The flow of textile exports to the European Union (EU)
has been disrupted following a decision by the EU Commission to put an
embargo on the imports of certain categories in which over programing
was done by the exporters against the allotted quota.
The embargo has been imposed on category 6 (shorts
and pants) and bedlinen. However, the EU Commission which had disallowed
the special flexibility quota of 4000 tons annually, has allowed
flexibility quota of 2000 tons in category 9 (towels). This would,
however, provide relief to the exporters who have already made shipments
in this category.
It may be mentioned that the EU Commission has
already initiated anti-dumping proceedings on bedlinen imports from
Pakistan. Pascal Lamy, EU Commissioner for trade in a meeting with
Pakistan's Minister for Commerce, Humayun Akhtar who visited EU in
connection to get relief especially to get flexibility quota, has said
that the process for anti-dumping could not be interrupted at this stage
as the legal course has to be completed in normal course.
Pakistan textile exports, it may be recalled, had an
edge over its counter parts especially over India because Pakistani
goods were free from any anti-dumping or regularity duties as compared
to Indian goods on which the antidumping duty was already imposed.
However, some circles in the textile sector say that anti-dumping duty
and embargo on certain categories has come in mainly because over
programing of the quota by the exporters. It is said that a large size
of over shipped consignments of textile goods are stuck up at different
ports of the EU states. Pakistan's Minister for Commerce had visited EU
to get this problem sorted out with the EU Commission.
Contrary to the usual practice, the EU which
generally allows special flexibility quota of around 4000 tons in
different categories did not give its consent for flexibility which
created hardships for the exporters indulged in over programing.
The hanging shipments waiting for clearance are in
category 6 of around 2.88 million pieces against its annual allowed
quota of 46 million pieces, while in category 20, the over shipment is
around 1200 tons against the allowed quota of 50,000.
The Export Promotion Bureau reacting over the
situation has suspended the licence for the export of bedlinen to EU
obviously to avoid over programing which resulted over-shipments and
initiation of anti-dumping proceeding by the European Commission against
Pakistan cotton type bedlinen. In order to avoid recurrence of such a
situation and let the exports to sail on a smooth keel, people at the
helm of affairs are required to be cautious about any step on the part
of the exporters which might result in creating problems for the private
sector it self.
Currently, the textile sector has performed
exceptionally well during the first half of the current year and if the
current pace for progress maintained the textile sector alone would help
getting country's overall exports well ahead target at the end of the
current financial year. The current financial year has seen a
continuation of the shift in Pakistan's export structure towards
manufactured goods which reached an all time high of the total exports.
Although in the backdrop of September 11 events the Western world
especially, the EU and US have given special incentives to Pakistan's
export sector, yet the Asian region still remains the largest export
market for Pakistani products.
During the previous year, the total export earnings
fetched by the textile sector were estimated at $5.8 billion. The
textile sector is performing even better as compared to the previous
year and seems to improve its overall contribution to the export
earnings this year. All these outstanding achievements by the textile
sector are the result of enhanced market accessibility as well as
successful Balancing-Modernisation-Replacement (BMR) drive currently
underway to revitalize the textile sector to face the challenges of a
quotafree environment from 2005.
In the previous year, quota exports accounted for
39.8 per cent of total export of textile manufactures and earned $2.3
billion registering a 1.7 per cent growing over financial year 2001.
Exports of non-quota textile items earned an additional $1.4 billion,
showing a 5.3 pr cent increase over the previous year.
During the second half of the financial year 2002
quota exports to EU depicted a slightly higher growth of 11.3 per cent
which clearly shows that impact of 15 per cent quota increase from
January last year. On the other hand, the impact of quota enhancements
by the USA is not yet clearly visible as textile industry in the US is
already facing difficult times due to economic depression.
There are strong indications that the textile sector
in Pakistan is gradually getting into a position where it can perform
without the quota support and protections as a result of an impressive
investment on BMR, which ultimately leading towards value-addition and
quality improvement. The light at the end of the tunnel is getting
bright and hopefully, the textile sector which is undoubtedly the
mainstay of the national economy would rise to the occasion in a free
trade environment in the years to come. The sector, however, speed-up
its efforts to be able to compete in the open global market.