As expected, the United States of America have slapped tariffs of about 44 percent to 60 percent on Pakistan’s exports of PET resin. Given past experience and Trump’s stance, the anti-dumping duties were expected. Nor is there a chance of respite in the foreseeable future; the US Commerce department boasts that since the beginning of Trump administration, there has been a 221 percent in new anti-dumping and countervailing duty investigations.
US is an important for Pakistan’s PET resin export which have tripled in value from $20 million in FY10 to nearly $64 million in FY18. While countervailing duties were lifted by EU in 2015, Pakistan has as yet to recover lost ground. Dependence instead shifted to the US which accounted for over 41 percent of PET exports.
As per US media reports, aggressively priced PET resin imports have risen four times in volume from 2014 to 2016, climbing from 74,000 tons to nearly 300,000 tons. The bulk of this volume stemmed from Taiwan with exports from Pakistan contributing less than 15 percent of the rise. Interestingly however, exports from Pakistan have increased roughly 4 times year-on-year in the first two months of the fiscal year.
On the positive side, there are greener pastures at home. The PET industry is showing double digit growth rate of 10-15 percent per annum. The shift of packaged beverage heavy weight Nestle from tetra pack to PET bottles (read “On Nestle’s newest PET packaging” published on August 31, 2018) may start a trend that could further drive domestic growth rates.
In the past the industry has shown resilience. When EU slapped duties, part of the exports shifted to Turkey. Countervailing duties imposed by Turkey shifted exports to the US. In the last few months before final anti-dumping duties were imposed by the US, Pakistan’s exports increased manifold to make hay while the sun shone.
The EU has over $4 billion market for PET resin while Canada has removed anti-dumping duties albeit with conditions. Despite restricted access to US, Pakistan’s PET exports can work towards increasing lost EU market share. Rise in consumption domestically will allow the industry to continue on its double digit growth. Even if the US market is lost, there are greener pastures elsewhere.
Comments
Comments are closed.