KARACHI (December 03 2002) : The European Union withheld 4,000 tonnes of flexibility quota for Pakistan textile exports creating problem of acute unavailability of quota in different categories, textile industry sources revealed.
The allocation of flexibility quota is a natural entitlement of Pakistan under the bilateral agreement with the EU. The action believed to be the result of Europe's displeasure over Pakistan's recent purchase of Boeing ignoring Airbus of the European origin.
The withholding of flexibility quota seems to be second vindictive action against Pakistan because of the aircraft deal. Earlier reports suggested that the EU is contemplating anti-dumping duty on export of bed linen from Pakistan.
The Secretary Commerce, Mirza Qamar Baig, has dashed to Brussels to take up the crucial issue of flexibility quota. He would also discuss the issue of stoppage of Pakistan's textile shipments in Category-9 in Rome.
Sources said that Pakistan has strong case for allocation of flexibility quota, which is guaranteed under the bilateral trade agreement. The Commerce Secretary during his talks with the EU authorities would draw their attention to the relevant clause of the agreement providing for flexibility quota towards the end of the quota year on December 31, 2002.
The EU granted lucrative concessions to Pakistan in January this year, including 15 percent additional quota and a waiver of import duty on imports from Pakistan. The concessions were far better than those granted by the USA in the aftermath of September 11 incident that caused a major dent to exports from Pakistan.
Then came the Pakistan's decision to purchase Boeing instead of Airbus. This seems to anger Europe, which is now bent on slowly withdrawing all concessions granted to Pakistan. Pakistan's textile exports would suffer in leaps and bonds if the EU withdraws trade concessions.