THURSDAY JANUARY 19: PTA signing with Indonesia put off indefinitely

ISLAMABAD: The signing of Preferential Trade Agreement (PTA) between Pakistan and Indonesia has been put off for an indefinite period due to political uncertainty in the country, well informed sources told Business Recorder. Indonesia is among those countries which are opposing European Union's trade package for Pakistan's flood affected people.
Senior Minister for Commerce, Makhdoom Amin Fahim was due to leave for Jakarta on a two day official visit on Thursday (today) to ink the much awaited PTA which will ultimately lead to a Free Trade Agreement (FTA) between the two countries. However, he has been directed at the top level that he should not proceed abroad until the current dust is settled, the sources added.
"As the Prime Minister, Syed Yousuf Raza Gilani, will appear before the Supreme Court today in a contempt of court case, senior leadership of PPP including Makhdoom Amin Fahim, who is also the Chairman PPPP, will accompany him," the sources added.
Fahim, sources said, is also the member of PPP's Core Committee which reviews political affairs on a day-to-day basis, which is the main reason for putting off Indonesia's official visit. According to the sources, Commerce Minister Amin Fahim will sign the agreement with his Indonesian counterpart Gita Irawan Wirjawan. According to sources, Indonesian Commerce Minister has agreed that the PTA will serve as a firm foundation on which both countries could build much stronger economic relations.
Pakistan and Indonesia signed the Comprehensive Economic Partnership Agreement (CEPA) in November 2005 on the occasion of the visit of President of Indonesia to Pakistan. Under the provisions of CEPA, both countries commenced negotiations to conclude a PTA which would ultimately create a Free Trade Agreement (FTA) between the two countries.
Under the PTA, Indonesia has agreed to offer market access to Pakistan on about 220 tariff lines on preferential rates. According to documents, Indonesia will eliminate tariff on export of kinnows, grapefruits, lemons, grapes, peaches, dates, apples, and apricots from Pakistan.
Indonesia will provide preferential market access at 50 percent MoP on 'halal' food products, such as fruit juices, biscuits and confectionery and dry fruits from Pakistan. The documents also reveal that Indonesia would eliminate tariff on certain chemicals from Pakistan, such as chlorine, hydrochloric acid, di-sodium carbonate and dyes.
Indonesia will provide preferential market access to Pakistan on motorcar tyres, leather products, sports leather garments, gloves, leather accessories, wood products, ceiling fans, cutlery, sports goods, textile products such as silk fabrics, cotton yarn waste, cotton yarn, cotton fabric, synthetic filament yarn, embroidery, knitted shirts, cotton shawls, cotton tracksuits and clothing accessories.
Pakistan's offer-list to Indonesia under the Agreement comprises as many as total 288 tariff lines for market access at preferential tariff. Under the PTA, edible oil refineries will get cheaper raw palm oil, which would revive the edible oil refining industry in Pakistan.
Besides edible oil, Pakistan has also agreed to provide preferential market access to Indonesia for the following products: some varieties of fish (tuna, trout, shrimps), fresh fruits (coconut, pineapple and mangosteen), edible products (coffee, green tea, black tea, pepper, vanilla, cinnamon, nutmeg, cardamom, coriander, cloves, ginger, turmeric, lactose, maple syrup, cocoa beans, cocoa confectionery, shrimp crackers, malt extract, pineapple juice, soya sauce), industrial inputs - citric acid, varnishes, esters, surface-active ingredients), chemicals (mosquito coils, prepared waxes, oleic acid) and manufactured goods (contraceptives, gaskets of rubber, printing blankets, tanned leather, computer printers, electric amplifiers, digital cameras, flat monitors, golf balls, sunglasses, musical instruments).