Hailey College of Banking & Finance Lahore
Aug 25 - 31, 2008

Pakistan People's Party chairman Asif Ali Zardari once said that the new PPP-led government wanted to improve economic relations and would not allow the differences on Kashmir to come in the way of this....! Following such direction of thought of his leader the Commerce Minister Ahmed Mukhtar said a decision had been taken that if "Indian manufacturers of CNG buses made a firm commitment to establish manufacturing of such buses in Pakistan," his Ministry might allow the import of 10 buses by road via Wagah "from each possible investor as test consignments".

Historically, it has been proved many times that any step taken or accepted by the Indian authorities towards improvement of trade relations between the two countries India and Pakistan was ultimately a political step for weakening Pakistan on political and economic fronts. A glimpse of such an intention becomes evident at this time even when a leading journalist of an Indian National Newspaper "The Hindu International" stated in his article published on 20th of July 2008 that "In a significant shift of policy, Pakistan has for the first time put aside its deep-seated sentiments over Kashmir to invite foreign direct investment from India".

One wonders why the newly elected Pakistani government has shifted its entire paradigm of trade towards India when at the same time many good options of trading for Oil, Energy, Capital Goods etc., are available in trading with Iran and China! What is special with India? Furthermore, as Pakistan has taken all steps unilaterally without seeking any relaxation for Pakistani Products and/or exporters therefore the only nation benefiting from the whole of this paradigm shift will be India. The whole of the matter seems like if somebody is taking Pakistan under coercion to take steps against its own interests. Without going into further details on purely political front the following are some political-economic factors of initiating such a liberal trade with India:

* Price undercutting

* Price depression

* Price suppression

* Actual and potential decline in sales volumes

* Actual and potential decline in revenue (sales value)

* Actual and potential decline in profit

* Actual and potential decline in output

* Actual and potential decline in market share

* Actual and potential decline in productivity

* Actual and potential decline in return on investments

* Actual and potential decline in capacity utilization

* Actual and potential decline in total and net cash flow

* Actual and potential decline in growth

* Decrease in inventories

* Decrease in employment

* Increase in wages

Considering the threat to the Pakistani Economy from the threats as listed above if there is reasonable evidence of injury from dumping, provisional measures can be imposed by the Government of Pakistan that shall consist of the following:

* The extent to which there has been or is likely to be a significant increase in the volume of dumped goods, either in absolute terms or relative to production or consumption;

* The extent to which the prices of dumped goods represent significant price undercutting in relation to prices in Pakistan;

* The extent to which the effect of the dumped goods is or is likely significantly to depress prices for like goods of Pakistan producers or significantly to prevent price increases for those goods that otherwise would have occurred;

* The economic impact of the dumped goods on the industry, including actual or potential decline in output, sales, market share, profits, productivity, return on investments, and utilisation of production capacity; the margin of dumping; factors affecting domestic prices; and actual and potential effects on cash flow, inventories, employment, wages, growth, ability to raise capital, and investments;

Although an investigation could establish that there may be both volume and price effects, but an analysis of the consequent impact on the industry could lead to the conclusion that the industry is not suffering material injury, particularly if important indices of that impact, such as output, sales, and profits, are not showing any actual decline. A determination of whether or not there is material injury caused by dumping is based on consideration of all of the factors involved including as referred above, and an assessment of the extent to which the totality of the evidence leads to the conclusion that a domestic injury is being materially injured by the dumped goods. The existence of a decline in one or several of the injury factors or indices does not require a determination that material injury is being caused by the dumped imports, if the totality of the evidence does not support such a conclusion.