At a time the Pakistani cement industry is facing a declining trend and is losing its competitiveness in the world market, the smuggling of Iranian cement has increased in the country while South Africa has slapped anti-dumping duty — ranging from 15 percent to 68 percent — on the Pakistani cement import. On the home front, the All Pakistan Cement Manufacturers Association has appealed to the government to give incentives to the sector to increase exports and to compete with Iran and India in the international market. The Ministry of Commerce has also decided to challenge South Africa’s decision to impose preliminary anti-dumping duty on the import of Pakistani cement in the World Trade Organization. Earlier in May this year, South Africa had imposed the anti-dumping duty on the import of Pakistani cement apparently to save the indigenous industry. The decision of the South African government seems to be inconsistent with several provisions of the WTO agreement.
The production capacity of cement in the country has touched 45.620 million tons per annum, but domestic demand is confined to 28.206 million tons or total utilization of capacity by 61.82 percent only, leaving a surplus of 17.414 million tons unutilized, which is available for exports. During 2011-2012, Pakistan exported 4.727 million tons cement to Afghanistan, but the volume has decreased to 2.873 million tons in 2014-15. Now the Commerce Ministry has decided to persuade the WTO for the settlement of the dispute as according to it, the mechanism followed by South African authorities does not reflect the true analysis of the situation. Earlier, the South African authorities spent four years to investigate the matter, but failed to properly examine the evidence and factors which are hurting its local industry. Pakistan is facing the same situation with regard to Iran as dumping of Iranian cement continues in Balochistan, but the government has failed to find real causes of this trend.
If Pakistan wants fair opportunity for Pakistani cement exporters to defend their case, the government should also look into the smuggling of the Iranian cement and rationalize the imposition of taxes and duties on the local industry. The Pakistani representative to the WTO has written to his South African counterpart in Geneva to discuss the issue. As a matter of fact, every country has the right to protect local industry. The smuggling and export of commodities save the manufacturers from the pressure of undue duties and taxes which shows that if problem starts at home, a solution also lies at home. The government will have to rationalize taxes and duties and give export incentives to the cement manufacturers.
