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Trade: Pakistan, Indonesia PTA comes into effect

Express Tribune, Pakistan

Trade: Pakistan, Indonesia PTA comes into effect


1 September 2013

ISLAMABAD: Indonesia and Pakistan have agreed to formally activate the Preferential Trade Agreement with effect from September 1 (Sunday), ensuring greater market access to their products.

The Indonesia-Pakistan Preferential Trade Agreement (IP-PTA) was signed in February 2012, the Ministry of Commerce said in a statement on Saturday.

The activation of the PTA followed the signing of a Mutual Recognition Agreement (MRA) on plant quarantine and Sanitary and Phytosanitary (SPS) measures between Indonesia and Pakistan on Friday, in which Indonesia officially acknowledged Pakistan as a pest-free area for kinnow.

Indonesia allowed Pakistani kinnow to be shipped to Tanjung Port of Jakarta. Through these steps, Pakistani agriculture products will gain greater market access in Indonesia, the statement added.

Under the PTA, Indonesia will grant market access at preferential rates to Pakistan export products including fresh fruits, cotton yarn, cotton fabrics, readymade garments, fans (ceiling, table, pedestal), sports goods (badminton and tennis rackets), leather goods and other industrial products.

Indonesia has granted market access to Pakistani kinnow at 0% tariff, which is expected to significantly enhance the export of this product.

Similarly, Pakistan will provide market access at preferential tariff rates to Indonesian exports.

Pakistan has extended a 15% Margin of Preference (MoP) over the standard tariff rate to Indonesian palm oil products, similar to what was extended to Malaysian palm oil products under the Pak-Malaysia Free Trade Agreement (FTA).

This would help in decreasing prices of vegetable ghee and cooking oil in the country and have a positive impact on the overall economy of the country.

It is expected that the mutual trade arrangement with Indonesia will also contribute to enhancing trade linkages with other economies in the Asean region and help in diversification of Pakistani export markets.