Pakistan faces yet another
anti-dumping proceedings on its export of bed linen to the European
Union (EU). The country had faced similar proceedings, with provisional
anti-dumping duty, in the past. However, this time the issue of call
notice seems a little astonishing because the EU had enhanced textile
quota as well as withdrawn 12% duty in November 2002.
The call notice has caused mixed
feeling among the Pakistani exporters of bed linen. Some exporters say,
"It is not surprising because Pakistan managed to capture major
share in the EU as well as the US markets. The local manufacturers are
not able to compete with Pakistani exporters and are loosing their
market share gradually. The call notice has been issued to pave way for
imposition of anti-dumping duty, apparently the only alternative
available to curb export of bed linen from Pakistan."
However, some other analysts say,
"Protecting the local manufacturers is not the objective as stated
in the call notice. The real motive is to exert pressure on Pakistan due
to mounting anti-US sentiments in Pakistan, particularly the anticipated
US attack on Iraq. The other reason behind the move seems to be
Pakistan's decision not to buy Airbus type aircrafts. It seems that the
EU was expecting return of favour that was not reciprocated. "
Some analysts say, "The EU
stand that export of bed linen from Pakistan has caused damage to local
manufacturers lack substantial evidence. The call notice has been issued
on the complaint of Eurocotton, an association of textile manufacturers
and traders. Technically, a trader is not competent to move an
application for an investigation against dumping, it has to be moved
only by the manufacturers."
Some Pakistani exporters say,
"As the world is moving closer to complete quota phase out, the
manufacturers from the importing countries are putting pressure on their
respective government to exercise some constraints to block the
onslaught. We have witnessed such moves in the recent past and the
frequency of anti-dumping investigations call notices is expected to
Some exporters say, "We
should not be scared of such call notices. We enjoy comparative
advantage over the manufacturers of textiles and clothing from the EU
and the US. We can offer prices that are competitive. We produce
superior quality. Our superiority has been proved by the fact that
Pakistan enjoys 6% share in the global trade of bed linen. With the
establishment of state-of-the-art textile processing and bed linen
manufacturing facilities, Pakistan's export of the commodity is poised
to touch new highs. Therefore, the manufacturers from the importing
countries have to make efforts to retain their market share."
They also say, "We should
not follow a apologetic approach or request for a sympathetic treatment.
We must counter these allegations systematically and professionally. We
have countered these allegations successfully in the past. However, such
participation in these proceedings cost substantial amounts because we
lack local expertise."
It is necessary to mention here
that in the past Akbar Sheikh, a textile tycoon from Lahore, tried to
put together the local expertise but got only limited success due to
poor response from the textile industry as well as the GoP. Responding
to the call notices is very technical as well as time consuming. Though,
the Export Promotion Bureau had established a WTO Cell, the lack of
expertise could not be overcome as yet.
If the local exporters of
textiles and clothing wish to retain their market share in quota free
environment they must understand that there will be more and more call
notices. Therefore, developing the local expertise is very necessary. It
has many facets, i.e. knowledge of local as well industry in importing
countries, precise costing procedure and above all legal framework
followed in such proceedings.
Some sector experts say,
"One of the factors providing an opportunity to importing countries
for initiating anti-dumping proceedings is improper cost accounting.
This weakness can be overcome through cost audit. In the past efforts
were made to make cost audit compulsory, along with financial audit but
textile industry put the highest resistance against the move."
is worth noting that most of the bed linen exporting companies, having
received the call notices, are public limited companies. All the public
limited companies in the country are required to follow International
Accounting Standards. It is a general feeling that the local companies
often do not take into account the full costs. Not following the
international practices encourages the importing countries to allege
that Pakistani manufacturers are selling their products to foreign
buyers at a price that is lower than the cost or prices lower than that