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em>Negotiations on a preferential trade agreement (PTA) between Indonesia and Pakistan, two nations with a long history of cooperation, have been in limbo for two years over concessions on palm oil and Kino oranges, among other things. Pakistani Ambassador M. Sanaullah talked to The Jakarta Post’s Mustaqim Adamrah as the country celebrates its national day on Wednesday. Here are excerpts of the interview.

Question: How has the relationship between Indonesia and Pakistan developed so far?

Answer: Our relationships with Indonesia are very normal and friendly, and free from any kind of tension.

Our relations have always been “people-centric” and will remain so. Our trade is improving in the sense that despite the failure to sign the PTA within the anticipated year of 2009 and 2010, trade is moving upward.

What has delayed signing of the PTA?

From your side, you want Malaysian-type of tariffs from Pakistan for palm oil. We are ready to give in if Indonesia gives zero tariffs to Kino (oranges) and to some other nine to ten tariff lines, mostly including agro products (and) textiles.

The matter can be resolved. I recently met the deputy trade minister (Mahendra Siregar) and we both agreed to approach our technical people (at the) technical ministries. Very soon we’re going to have a seventh round of talks in Pakistan. No date has been fixed yet, but maybe next month.

Our target is to conclude the PTA by May and then start the negotiations on a FTA (Free Trade Agreement) between Pakistan and Indonesia.

We usually do not get CPO (crude palm oil) from Indonesia. We get refined oil which we use for producing cooking oil in Pakistan. The largest part of your exports to Pakistan is in this field. Last year, there were US$763 million in exports we had from Indonesia to Pakistan, including more than $3 million worth of palm oil. Right now we have imposed some duties on their products — 20-25 percent on imports of palm oil, not only from Indonesia, but from Latin America as well. Imports of palm oil from Malaysia have a zero duty under the FTA.

What makes you optimistic that PTA negotiations will move forward?

The assurances are given by the Trade Ministry. If you don’t go for a quick conclusion and finalization of the PTA, Indonesian exports will suffer.

We will still get palm oil, but we get it from another country — Malaysia. Malaysia gets it from you, but this time they produce 7 million metric tons of palm oil because of improved yields, while Indonesian production is 24 million metric tons.

No doubt you have importing countries like India and China, but you produce more.

Do you think Indonesia has a good reason not to freely open the textile or orange market in Indonesia to Pakistan?

For Indonesia, textiles are important. You have 237.8 million people; 60 percent are younger than 20 years.

You can’t clothe them with synthetic materials alone because of your climate and because of changes in their preferences. You need to get cotton from Pakistan.

Another reason why you need to have it is that you are a very artistic nation. You are full of talent and have very sophisticated tradition of batik — not only to be practiced with silk but on cotton too.

If you don’t get a good quality of cotton and yarn to be developed into clothes here you would let this national tradition or cultural tradition die.

Going back to the citrus market. You produce too little. You have opened up your domestic citrus market at zero duty to China … and to Australia, and to products from the Middle East and Argentina as well.

So how can you close it for Pakistan on the plea that it is going to damage the domestic citrus market? The argument itself is not correct.

You cannot protect your domestic citrus market by closing your market to direct imports of Pakistani Kino. (Otherwise) you have opened it indirectly to smuggling or infiltration which is not covered by your customs.

Last year, last season, we saw Pakistani sub-quality Kino everywhere, in every market in Batam (Riau Islands), and Medan (North Sumatra), which is the hallmark of your citrus production. Everybody said it came from Singapore.