European Union – Countervailing Measures on Certain Polyethylene Terephthalate from Pakistan (EU–PET (Pakistan)), DS486
This dispute concerns countervailing measures imposed by the European Union (EU) on imports of Polyethylene Terephthalate (PET) from Pakistan. Pakistan has a ‘duty drawback scheme’ by which it remits import duties on input materials consumed in the production of a product that is subsequently exported. The European Commission considered that all duties remitted to a Pakistani PET producer and exporter named Novatex constituted a countervailable subsidy contingent upon export performance. Also, Pakistan has a programme through which it provides government-financed loans to certain qualifying companies. Pre-approved banks are prohibited from charging interest rates above a specified level. The European Commission considered that the loan conferred to Novatex under this programme constituted a countervailable subsidy.