KARACHI, Feb 17: Exporters have decided to boycott all European machinery, dyes and chemicals worth about $3 billion to mark their protest against the proposed 12.1 per cent anti-dumping duty being enforced by the European Commission from March 18, 2004.
"Henceforth, we will not place any import order for textile machinery, dyes and chemicals being mostly imported from European Union member states and will go to Far Eastern countries as an alternate source."
This was the resolve of textile industry leaders belonging to various segments, including bedlinen, towels and Aptma, at a press conference here to lodge their protest over the proposed anti-dumping duty on Pakistani bedlinen.
"Yes, I declare the cancelling of my machinery and chemicals import orders from EU member states," stated a leading manufacturer and exporter of bedlinen, Naseem Sattar.
Another manufacturer and exporter of towel S.M. Obaid also announced to cancel machinery import order from the EU at the press conference. The exporters feel that President Pervez Musharraf should take up the dumping issue with officials of a high-level European Commission's team due to visit Islamabad soon. They think that without taking the matter at political level the desired results or justice could not be achieved.
The EC team, led by Chris Pattern, political commissioner of the Commission, is accompanied with foreign minister of Ireland who is the current president of the Commission, and Dutch foreign minister who is vice-president of the EC. Beside meeting the commerce minister the EC team will also hold talks with President Pervez Musharraf.
The participants observe that the EU duty on bedlinen was contrary to established norms and ethics. Bashir Ali Mohammad led the team of textile manufacturers and exporters and was assisted by Efroze Lari and Naseem Sattar.
"There is a general feeling among the exporters of bedlinen that they are being dragged to an unproductive activity, and it seems that the EU wants to gain some time by keeping us bogged down in such a matter which will ultimately benefit the EU, if taken to the appellate tribunal of the WTO," they argued.
"The EU never favoured us by allowing 15 per cent more access to their market which surged our bedlinen exports to EU member states. The customs duty concession was only allowed after Pakistan reciprocated," they said.
The exporters say that Pakistan is the biggest importer of machinery and dyes and chemicals from European countries and the EU has not been doing any favour by giving market access or duty concessions under the GSP which is also being withdrawn from next year after the European Commission recently announced the graduation of Pakistan from the GSP.
This would mean, Bashir Ali said, the re-imposition of ordinary customs duties of 12 per cent from January 1, 2005 along with 13.1 per cent punitive duty from March 2004 will totally cripple the country's exports worth over $350 million to the EU market.
He was critical about the fairness of dumping margin calculation by the EU investigation team and said the use of a deemed profit margin on bedlinen sales to the EU of only 3.5 per cent based on isolated statements taken out of the context ignoring the fact that prices of Pakistani exporters were higher, and in stark contrast to the profit margin of 6.5pc the Commission had taken for the EU industry.
Bashir Ali said the use of deemed profit margin at 3.5 per cent resulted in domestic profit margin of the Pakistani exporters at 11.34pc, whereas the EU had used domestic profit margin of 5pc for Indian exporters.
Referring to the fairness of the injury and causation assessment, he said it was seriously compromised by the failure to consider the effect on EU community's producers market share and profitability of production which they purposely moved out of the EU, especially when nearly all of the economic indicators of the community (European) industry were positive for the investigation period.
He alleged that there was also a failure to consider the entirely predictable effect of the lifting of quota on Pakistani bedlinen and the removal of normal duty and illegal anti-dumping duty on that same product between 2000 and 2002.
In the light of these factors, he said, an objective observer could easily interpret the adoption of the Commission's current proposal as a sign that the European Union was looking to put Pakistan at a marked disadvantage on the international scene.
Bashir Ali said: "We are not seeking any favour or dole from the EU except for our due right. European countries benefit by getting huge orders form us for new technologies and other industrial raw materials."