ISLAMABAD: With an objective to make Preferential Trade Agreement (PTA) mutually beneficial and head towards the conclusion of Free Trade Agreement (FTA), Pakistan and Indonesia are going to hold bilateral talks here at Pakistan-Indonesia Business Forum today (Friday). Minister for Commerce Pervaiz Malik and Indonesian trade minister will lead their respective sides in the forum.
Bilateral trade between Pakistan and Indonesia is worth around $1 billion. Pakistani exports to Indonesia, include citrus fruit, seafood, textiles, cotton yarn, medical equipment, rice, wheat and carpets while Indonesia exports palm oil to Pakistan. In 2017, the trade volume between Pakistan and Indonesia reached $2.5 billion.
Sources at Commerce Ministry told Customs Today that Pakistan considered Indonesia as an important bilateral trade partner and was keen in improving economic relations with that country. The trade volume was in Indonesia’s favour. However, Pakistan appreciated Indonesian unilateral act of including 20 items of Pakistan’s prime interest for duty free access in the PTA to make it mutually beneficial. Therefore, Pakistan is committed to further expand and deepen the bilateral trade and economic cooperation with Indonesia.
“The first meeting of the trade negotiations committees in this regard is being coordinated mutually convenient dates in March 2018” the sources added, saying that Pakistan would urge Indonesian side to extend the date of delivery for 6500 MT rice.
In September 2013, the sources said that the Preferential Trade Agreement (PTA) between Indonesia and Pakistan, which was signed in February 2012, came into effect from September 1 following the signing of an additional Mutual Recognition Agreement (MRA) in which Indonesia recognized Pakistan as a pest-free area for kinnow.
Similarly, the sources said that in November 2005, Pakistan and Indonesia completed a comprehensive economic partnership agreement, one of the provisions of which was that the countries, in 2006, commenced negotiations to conclude a PTA. The latter agreement was after the two countries had successfully concluded the final eighth round of negotiations held 1n September 2011.
“Pakistan’s PTA offer list to Indonesia includes a total of 287 tariff lines at preferential tariffs, and it also agreed to give the same treatment to Indonesian palm oil products as provided to Malaysia under the Pakistan-Malaysia free trade agreement (FTA)” the sources maintained.
While Indonesia cancelled tariffs on imports from Pakistan of the regionally-important citrus fruit, kinnow (a type of mandarin), creating a level-playing field in the Indonesian market for this product, which is produced in Pakistan.
However, the sources said that in August 2016, Pakistan refused to start negotiations on Free Trade Agreement (FTA) with Indonesia until Pakistan’s concerns on existing Preferential Trade Agreement (PTA) were addressed within six months.
Even then, the sources said that in August last year, Indonesian Consul General Dempo Awang Yuddie hinted that bilateral trade between Indonesia and Pakistan was expected to reach $2.5 billion this year. The two countries had tried to improve both political and economic ties since 2015. Resultantly, a number of Pakistan’s parliamentarians, trade delegations and military personnel visited Indonesia recently to further enhance the bilateral relationship.
