Trade Development Authority of Pakistan (TDAP) Secretary Inam Ullah Khan Dharejo Friday said Pakistan and Indonesia have decided to enter into Free Trade Agreement (FTA) with focus on goods, services and investment, which can mark a radical shift in trade and investment ties between the two countries.
Dharejo stated this while addressing the B2B interactive session under the umbrella of Indonesia-Pakistan Business Forum, organized by the Indonesia Embassy in Pakistan and TDAP, Ministry of Commerce and Textile, here on Friday. Business delegations also held the one on one business matching between Indonesia and Pakistan.
The secretary TDAP said the government of Pakistan is committed to unlocking the immense trade potential with Indonesia by proactively engaging in deeper economic cooperation - a part of the government's strategic trade policy. Indonesia has been an important trading partner of Pakistan in the Asia Pacific region.
He said bilateral trade with Indonesia has increased from $1.231 billion in 2011-12 to $2.375 billion in 2016-17. Pakistan's major export products to Indonesia include cotton fabrics, cotton yarn, raw cotton, rice, mandarin, fish and fish preparations, cereals and cereal preparation and knitted fabric, etc. While Indonesia's major export products to Pakistan include vegetable fats and oil, coal, briquettes, coke, vegetable and synthetic textile fiber, chemical elements, paper and paper board, fruit and fruit preparation including fruit, yarn and thread of synthetic fibers and machinery.
Keeping in view the huge potential of Indonesian market and importance of achieving the status of Full Dialogue Partner in ASEAN, Pakistan is pursuing vigorously for the strengthening of commercial relations with Indonesia, the secretary added.
Dharejo further said that Comprehensive Economic Partnership Agreement (CEPA) signed during the visit of the President of Indonesia in November 2005, was an endeavor in this direction. Under the umbrella of CEPA, both sides agreed to sign a Preferential Trade Agreement (PTA).
The PTA was perceived to be a primer for the Free Trade Agreement to be negotiated subsequently. Under the agreement, Indonesia has provided market access on fresh fruits including grapefruit, citrus, lemons, apples, pears, apricots and dates. Both countries have decided to enter into FTA as per the commitments already agreed between the two sides under the Comprehensive Economic Partnership Agreement (CEPA).
"The FTA would focus on goods, services and investment and I believe this FTA with Indonesia can mark a radical shift in our trade and investment ties. This shift will result from realization of the opportunities Indonesia represents for Pakistani business," he added.
The TDAP, being the premier trade promotion organization of the government of Pakistan, commits in playing a proactive role for the successful implementation of all the bilateral trade agreements between Pakistan and Indonesia with concerted efforts. Under the PTA, there is a huge opportunity for Pakistani niche product line to enter the vast Indonesian market and also for the Indonesian investors to invest in this sector, inject their expertise in the supply chain and in the value addition processes.
He further said that they are going to sign an MOU with National Export Development of Indonesia. This trade agreement is an opportunity for both countries to drive jobs and economic growth. There are many avenues to expand economic relationship with Indonesia. Indonesian consumers are looking for the remarkable fruits produce that Pakistani farmers are renowned for.
The secretary TDAP said that there is a real opportunity to reach a broad-based understanding that meaningfully strengthens and deepens the economic relationship that Pakistan has with Indonesia.
Director General of National Export Development of Indonesia Arlinda said that since 2013 Indonesia and Pakistan have a Preferential Trade Agreement (PTA), which is currently under review by both parties. This agreement aims to bring two nations closer in terms of economic relations and people-to-people contacts.
"In term of trade, I could deduce that IP-PTA brings positive movement in improving the economic relations between two countries," she said, adding that based of those spirits, the Ministry of Trade of Indonesia actively encourages the Indonesian businesses to interact with Pakistan businesses and one of the ways is participating in the Trade Mission.
Arlinda said this Trade Mission is part of their commitment to increase trade and create a mutual beneficial business climate for both countries. "Today, we bring 17 CEOs and representatives of associations representing a wide range of business in Indonesia, from palm oil and bio-fuel to processed food, electronic, textile, agricultural products, real estate, machinery, spinning mills and information technology," she added. Arlinda said that this event could facilitate business of the two countries in establishing relationships and discussing more details about the products of interest.
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