According to the ruling, the point relating to the MBS scheme which went in favour of Pakistan is that the European Commission (EC) considered that it was appropriate to countervail all remissions, rather than excess remissions. The EC was obviously wrong to do this. The Panel did not agree on this account with the EC.
The Panel dealt with some fundamental issues relating to what constitutes a ‘subsidy’ under WTO rules.
These issues were addressed in the context of a ‘duty drawback’ scheme, under which domestic producers can obtain reductions of import duties paid on inputs that are consumed in the production of exports.
Pakistan has always met its WTO obligations, and this ruling of the panel clearly demonstrates that the Pakistan government’s trade policies and export promotion policies are strictly in accordance with the WTO rules, an official of the commerce ministry said.
“This will be a big moment for Pakistan and the multilateral system, where an economic giant like the EU is challenged by Pakistan in a WTO dispute system”, the official said.
According to the official, the WTO has endorsed Pakistan’s administration of export policies. “In the present environment of protectionism this decision will go a long way in protecting our trade”, he commented.
A leading trade litigation expert said that he was not sure this is a case to be celebrated. The EU imposed duty in 2010.
The exporter kept running around to convince the relevant agencies to file the case. It took them five years to do so and only after the EU had removed the duty.
However, he said the only good that can come out of it is that Islamabad should be bolder and file cases when Pakistan’s exports are being hurt rather than keep shuffling the files for five years.
The expert suggested the government make those people accountable who kept on sleeping on the case from 2010 to 2015.
The ruling also proves that the trade body has tremendous value for developing countries, wherein the system gives them the right to challenge other big and developed economies
When contacted, Dr. Tauqeer Shah in Geneva further told this correspondent that the panel ruling was the result of very coordinated efforts by all stakeholders in the government of Pakistan, namely, the FBR, the National Tariff Commission, the State Bank of Pakistan, the private sector exporting PET and the Ministry of Commerce.
He said there is lot of learning for our relevant institutions, like the FBR and the Ministry of Commerce, vis a vis administration of our trade facilitation schemes and it documentation. “We have to play by the global rules of the game, and be prepared for strict scrutiny”, he said.
“There are no winners or losers, every dispute decided at the WTO is a victory for the rule-based multilateral trading system called the WTO, this is about global rule of law, wherein multilateral systems guarantee the rights of developing countries,” he said.
In short, the panel ruling also proves that the WTO is unique and has tremendous value for developing countries, wherein the system gives them the right to challenge other big and developed economies through fair, impartial and transparent procedures.
Published in Dawn, The Business and Finance Weekly, July 17th, 2017