to EU producers.
Elaborating the impact of possible levy of anti-dumping duty on Pakistani PET, the sources said Pakistan would lose $90 million share in its exports of this non-traditional product because Pakistani producers would not be able to compete against world scale producers, who were vertically integrated and having their own raw material — PTA/MEG production unlike the Pakistani producers of PET Resin.
They said billions of rupees invested in Pakistan PET industry would not only go waste, but it would also result in laying off jobs.
According to the sources, the possible imposition of anti- dumping measures just one year after the commencement of Pakistan’s exports to the EU would diminish the value of the General System of Preferences system and discourage Pakistani and other developing countries’ producers from relying on the availability of GSP tariff while making investment decision.
The sources said proceeding against PET of Pakistan aimed at further increasing the dominant market power of multinational corporations of PET producers and wielding undue influence over EU market.