Analysis, statistics, publications, downloads, links, etc

MANAGING THE CHALLENGES OF WTO PARTICIPATION: CASE STUDY 34

Victory in Principle: Pakistan’s Dispute Settlement Case on Combed Cotton Yarn Exports to the United States

Turab Hussain*

150pxls.gif (76 bytes)
 Disclaimer:
Opinions expressed in the case studies and any errors or omissions therein are the responsibility of their authors and not of the editors of this volume or of the institutions with which they are affiliated. The authors of the case studies wish to disassociate the institutions with which they are associated from opinions expressed in the case studies and from any errors or omission therein.

Case Studies main page
Introduction

   

ON THIS PAGE: 
I. The problem in context
II. The local and external players and their roles
All Pakistan Textile Mills Association
The Ministry of Commerce
The international lawyers and consultants
> III. Challenges faced and the outcome
The TMB review
The DSB stage
> IV. Lessons learnt
The government
APTMA
The business players


On 24 December 1998 the government of Pakistan received a Call Notice from the US government for consultation regarding the establishment of quantitative restraints on Pakistani exports of combed cotton yarn (Category 301). The basis of this was the allegation on the part of the United States that the exports of Pakistan were causing verifiable harm to the US textile sector. The legal grounds employed by the United States were the transitional safeguard measures sanctioned under Article 6 of the Agreement on Textiles and Clothing (ATC) of the WTO.(1) This was the first time in the trade history of Pakistan that a case went through all the stages of the WTO dispute settlement mechanism.(2) After the failure of bilateral consultations as the first stage of the case, Pakistan had to take the case to the Textile Monitoring Board (TMB) and finally to the Dispute Settlement Board (DSB) of the WTO.

Although the eventual outcome was in Pakistan’s favour, the pursuit of a positive decision was a challenging task manifested by an array of problems relating to co-ordination and co-operation between the public and the private sectors. The objective of this case study therefore is not just to narrate the events which occurred in this case but also to highlight the various obstacles faced by the government and the business players in contesting the case at each stage of the dispute settlement process. This is done so as to underline the lessons that Pakistan learned about both its trade policy administration and the role and value of the WTO in the management of an important dispute.

 
 

I. The problem in context    back to top

Since 1995 there has been a world-wide increase in textile trade, primarily due to the phasing out of the Multi-Fibre Agreement (MFA) and the introduction of the Agreement on Textiles and Clothing (ATC) under the WTO. Under the new regime the previously high quota restraints on the textile and clothing exports of developing countries were to be gradually reduced to bring this sector into compliance with the WTO rules. The textile sector of Pakistan responded positively to the general reduction in quotas by the developed world. The existing manufacturers embarked on an expansion strategy by investing in the enhancement of their production capacity. At the same time new manufacturers entered the industry increasing total production and the volume of exports.(3) Consequently in that period Pakistan became the second-largest exporter of combed cotton yarn to the United States, inadvertently giving cause to the United States to employ the transitional safeguard measures sanctioned by the ATC.

The importance of the textile sector, often referred to as the backbone of the Pakistan economy, cannot be overstated. It is the country’s largest manufacturing sector with an 8.5% share in the nation’s GDP. The sector’s contribution to employment is 38% and it generates a phenomenal 60% of the total export earnings of Pakistan.(4)

Within the textile sector those directly affected by the quota restrictions were the exporters and manufacturers of combed cotton yarn. These restrictions not only threatened their and the country’s economic well-being but also significantly increased the scepticism of local business and government towards the West’s commitment to free trade. As this was the second time the United States had employed transitional safeguard measures, the general feeling among the business players in the post-MFA era was that the US government was using this as an alternative policy instrument for protecting its textile manufacturers, putting at stake the viability of the Pakistan textile industry. The prevailing views of the business players about the quota restraints can be summed up by the following comment by an exporter: ‘On one hand the West has been strongly advocating free global market, but on the other they are imposing such restrictions which themselves negate their actions and deeds.’(5)

Moreover, the type of role played by the dispute settlement mechanism of the WTO was of paramount importance. Notwithstanding the fact that in 1996 Pakistan was able to deter the United States from employing the safeguard measures at the bilateral negotiations stage, there was still scepticism amongst local business players about the WTO. The primary reason for this was the paucity of information within the private sector about the workings and the objectives of the WTO and a generally held notion of it being more representative of Western trade interests. Thus this was an occasion which could instil the credibility of the organization locally by removing the prevalent doubts about its effectiveness in maintaining the principles of free and fair trade between unequal partners.

Beside the direct economic benefits of lifting the quota restraints, the importance of this case also hinged on the legal precedent which it could potentially establish. In the words of Akbar Sheikh, the local consultant representing the government of Pakistan at the various stages of the case,

The legal grounds on which the quota restrictions were imposed by the United States had to be challenged as these could have led to the establishment of a precedent causing long term problems not only for Pakistan but for the rest of the developing world in future dispute settlement cases within this sector.(6)

Thus the role of the local players involved in effectively managing the case at the various stages of the dispute settlement mechanism of the WTO was crucial. The significance of a positive outcome stemmed from both the restoration of confidence of the local business in the new global trading environment and in affecting the future trade policies of larger countries such as the United States.

 
 

II. The local and external players and their roles    back to top

All Pakistan Textile Mills Association

The business/industry players, both exporters and manufacturers, were represented by the All Pakistan Textile Mills Association (APTMA). This is a broadly based body whose members come from all categories and types of textile and clothing manufacturers and traders. In 1998, when the quota restraints were imposed by the United States, the association had a standing committee on anti-dumping and WTO affairs.

The objective of this committee was initially to co-ordinate with the Ministry of Commerce in the identification and hiring of appropriate consultants and lawyers to represent Pakistan in the bilateral negotiations with the United States and then in the dispute settlement stages of the WTO.

Second, in order to facilitate the preparation and proceedings of the case, the committee and hence APTMA had to act as a liaison between the government and the business players. This was done by providing trade and industry information to the local and international consultants representing the government. Also, the committee had to keep the members of APTMA abreast of the developments in the case.

Finally, APTMA, in consultation with its members and the Commerce Ministry of Pakistan, had to formulate an acceptable mechanism for the payment of the high legal fees involved in the case.

 

The Ministry of Commerce    back to top

The Ministry of Commerce, as the relevant ministerial arm of the Pakistan government, was directly involved in all the stages of the case — the bilateral negotiations with the United States, the TMB review and finally at the DSB. The ministry’s Export Promotion Bureau (EPB) had to co-ordinate with APTMA in the payment of the legal costs incurred during the case.

At that time there was no effective institutional framework within the Ministry of Commerce which could deal with WTO-related dispute settlement cases. Due to the lack of internal expertise, the ministry had to engage the services of a local consultant, Akbar Sheikh. He acted as a representative of the government at the WTO along with Nasim Qureshi, Joint Secretary at the Ministry of Commerce.

The basis for Akbar Sheikh’s selection was his past experience at the level of bilateral negotiations and an in-depth knowledge of the textile sector of Pakistan. His role was to build the defence case for Pakistan along with the international consultants and lawyers and to present it effectively at both the TMB review and the DSB stage. For this purpose he had to work closely with both the Commerce Ministry (Nasim Qureshi) and APTMA.

 

The international lawyers and consultants    back to top

The lack of local expertise in international trade law and WTO-related issues had led Pakistan to hire the services of international consultants and lawyers in previous dispute settlement cases. In the 1996 combed cotton yarn case APTMA and the Pakistan government had hired the services of International Development Systems (IDS), a Washington-based consultancy firm. IDS had successfully defended Pakistan’s case during the negotiations with the United States. Hence in 1998, when the United States issued the call notice for a second time, APTMA, in consultation with the government, again engaged IDS. The consultant from IDS was Brenda Jacobs, both at the bilateral negotiations with the United States and at the TMB review. Along with IDS another Washington based law firm, Travis, Sandler and Rosenberg, was engaged for the TMB review.

However, once the case went to the final DSB stage the Ministry of Commerce decided to engage the services of lawyers based in Geneva, where the dispute settlement proceedings of the WTO are held.

 
 

III. Challenges faced and the outcome    back to top

The TMB review

At the proceedings

After the failure of the bilateral negotiations between Pakistan and the United States, on 5 March 1999 the United States notified the Textile Monitoring Body (TMB) pursuant to Article 6 of the ATC that it had decided to impose the quota restraints for three years. This measure came into effect from 17 March 1999. The matter was taken up at the 54th meeting of the TMB held in April 1999. The Pakistan side was represented by Akbar Sheikh, Brenda Jacobs of IDS, and Travis, Sandler and Rosenberg.

This was apparently one of the longest cases at the TMB, lasting for around six days. As mentioned earlier, this was the first time Pakistan had gone to the TMB review, hence there was a certain degree of anxiety about the nature and result of the proceedings to follow. According to Akbar Sheikh the US team, owing to their numbers, initially looked quite formidable. There were US government functionaries, textile experts and trade lawyers and consultants present during the review. Moreover, the importance the United States was giving to this case was evident from the fact that the US chief textile negotiator, ambassador Don Johnson, who is normally not required to attend such meetings, was present even during the extended time of the sessions. The case was strongly contested by both sides, as it was clearly regarded as establishing a precedent.(7)

The questions and discussions were found to be fairly challenging by Pakistan, but according to Akbar Sheikh they were able to rebut most of the arguments put forward by the US side. Pakistan’s case focused on the ‘spurious’ definition of domestic industry employed by the United States and therefore on the viability of the data used to draw an alleged causality between the imports from Pakistan and the decrease in US textile production. The legal precedent aspect of the case was the definition of domestic industry employed by the United States. The United States had defined its domestic industry as the producers of yarn for sale in the merchant market, excluding from the data vertically integrated producers that were producing yarn as an intermediate good. Pakistan claimed that this definition violated Article 6.2 of the ATC, as it resulted in the failure of the United States to consider its entire domestic industry.(8)

After six long days of deliberations, arguments and counter-arguments the efforts of the Pakistan team bore fruit and the TMB, accepting Pakistan’s central arguments, gave a ruling in favour of Pakistan and recommending an immediate lifting of the quota restrictions.(9)

The positive decision at the first ever TMB review was a major achievement by Pakistan. The co-ordinated efforts of the government, APTMA and the business players had been successful, although as the TMB recommendations are non-binding on the countries, the United States did not rescind the quota restraints and appealed against the decision. The appeal was rejected, however, and the recommendation to lift the quota restraints was reiterated by the TMB panel.

Behind the scenes

The failure of the bilateral negotiations had made it evident to the Pakistan government and APTMA that for the US government this was a critical case, since it could lead to the establishing of a legal precedent which could be utilized against Pakistan at least for the duration of the ATC.(10) Moreover, Pakistan’s response to the US action had to be determined and strong so as to give a signal that in the post-ATC era (after 2005) employing contingent measures such as anti-dumping duties would not go unchallenged. These important aspects, to an extent, were conveyed successfully by APTMA to the local business players involved, exporters and manufacturers, which was reflected by their willingness to play a pro-active role during the TMB review stage.

The first example of co-operation of the business players with APTMA and the government was the provision of relevant export and production data by the combed cotton yarn manufacturers and exporters. This helped in the formulation of Pakistan’s defence case at the TMB review and later at the DSB stage.

However, the lack of relevant experience on the part of APTMA and the absence of an effective institutional structure in the Commerce Ministry in terms of handling dispute settlement cases meant that there was no set rule when it came to the payment of the high legal fees charged by the international lawyers and consultants. Hence APTMA had the onerous task of coming up with an acceptable formula for sharing the costs. After some discussion and bargaining with the Commerce Ministry, it was decided in a meeting held with the Export Promotion Bureau (EPB) that 50% of the costs were to be paid by APTMA and the other 50% by the EPB. APTMA’s 50% share was to be divided equally between the affected members (the exporters of combed cotton yarn) and the non-affected members of APTMA.

The willingness to share the financial burden at this stage to some extent reflected the realization amongst members of APTMA of the significance of the case and its long-term benefits. The following excerpt from a letter written by one of the large manufacturers and exporters of combed cotton yarn is indicative of the willingness to co-operate with APTMA:

The Textile Industry is deeply indebted to your good selves, and your TEAM on the strong stand that you have taken to resist the imposition of QUOTA and the steps taken by APTMA, are highly appreciable…. We wholeheartedly support your actions, and steps taken for the waiver of quotas, and further extend our availability for any kind of help and assistance which is required by APTMA to take up this issue with the TMB.

While most of the affected exporters or manufacturers of combed cotton yarn finally did contribute their respective share, the EPB paid only 31% of their share of the costs, thus reneging from their initial commitment to paying 50%. The shortfall resulted in a five-month delay in the payment to Travis, Sandler and Rosenberg, which charged a premium of 1.5% per month for the delay.(11)

Finally, the collaboration between APTMA and the Ministry of Commerce was to a large extent facilitated by Akbar Sheikh’s good personal links with both Nasim Qureshi and the Pakistan ambassador to Switzerland, Munir Akram. The co-operative role played by these two government representatives was a key reason for the success at the TMB review. Thus in the absence of any institutionalized co-ordination and collaboration between the public and the private sectors, it was individual links which mattered in achieving a positive outcome.(12)

 

The DSB stage    back to top

Delay in taking the case up to the DSB

As the United States refused to comply with the recommendation of the TMB review, failing to do so even after their appeal was rejected in June 1999, the only course of action left for Pakistan was to take the case to the WTO’s Dispute Settlement Board (DSB). This was the final and hence most important stage of the case, as unlike the TMB review the decision by the panel at DSB is binding on the countries involved. However, it took the government almost an entire year to request the establishment of a panel at the DSB. After the success at the TMB review such a delay at this critical stage came at a large cost to the exporters and manufacturers of combed cotton yarn. In the international market the demand for combed cotton yarn was picking up, so that the quota restraints were inhibiting Pakistan’s potential exports and foreign exchange earnings even more.(13)

Immediately after the TMB review there was a meeting of the APTMA standing committee on anti-dumping and WTO affairs to give a briefing on the proceeding at the TMB. The convenor was of the view that ‘in the case that the US action is not rescinded within fifteen days, the Pakistan government must apply to the Dispute Settlement Body of the WTO’. In August 1999 the United States in a letter to TMB renewed its determination to retain the quota restrictions, thus rendering the TMB review unresolved.

Following the failure of the TMB review, in a letter in September to the APTMA chairman, Nasim Qureshi reiterated that both APTMA and Pakistan government ‘may start preparations immediately for initiating the dispute settlement process’. In the letter it was also stated that after consultation with the Pakistan mission in Geneva, the ministry had decided to hire the services of a Geneva-based firm. The expected total cost of preparing, filing and contesting the case was quoted as $125,000, which according to the ministry thus was far less than the $200,000 quoted by the US-based law firm. According to Akbar Sheikh the reasons for hiring Geneva-based lawyers was to avoid the large miscellaneous costs (travel, board, etc.) of hiring consultants based in Washington.(14) Thus the reason for switching lawyers at the last stage of the case seemed purely financial. Though hiring the lawyers was to take place immediately, it was not until 1 March 2000 that APTMA and the Pakistan government signed a contract with the Geneva-based legal adviser, Frieder Roessler.

Another likely reason contributing to the delay could have been the bilateral consultations between the United States and Pakistan held in November 1999 and then in January 2000. The hope of getting the quota restraints lifted after bilateral negotiations might have caused the Pakistan government to wait till the outcome of these talks. According to Akbar Sheikh there were some indications from the US side of the possibility that the quota restraints would be lifted, hence it was thought inappropriate to file a case with the DSB close to the scheduled talks.

As the bilateral consultation failed, in hindsight Akbar Sheikh felt that it could have been a delaying tactic employed by the United States. The quota restraints had been imposed for three years, and the United States was strategizing to buy time to cover as much of this period as possible.(15) Finally, in April 2000, the Pakistan government took the case to the DSB, which established a Panel at its request.

The raising of funds to contest the case at the DSB

As this was the first time Pakistan was contesting a case at the DSB level there was no institutional set-up or guidelines for the payment of the expenses involved. As with the TMB stage, APTMA and the Commerce Ministry had to come up with an agreement. APTMA’s proposal of a cost-sharing formula was finally accepted in February 2000 by the Commerce Ministry. It was decided that out of the estimated total cost of $125,000 APTMA was to contribute the first $50,000, the balance to be given by the EPB using the revenue generated from the Export Development Fund (EDF).(16)

The next stage for APTMA was to get the concerned exporters/ manufacturers to contribute their share so as to raise the agreed initial amount of $50,000. Unlike at the TMB stage, there was a problem within APTMA in getting the concerned business players to contribute a second time for the legal expenses at the DSB stage.

Some large manufacturers/exporters of combed cotton yarn saw beyond their immediate economic interest and understood the value of persisting with the case at this last and most important stage. These players were willing to contribute whatever was required of them. At the same time there were others who had contributed at the TMB stage but because of a lack of understanding of the mechanism of dispute settlement at the WTO and frustration owing to US non-compliance saw no reason to contribute in order to pursue the case further. It is safe to say that these players did not quite appreciate the significance of the case in terms of the long-term benefits of pursuing to the end a positive decision. The following excerpts are an example of the degree of divergence of views within the members of APTMA:(17)

Pakistan must move its case to the Dispute Settlement Board. In my opinion, however expensive and cumbersome these processes may be, we must do our utmost to fight these cases to protect our existing and potential markets. In this connection I would request you to call a meeting of the concerned members to develop a strategy to contest the above case. (From a letter written to APTMA by a co-operating large manufacturer/exporter)
 

Please note that we already are the largest quota holders in this category from Pakistan. It is not in our interest to have this quota removed as its imposition creates a barrier to entry for others. It does not make any economic sense for us to ‘pay to cut our own feet’. We therefore feel that it is unjust for APTMA to ask us to pay for this contribution. (From a letter written to APTMA by a non-co-operating large exporter/manufacturer)

These financing problems were eventually resolved and APTMA was able to meet its commitment of paying the initial $50,000 of the cost incurred at the DSB. In the words of Akbar Sheikh on the issue of financing at the DSB, ‘Such disagreements within the association are quite common and thus were anticipated. The important thing was that in the end the business players, APTMA and the government got together to contest the case successfully at the DSB.’

The proceedings

The first hearing of the case was held in Geneva on 16 and 17 November and the second hearing on 13 and 14 December 2000. The hearings were before the three-member panel established by the Dispute Settlement Body of WTO.(18) A three-member team consisting of Akbar Sheikh, S. I. M. Nayyar (counsellor, Pakistan permanent mission in Geneva) and Frieder Roessler represented Pakistan. A ten-member team represented the US government. According to Akbar Sheikh the proceedings of the DSB were quite different from those at the TMB review. While at the TMB there was a lot of discussion and argument, at the DSB there was more paper work, that is questions during the hearings were focused on the written submissions by the United States and Pakistan.

Pakistan contested the case successfully, and on 31 May 2001 the Panel in its report recommended an immediate lifting of the quota restrictions by the United States.(19) The United States appealed against the decision on 9 July and the appeal hearing was held on 16 August, when the Panel upheld its earlier decision and recommended an immediate lifting of the quota restraints.

Finally, complying with the recommendations of the DSB and the Appellate Body of the WTO, the US government in November 2001 lifted the quota restriction on Pakistani imports, much to the relief of the Pakistani manufacturers and exporters. The whole process, from the day the quota restraints were imposed to the day they were lifted, lasted for almost two years and nine months, covering almost the entire period of the three-year transitional safeguard measure-quota restraint employed by the United States. The following comment by Akbar Sheikh after being congratulated by Ambassador Don Johnson for winning the case aptly summarizes the feeling at that time.

At the end of the day both parties won, Pakistan because it got a decision in its favour and the United States because it was able to keep the quota restraints for almost the entire three-year period, thanks to the duration of the case.

 
 

IV. Lessons learnt    back to top

The government

The first major lesson which came out of the case was that the government should in future play a much more proactive role in traderelated disputes than it has done in the past. In this particular case the primary factor behind the relatively high degree of co-ordination and co-operation between the Ministry of Commerce and APTMA (business players) had been the good personal relationship which Akbar Sheikh enjoyed with the two important functionaries in the government — the Joint Secretary, Ministry of Commerce, and the Pakistan ambassador to Switzerland. There was an absence of any institutionalized co-ordination between the government and APTMA specifically relating to such trade disputes and WTO affairs.

Akbar Sheikh was of the view that in order to facilitate institutional-level co-ordination in WTO-related dispute settlement cases the government should have a properly functioning and effective cell within the Ministry of Commerce. The government seemed to have learnt that lesson right at the start of the DSB proceedings in Geneva, when in October 2000, just before the hearings, a WTO cell was established at the permanent mission office in Geneva.(20) The cell was created to ‘safeguard Pakistan’s export and other interest in international trade by communicating the changes in the system and rules to the relevant authorities in Pakistan’.(21) The Ministry of Commerce almost simultaneously opened a WTO wing which now has a functioning cell. This cell has six working groups on different WTO agreements.(22)

Although these steps by the Pakistan government are in the right direction, Akbar Sheikh was of the view that there is still room for improvement in developing an effective institutional framework to contest future dispute settlement cases. He pointed out that the WTO cell should provide appropriate guidelines on both trade-related and dispute settlement issues to the players involved. Research should be conducted within the cell to keep it up to date with the current dispute settlement cases around the world. At the same time the cell should maintain an archive of past cases and rulings. According to Akbar Sheikh this would be immensely helpful to the private and the public sector in developing the right strategy for contesting future cases.

One of the central problems in this cotton yarn dispute case was the hiring of expensive foreign consultants and lawyers. According to Akbar Sheikh, the type of findings which some of these firms produced could very easily have resulted from research undertaken locally, had there been some basic level of legal expertise relating to international trade and the WTO. Hence he suggested that the government should invest in the training of lawyers and consultants who in future could handle dispute cases without the government resorting to hiring expensive foreign firms.

 

APTMA    back to top

During the course of this case APTMA already had a committee on anti-dumping and WTO issues which was supposed to act as a liaison between the business players and the government. However, as mentioned before, it had been the personal links which Akbar Sheikh had with both the government and APTMA which largely facilitated the co-ordination and co-operation between the two. In order to rectify the lack of an effective institutional structure APTMA has recently opened a WTO cell, which according to the APTMA secretary, Anis-ul-Haq, is still in its formative stage. The cell has currently hired a law firm which advises the APTMA members regarding WTO issues. Anis-ul-Haq considers that the primary objective of the cell should be to co-ordinate with the parallel WTO cell at the Ministry of Commerce, so that future dispute cases are handled smoothly. Also, this cell should advise the concerned members of APTMA on the prevailing trade environment and international trade law so as to pre-empt any action taken internationally against the local business players.

A major problem in the cotton dispute case was the collection of funds to meet the expenses involved. Both Anis-ul-Haq and Akbar Sheikh were of the opinion that rather than the existing ad hoc case-by-case approach there should be some set criteria established by the government and APTMA. This would significantly reduce the costs in terms of saving time currently wasted in coming up with an acceptable distribution of the financial burden. Along with this, APTMA as an organization should have a pool of resources allocated specifically to meeting the expenses of future dispute settlement cases. This common resource pool could be generated if APTMA helps to develop and foster the concept of mutual insurance amongst its members, who, often because of conflicting interests, are not willing to contribute.

 

The business players    back to top

The positive and effective role played by the dispute settlement mechanism of the WTO in resolving this trade dispute between two unequal partners helped reinvigorate the confidence of the local business players in the global trading environment. According to Akbar Sheikh it also helped in improving the image of the WTO at the level of both the government and business and enhanced its credibility as an institution aimed at fostering free and fair trade.

However, the fact remains that the quota was rescinded just three months before the expiry of the three-year period of the safeguard measures. Thus the cost to the local business players was not just in terms of contesting the case but also in the form of the lost revenue/earnings due to the length of time the restraints were in place. The fact that at the DSB stage quite a few business players initially refused to participate in financing the case indicates a prevalent frustration with the duration of the dispute settlement process. There was also a certain amount of scepticism about the ability of the WTO to make countries like the United States comply with its recommendations and decisions. Finally, there was still a general feeling that even after the DSB decision there was no guarantee that the United States would comply, since it could not be credibly threatened into compliance by a small economy like Pakistan even if retaliatory measures were sanctioned by the WTO.

 
 

NOTES:
1.- These safeguard measures allow the establishment of quota restraints by a member country if it is ‘able to demonstrate that a particular product is being imported into its territory in such increased quantities as to cause serious damage or actual threat to its domestic industry producing like and/or directly competitive products.  back to text
2.- The first time the United States tried to impose transitional safeguard measures on Pakistani exports was in 1996, on the same variety of combed cotton yarn. However, Pakistan was able to defend its case at the bilateral negotiation stage and the United States chose not to impose the quota restraints.  back to text
3.- Information provided by Anis-ul-Haq, secretary, All Pakistan Textile Mills Association (APTMA).  back to text
4.- Government of Pakistan, Economic Survey 1998-99 (dates relevant to the period of the case).  back to text
5.- Pakistan Economist, 15 Aug. 1999.  back to text
6.- The definition of domestic industry employed by the United States in the case was challenged by Pakistan. This according to Akbar Sheikh was the crucial legal definitional issue on which the entire case of the United States rested. For details see Report of the Appellate Body, WTO, WT/DS192/AB/R, 8 Oct. 2001.  back to text
7.- Correspondence between Akbar Sheikh and APTMA, 16 April 1999 (2nd Call Notice CAT-301 Combed Cotton Yarn, APTMA Files).  back to text
8.- For details of the case see the TMB report of the WTO.  back to text
9.- The TMB concluded that ‘the United States had not demonstrated successfully that combed cotton yarn was being imported into its territory in such increased quantities as to cause serious damage, or actual threat thereof, to its domestic industry producing like and/or directly competitive products’. WT/DS192/1, 3 April 2000.  back to text
10.- At the end of 2005 the ATC expires, bringing to an end all quota restraints sanctioned under different measures such as transitional safeguards.  back to text
11.- After the payment of US$32, 175 to IDS, Washington, there were not sufficient funds left to settle the invoice of US$28, 125.16 of Travis, Sandler and Rosenberg (APTMA paper on USG call notice on combed cotton yarn (CAT 301)).  back to text
12.- Information provided by Akbar Sheikh.  back to text
13.- The export of cotton yarn to the United States had increased from 599, 926 kg in April 1999 to 2, 380, 545 kg in December 1999 (2nd Call Notice CAT-301 Combed Cotton Yarn, APTMA Files).  back to text
14.- The actual charges of the Geneva-based legal adviser, Frieder Roessler, were approximately US$60,000. The expected amount quoted by the government must have included miscellaneous expenditure, i.e. travel, board, etc. of the government consultants and representatives (2nd Call Notice CAT-301 Combed Cotton Yarn, APTMA Files).  back to text
15.- Information provided by Akbar Sheikh.  back to text
16.- The Export Development Fund (EDF) is collected by the government (by the EPB) by charging the exporters a certain proportion of their export earnings.  back to text
17.- 2nd Call Notice CAT-301 Combed Cotton Yarn, APTMA Files.  back to text
18.- The panel consisted of the chairman and two members, one from the EU and the other from India.  back to text
19.- For details of the panel’s decision see the WTO, Panel Report, 31 May 2001.  back to text
20.- Nasim Qureshi, who was the Joint Secretary, Ministry of Commerce, during most of the duration of case, was appointed as the deputy chief of the Pakistan mission in Geneva and head of this new WTO cell. Since the cell was created right at the end of this particular case, it could not contribute substantively to the proceedings of the case.  back to text
21.- http://dawn.com/2000/10/08/ebr9.htm.  back to text
22.- According to the 2002 Trade Policy Review of Pakistan by the WTO, these steps by the government to change and modify the existing institutional framework have strengthened the Ministry of Commerce in dealing with future trade-related issues.  back to text
 

150pxls.gif (76 bytes)
* Lecturer, Department of Economics, Lahore University of Management Sciences.