Sunday, 26 February 2012


              The total value of Indonesia-Pakistan trade volume had the potential to reach USD 10 billion, while today before discussion of Preferred Trade Agreement (PTA) between the nations was signed, the total value was posted at only USD 1 billion. The increase was because Indonesia’s export of CPO to Pakistan would increase after import tax was lowered based on PTA agreement between the two countries. This was disclosed by the Ministry of Trade Gita Irawan after signing of PTA between Indonesia and Pakistan with the Ambassador of the Islamic Republic of Pakistan, Sanaulah on Friday (3/2).

            The two leaders agreed that the agreement would be mutually beneficial to both nations, especially in terms of Indonesia’s export to Pakistan which would be more competitive without import tax barriers. Over the past three years, before Indonesia-Pakistan PTA was signed, Indonesia’s CPO had been unable to fill in Pakistan’s domestic market which accounted for slump of Indonesia’s export of CPO to Pakistan from USD 552 million in 2007 to USD 91.2 million in 2010”, Gita remarked.

            Meanwhile Pakistan’s Ambassador Sanaulah stated his optimism that Indonesia-Pakistan trade relation would reach USD 2 billion by end of this year with the signing of PTA agreement between the two nations. Meanwhile Gita was convinced that Indonesia’s export of CPO to Pakistan might come to USD 60 million while also more tan 400 product items would be liberated.

           Under the PTA Agreement, Indonesia had agreed to open market access for 246 tariff posts. The list included commodities needed by Pakistan like fresh fruits, textiles, garments, sports equipments like badminton and tennis rackets. Furthermore also leather products and other industrial products. Indonesia had also opened access for kinow (Mandarin) lemons and Pakistan’s oranges with zero percent import tax.

             In return, from Pakistan Indonesia got access to 287 tariff posts to enter the Pakistani market as agreed in PTA including vegetative oil and CPO Palm Stearin, RBD Palm Oil, Palm Olein, Palm Kernel Oil, sweet candies, cacao products, consumers goods including toothpaste, soap, deodorants, chemical products, household goods, rubber products, wood, glass products and electronic goods.

           Among the concessions give by Pakistan would be equal tariff for cooking oil from Indonesia (Just as Malaysia under the Indonesia – Malaysia Free trade Agreement) Indonesia’s export to Pakistan included coal products coal brackets, coal condensed goods (USD 229.5 million) CPO products and by products USD 40.6 million; synthetic fabrics Rp 40,6 million; unlayered paper worth USD 30 million. On the other hand Indonesia’s main imports from Pakistan included cotton USD 20.6 million; 85% cotton cloths worth USD 10.1 million, and woven clothes USD 6 million.

 Business News - February 8, 2012

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