Issue Brief on “Pakistan Wins Trade Dispute with EU at WTO”

Recently on May 16, 2018, the supreme dispute settlement body of the World Trade Organization (WTO) in Geneva, the appellate body, ruled in favor of Pakistan and rejected the appeal of European Union (EU) by declaring that EU’s countervailing duties (CVDs) on Polyethylene Terephthalate (PET) are not consistent with its Subsidies and Countervailing Measures (SCM) agreement.[1] This has an immense symbolic value and is being termed as a diplomatic success of Pakistan by trade experts which will help in protecting Pakistan’s exports globally.

PET is a bottle grade polyester chip which is used to produce mineral water bottles.

In 2010, the EU imposed a crippling countervailing duty on Pakistan’s PET exports to Europe. Pakistan’s exports of PET were on the rise, but after the levy of duty they started shrinking at an increasing rate. According to the statement provided by the Ministry of Commerce, conservative estimates indicate that Pakistan’s chemical industry has endured a loss of about €300 million due to the unfair trade protection measures imposed by the EU seven years ago.[2]

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