Pakistan has been reportedly not encouraging Indonesia to have a Free Trade Agreement (FTA) with it as long as the existing Non-Tariff Measures (NTMs) on Pakistani products were removed and more market access was granted, the well-informed sources told Business Recorder. This was the crux of the two-day parleys held in Islamabad on deepening of PTA between Pakistan and Indonesia.
The Indonesian team argued that they should be informed about specific NTMs so that Indonesia could address those barriers. The PTA signed by Pakistan in 2013 has now completed three years of its implementation. At the time of signing of the PTA, Indonesia's exports to Pakistan were$936 million tons which increased to $1.9m in 2015-16. On the other hand, Pakistan's exports to Indonesia showed a negative growth after the implementation of the PTA as exports dropped to $173m in 2015 from $273m in 2011.
Indonesian team stated that it has already resolved the issue of Kinnows by granting two months (January -February) permission, indicating that permission could be extended for two more months ie March-April. However, Pakistan urged Indonesia to allow import of Pakistani Kinnows for four-and-a-half months ie from December 15 to April 30, each year as people also buy kinnows in big quantity on the eve of New Year. Indonesian officials have promised that they would come back to Pakistan after discussing the proposal at the highest level. Indonesia's Kinnow market is about $25m.
Pakistani team, the sources said, argued that Indonesia was the major beneficiary of PTA vis-à-vis Pakistan as the latter's exports is not increasing. After hearing the arguments of Pakistani officials, Indonesian team suggested that if Pakistan is not satisfied, then both countries should expand the Preferential Trade Agreement (PTA) into a comprehensive FTA as second phase aimed at addressing Pakistan's issues.
However, Pakistan team argued that it is not the appropriate time to go for FTA, suggesting that PTA should be expanded to accommodate Pakistan's items of interest. Indonesian team agreed to the proposal of deepening of PTA. Referring to Indonesia's concerns on imposition of anti-dumping duty on four items, the sources said, the officials of National Tariff Commission (NTC) informed the visiting team that the anti-dumping duty was imposed after due process of all the cases in line with the WTO rules. "Indonesian team argued that they should be given more market access to deepening PTA, whereas Pakistan suggested that first its previous concerns be addressed," the sources added.
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