EU Textile Sops To Pak: WTO Rules In Indias Favour

New Delhi, Sept 22: | Updated: Sep 23 2003, 05:30am hrs
India has registered yet another win at the World Trade Organisation (WTO). A recent WTO panel ruling has upheld New Delhis contention that Brussels unilateral decision in extending a package to the Pakistani textile sector had affected Indias textile exports estimated at about $250 million so far. Notwithstanding the 2:1 ruling in the case, there are indications that the European Union (EU) will go in appeal before the WTO appellate body, say commerce and textiles ministry officials.

Last April, New Delhi had scored a victory over EU in the cotton bed linen case. Following the appellate bodys verdict, Brussels had recently revoked the anti-dumping duty on the product.

Officials said the panel had been set up in January this year at New Delhis instance. Under the three-year GSP scheme from January 1, 2002, Brussels had extended a special tariff arrangement to Pakistan to combat drug production and trafficking. This had adversely affected Indias textile exports to EU, New Delhi pointed out during the panels oral hearings in Geneva.

Officials said the main benefit to India from the ruling was that the competitiveness of its textile exports to EU would greatly improve. Islamabad will have to pay the most-favoured-nation (import duty) at 12.5 per cent as New Delhi had been paying at present, officials said.

They were however quick to point out that Islamabad continued to enjoy some concessions under the bilateral agreement with Brussels which New Delhi did not have.

As per the agreement, Pakistan had agreed to lower the import duties on all its textile products across-the-board by 5 per cent from January 1, 2002, for three years until December 31, 2004, for obtaining duty-free entry into EU market.

During this period, the duties were to be cut by 5 per cent in 2002, 15 per cent in 2003 and 25 per cent in 2004. At the end of this period, the export quota regime under the agreement on textiles and clothing will be phased out and the entire sector would be open for global competition.

Officials also said that the compounded annual growth of Pakistani textile exports to the 15-member EU had increased during 2002, while that of India had declined.

The textiles and clothing sector is a major segment of the economy of the Third World countries, including India.