Pakistan and Indonesia are holding another round of talks on Preferential Trade Agreement (PTA) on February 16-17 in Islamabad aimed at deepening concessions bilaterally, well informed sources told Business Recorder. Indonesia recently lifted seasonal ban on import of Pakistani Kinnow in January and February which enabled exports of Kinnow to the country.
Previously, Indonesia had imposed a ban on Pakistani Kinnow for four months, ie November, December, January and February. Indonesia's Kinnow market is about $25 million. Both sides are urging each other to remove Non-Tariff Measures (NTMs) which are hurting their exports but progress on this aspect is negligible. The two countries exchanged their concerns with respect to trade with each other during the last joint committee meeting which met to review IP-PTA in Jakarta.
Pakistan, sources said, had threatened to retaliate and impose NTMs on Indonesia on a reciprocal basis aimed at making import of palm oil more restrictive. Indonesia is the biggest economy of ASEAN region with GDP of around $859 billion in 2015. It has also the world's fourth largest population of 255 million with per capita income $11,100(ppp) which makes it a lucrative consumer market.
Pakistan signed a PTA in 2013 which has now completed three years of its implementation. At the time of signing the PTA, Indonesia's exports to Pakistan were at $936 million (2011) which have increased to $2 billion in 2014, an increase of 112 per cent before slightly dipping down to $1.9 billion in 2015. On the other hand, Pakistan's exports to Indonesia showed a negative growth after the implementation of PTA as exports dropped to $173 million in 2015 from $273 million in 2011 which implies that balance was highly tilted in favour of Indonesia. Pakistan's edible imports have shifted from Malaysia to Indonesia after signing the PTA.
According to sources, Indonesia is urging Pakistan for removal of anti dumping duty on a couple of items related to coated board printing paper, printing paper, hydrogen peroxide and phthalic anhydride. Pakistan is seeking progress from Indonesia on the Memorandum of Understanding (MoU) signed in 2013. Pakistan is stressing the inclusion of Pakistani rice in the procurement process carried by the Bureau of Logistics (BULOG). Pakistan maintains that she should be allowed to participate in rice tending process. However, progress on this matter is zero.
Pakistan has also requested Indonesia to increase the margin of preference on some textile items especially apparel and bed sheets; and has argued that Indonesia should import potatoes from Pakistan. During the forthcoming meeting this issue will also come under discussion. Trade Development Authority of Pakistan and Indonesia Trade Development Organisation will also consider signing MoU aimed at enhancing trade activities between the two countries.
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