Indonesia offers Pakistan better market access

The Indonesian government has unilaterally agreed to provide Pakistani products with deeper market access under the preferential trade agreement (PTA), which will help reduce the negative trade balance between the two countries.

According to the source, the products on which duty will be reduced include agricultural produce, manufacturing products and fruits. Pakistan and Indonesia signed the PTA in 2012. It came into operation in 2013. Pakistan’s exports to Indonesia posted a negative growth while imports rose by over $1bn in the past three years.

Data shows Pakistan’s exports to Indonesia have dropped since the implementation of the PTA. Indon­esia’s exports have almost doubled post-PTA.

According to the source, the decision to offer a fresh duty reduction on 20 items will be in addition to compensating Pakistani exporters of leading products.

Pakistan already shared a list of products with the Indonesian government in the last three review meetings of the PTA. Islamabad has demanded that the tariff be reduced to zero per cent on two lines of textiles, knitted and woven fabric, garments, broken rice, mangoes, meat and meat products etc.

Asked about the advantages of the PTA, the senior commerce ministry official claimed that these agreements are required in today’s global trading environment where most of Pakistan’s competitors enjoy greater market access through such pacts.

“We need to negotiate these better rather than shying away from them. Shying away from PTAs will limit market access to our exporters. We have acquired such expertise and software where we can run models of our trade with different negotiating options in PTAs and free trade agreements,” the official added.

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