That the Appellate Body of the World Trade Organization (WTO) ruling in favour of Pakistan and against the European Union with respect to the imposition of provisional and definitive countervailing measures by the latter on imports of certain polyethylene terephthalate (PET) from Pakistan, and with respect to certain aspects of the investigation underlying these measures is first drop of rain insofar as the present state of country's drought-hit economy is concerned. In its complaint, Pakistan had strongly argued that the EU measures appeared to be inconsistent with several articles and annexes of the SCM Agreement; and Article VI of the GATT 1994.
The European Union had imposed crippling trade defence duties on the import of PET from Pakistan, in June 2009. Pakistan's permanent representative to the WTO Dr Tauqir Shah of the Model Town tragedy fame has been quoted as saying that "the European Union had imposed countervailing duties thereby challenging our Manufactured Bond Scheme (MBS) administered by the Federal Board of Revenue, and many prevailing commercial practices in Pakistan. This ruling will dissuade and restrict other member countries from applying such trade restrictive measures against Pakistani exports and has sanctified our schemes and their administration, namely MBS." According to the ruling, the point relating to the MBS scheme which went in favour of Pakistan is that the European Commission (EC) considered that it was appropriate to countervail all remissions, rather than excess remissions. The appellate body, which is supreme body in the WTO dispute system, did not agree on this account with the EU. The Panel dealt with some fundamental issues relating to what constitutes a 'subsidy' under WTO rules. He has also explained that these issues were addressed in the context of a 'duty drawback' scheme, under which domestic producers can obtain reductions of import duties paid on inputs that are consumed in the production of exports. Pakistan has always met its WTO obligations, and this ruling of the panel clearly demonstrates that the Pakistan government's trade policies and export promotion policies are strictly in accordance with the WTO rules. WTO has endorsed Pakistan's administration of export policies. In the present environment of protectionism, this decision will go a long way in protecting our trade globally.
This newspaper wishes to commend the efforts of all those involved in getting Pakistan relief at the global trade forum, including the current Pakistan representative at the WTO and former principal secretary to Punjab Chief Minister Dr Tauqir Shah, FBR, the National Tariff Commission, the State Bank of Pakistan, the private sector exporting PET and the Ministry of Commerce. Last but not least, the Minister and secretary Commerce, who personally monitored the progress of this very important trade dispute, deserve profuse appreciation. Dr Shah has been found to be magnanimous in victory: "There are no winners or losers; every dispute decided at the WTO is a victory for the rule-based multilateral trading system as this is about global rule of law. As a friend of the system, Pakistan takes its legal obligations and rights very seriously." This victory, however grand, must not instill any sense of complacency among our policymakers as the battle for raising country's exports to earn adequate foreign exchange to deal with the challenges of current account is still far from over.