20 tariff lines with Indonesia: successful trade diplomacy helps gain concessions: ministry

Commerce Ministry said on Friday that unilateral trade concessions granted by Indonesia on 20 items is a result of successful trade diplomacy efforts by the incumbent team. Addressing a press conference, Minister for Commerce and Textile, Pervaiz Malik, flanked by Secretary Commerce, Younus Dagha, said that unilateral concession granted by Indonesia will formally be signed on January 26, during the visit of Indonesian President.
Secretary Commerce, Younus Dagha while sharing the background of unilateral concessions said that bilateral trade with Indonesia has increased from$ 1.231 billion in 2011-12 to $ 2.263 billion in 2015-16. Under the IP-PTA, Pakistan offered preferential tariff to Indonesia on 313 tariff lines, whereas Indonesia reduced tariff on 232 tariff lines for Pakistan. Even after signing the PTA, Pakistan's exports to Indonesia did not increase.
He said at the time of signing of PTA (2012-13), total volume of trade was $ 1.39 billion which rose to $2.44 billion in the year 2016-17. The growth in bilateral trade was due to increase in Indonesia's exports to Pakistan. Whereas, Pakistan's exports to Indonesia showed negative growth after the implementation of PTA. Pakistan's exports to Indonesia declined from $ 196 million in 2012-13 to $ 138 million in 2016-17. Out of 232 tariff lines included in Indonesia's offer list, only 32 tariff lines could be utilized, whereas rest of tariff lines in the offer list remained un-utilized by our exporters.
In terms of volume of trade, tariff lines offered to Pakistan for preferential market access covered only 27% of the volume of trade (in dollar terms) in 2012. This percentage increased to 48% and then slipped down to 33% in 2016-17. This clearly demonstrates that Pakistan's request list to Indonesia did not contain tariff lines of its prime export interest. For example, there are 24 tariff lines in which Pakistan's exports to Indonesia over the last five years have been above $ 1 million or more. Out of these 24 tariff lines, only 4 are covered under PTA.
During the last review meeting held in August, 2017, in Jakarta, Indonesia, the Ministry of Commerce raised the issue of imbalance in bilateral trade and imposition of Non-Tariff Barriers (NTBs) by Indonesia. Pakistan side urged the Indonesian side to make this PTA mutually beneficial and to remove non-tariff barriers on Pakistani products.
After protracted negotiations and persistent efforts of the Ministry of Commerce, the Indonesia side has now agreed to immediately reduce tariff to zero on 20 tariff lines of Pakistan's prime interest. Major items included are mangoes, broken rice, tobacco, yarn, fabric, denim, garments, towels and bed linen. These 20 tariff lines account for around 25% of Pakistan's global exports. Indonesia's global imports in these tariff lines are around $ 600 million. This is a sizeable market access considering Indonesia's very high tariffs on a number of these tariff lines.
Indonesia has also relaxed its import restrictions on "kinnow", allowing import from two to now four months to accommodate Pakistan's concern. Besides this, mango has also been granted market access at zero duty for the entire season. This is the first time Indonesia has opened the import of mango for any country. In order to implement the market access granted on the new 20 TLs, the two sides will be signing a protocol during the visit of Indonesian President scheduled on 25-26 Jan, 2018 as some of the Articles of PTA require amendments.
During question answer session, Secretary Commerce, however, acknowledged that trade deficit is a big challenge. He said that oil prices have risen from $ 47 to $ 67 per barrel, LNG and edible oil imports have a major share in the country's imports which is the reason for the trade deficit. Exports have increased by $ 1.1 billion during the first six month of current fiscal year as compared to corresponding period of last year.
The impact of rupee depreciation will be seen in the coming couple of months. We hope exports will grow by $ 2.5 billion by the end of current fiscal year. He said Afghanistan wants India to be part of APTTCA, and Pakistan is interested in trade with each country however Afghanistan must agree to a meeting with Pakistan and if a meeting takes place only then will there be progress. "India has nothing to with APTTA as only two parties are involved. Nothing can be said on a new schedule of meeting but it should be held early, "he added.
On a question regarding trade liberalization with India, Commerce Minister said that presently trade between Pakistan and India is being done on the basis of positive and negative lists. "We understand that things are moving forward between the two countries and when dialogue will resume all such modalities will be discussed," the Minister continued.
On a question regarding possibilities of continuation of EU's GSP plus scheme, the Minister stated that they are praying that the incentives continue. All departments have fulfilled their responsibility however the EU's evaluators' have their own thinking. Pakistan can adequately respond to and defend each EU concern he said adding that the Treaty Implementation Cell (TIC) headed by Attorney General is looking into this matter with the assistance of his team.
Commerce Minister said that federal government has fulfilled its responsibilities with respect to implementation of 27 UN Conventions; and some issues have been fully resolved by the provincial governments. On a question regarding execution of terrorists, Commerce Minister said that this is being done as a last resort.
Secretary Commerce Younsus Dagha said that whatever proposals Pakistan has given to China with respect to FTA-II, are being considered positively, and he was hopeful of good news from China next month. He further maintained that talks with China on expansion of FTA are being held in accordance with current economic relations.
Answering a question regarding $ 3 billion difference in trade figures of Pakistan and China, Secretary Commerce said "we are incorporating clause of Electronic Exchange Data (EED) in the FTA II to counter under invoicing and unethical trade". In reply to a question, Commerce Minister said that refunds policy was amended in the Prime Minister's Rs 180 billion export incentive package aimed at paying refunds to the exporters as early as possible and for this purpose SBP has opened a new window and hired people for this purpose.