Pakistan, Indonesia may implement PTA this month

Published: January 03, 2013 


Pakistan and Indonesia may implement the much-waited Preferential Trade Agreement (PTA) by the middle of January 2012, sources at Pakistani embassy in Indonesia claimed. The implementation process is being delayed for last one year despite the fact that the PTA has already been signed by the two countries last year. 

However, the sources claimed that the embassy after consultations with the Indonesian government was optimistic that the agreement would be effective by January 18, 2013. According to sources, the PTA, signed on February 4, 2012, was aimed at improving relations between brotherly countries besides providing a level playing field to exporters on both sides. It will also help Pakistani exporters to gain enhanced access to Indonesia market on 216 tariff lines on preferential rate. 

The agreement would also be an opportunity for Pakistani businessmen dealing in fresh fruits, cotton yarn, cotton fabrics, readymade garments, fans sports goods, leather goods and other industrial products. Pakistan fresh fruit/vegetable exporters, according to Waheed Ahmed, Chairman Pakistan Fruit and Vegetable Exporters, Importers and Merchant Association (PFVA) were also eying export of at least 45,000 tonnes of orange [kinnow] during the ongoing season. However, the earlier implementation of the agreement was needed to export the expected number of kinnow. Indonesia could be an alternative market of Iran where the fruit could not reach amidst sanctions imposed by UN and USA. 

Under the sanctions, various banks in the country have stopped issuing E-forms to the exporters of fruit causing huge losses to them. The exporters have lost the opportunity to export around 3,000 containers of kinnow and revenue of at least $30 million. 

Beside the fruit/vegetable sector, according to sources, under the PTA Pakistan may also save $35 per tonne on import of palm oil from Indonesia which will help the country save $70 million per annum. The agreement is also expected to give a strong boost to the bilateral trade escalating it up to $2 billion in coming years from the trade volume in year 2011 which stood at around $1.2 billion. On the other hand, Indonesia would also be able to increase its export of crude palm oil to Pakistan.