KARACHI, Jan 20: The European Commission (EC) is likely to suspend the anti-dumping duty of 13.1 per cent imposed on bed-linen imports from Pakistan.

The EC member states are holding meeting on Friday, January 21, 2005, to give their consent through voting on the issue, officials sources said on Thursday.

Pakistan has entered the quota free era (January 1, 2005) with 12 per cent customs duty on graduation from the EU's generalized system of preferences (GSP) along with 13.1 per cent anti-dumping duty on imports of bed-linen to EU member states. Consequently the combined negative impact of 25.1 per cent on its bed-linen imports to European market have almost pushed Pakistani exporters out of the race at a time when they could have not only protected their existing market share easily but expanded it on solid ground.

Pakistani bed-linen is quite popular in the west (US and Europe). They are not only of high quality and competitive in price but also carry good designs and colours. However, the punitive duty of 13.1 per cent, at a time when free market era has begun, is tantamount to pushing them into an arena with arms tied at the back.

Despite a host of factors that have contributed to a positive development including involvement of the President Pervez Musharraf and strong lobbying by the Minister for Commerce Humayun Akhtar Khan, but hiring of four lawyers for pleading the case in such a situation when the definitive anti-dumping duty was imposed on March 5, 2004, produced good result.

The sources said that there are strong indications that the EC members on Friday would suspend the punitive duty or may propose to slash it by 12 per cent to keep the balance of 1.1 per cent till the outcome of on ongoing partial interim review of anti-dumping measures.

Meanwhile, EC investigation team for on ground verification of six sample companies/exporters is soon visiting Pakistan. The companies selected for verifications include Younus Textile, Al-Abid, Chenab, Gul Ahmed, Lucky and Nishat Textile Mills.

Early last year the EC imposed 13.1 per cent definitive anti-dumping duty on bed-linen imports from Pakistan. However, exporters agitated the move on the ground that the duty was imposed on the basis of incomplete investigations. They argued that without completing investigation the EC could not imposed punitive duty.

Consequently, the EC exactly one month after the imposition of the duty took a suo moto decision and offered to review its decision. In August last year the Commission in its official journal issued a notice for the initiation of a partial interim review of the anti-dumping measures.

It was equally interesting that the commission for the first time has officially accepted the fact, though in its own way, that "as part of its investigation, which led to the imposition of the existing measures, the commission had planned to visit the premises of a sample of Pakistani companies of the product concerned.

However, during the course of the visits, the commission considered that the necessary security conditions to carry out the planned verifications were not met and the visits had, therefore, to be interrupted."

Another positive aspect of the development was that the EC exceptionally proposed to initiate an interim review, limited to dumping aspects in order to give the opportunity to Pakistani companies or exporters to help the EU carry out investigations which better reflect their situation.

This means that the commission will not be taking the "injury" part of the dumping which is a normal practice for such investigations. Late last year President Pervez Musharraf during his visits to South American countries and US and some European countries took the issue of market access and preference issue with the heads of these countries. This also in a way influenced the matter and hopefully the EC will suspend the punitive duty so that Pakistani exporters could have their share in free market era.