- Indonesia agrees to tilt balance of trade in favour of Pakistan
ISLAMABAD: Though Pakistan was almost in favour of shelving the Preferential Trade Agreement (PTA) with Indonesia for the agreement being entirely in favour of the foreign country, Jakarta has agreed to tilt the balance of trade in favour of Pakistan.
According to sources during the negotiation and review meeting completed on Friday in Jakarta, the foreign country has accepted some conditions of Pakistan in order to continue the PTA signed by the two Islamic countries during government of Pakistan People’s Party (PPP) in Pakistan. Under the agreed terms, the Indonesian government has agreed to allow a wider window for import of Pakistani kinnow from December to April and that simply means enhancement in export volume of kinnow to Indonesia. In a move to enhance import of agricultural products from Pakistan, Indonesia will also open its border for Pakistani mango with relaxed terms.
According to Waheed Ahmed of Pakistan Fruit and Vegetable Exporters, Importers and Merchant Association, the association, after knowing the mode of Islamabad to discontinue to PTA, had suggested to relax terms for imports from Pakistan instead of shelving the entire agreement. According to him, the PTA between Indonesia and Pakistan was recently reviewed which revealed that it was is in favour of Indonesia and therefore feedback from PFVA was also sought as Islamabad wanted to cancel the agreement due to financial losses by Pakistan.
As a result of feedback from the association and horticultural exporters, Indonesia has now agreed to import Pakistani mangoes from next year. Besides, suggestions by the PFVA to export onion and potato to Indonesia are also under serious consideration by Indonesia and are anticipated to get materialised in the near future.
The cumulative effects of these recommendations would lead to minimise trade imbalance between the two countries.
The commercial attaché of Pakistani Embassy in Jakarta, while talking to Waheed, has also confirmed these developments as well. Moreover, the Indonesian ambassador to Pakistan also confirmed this news and expressed confidence that the trade between the two brother Islamic countries would enhance in future with these steps taken by the Indonesian government.
According to sources, the Commerce Ministry had poorly negotiated PTA with Indonesia during the PPP government and there were visible indications that some prominent importers of edible oil struck a “lucrative” deal with officials in the Ministry and Trade Development Authority of Pakistan (TDAP).
Pakistan’s main focus in PTA was to export kinnows against import of palm oil, which was highly in favour of Indonesia. Pakistan has extended financial benefit of $800 million per annum to Indonesia against $40-50 million. Pakistan has also given five tariff lines for reduction in duty; i.e. bed linen, two garments and two fabrics, the sources added.
Commerce Ministry was also not satisfied with FTAs and PTAs signed with other countries and directed the bureaucracy to review all the pacts.
Earlier, Jakarta was also urged to reconsider the import quota policy for Pakistan for items included in PTA and emphasised that a quota-free market access would help Pakistani exports to Indonesia to also grow.
Indonesia had given less market access to Pakistan on garments and bed-sheets compared to India, China and some ASEAN countries. “Pakistan has now sought more market access in garments and bed-sheets as compared to India, China and ASEAN countries,” the sources further added.
Islamabad had raised the issue of kinnow, rice, potato and meat exports. Indonesia has given permission for one specific variety of potato used in chips but Pakistan has urged Indonesia to include all varieties of potato in the PTA as well.
