RI, Pakistan to ink trade pact today

The Indonesian and Pakistani governments are scheduled to sign the long-discussed preferential trade agreement (PTA) on Friday, the Pakistani Embassy said in a press statement on Thursday.

“Trade Minister [Gita Wirjawan] will [as Indonesian representative] sign the PTA,” Indonesian Trade Ministry director general for international trade cooperation Gusmardi Bustami told The Jakarta Post on Thursday.

“The Pakistani Minister of Commerce [Makhdoom Amin Fahim] cannot attend the signing. He will be represented by Pakistani Ambassador [M. Sanaullah],” he said.

Talks on the PTA, which started in 2005, were delayed as Indonesia and Pakistan could not find common ground on tariff reductions for several commodities, including principal export commodities from both nations: Indonesian palm oil and Pakistani kino oranges.

Gusmardi earlier said he expected that the trade deal would boost Indonesia’s export of palm oil and other products, including electronics, to Pakistan.

Under the deal, Indonesia’s principal export commodity — palm oil — for example, will enjoy the same level of import duty as Malaysian palm oil, while Pakistani kino oranges will pay no duty, which will enable them to compete better with similar products, mainly Mandarin tangerines.

Indonesian Palm Oil Producers Association (Gapki) executive director Fadhil Hasan earlier said he welcomed the agreement, expecting that palm oil exports would rebound under the PTA to their pre-2007 level of around US$560 million, when Indonesian palm oil had a commanding 55 percent market share in Pakistan.

Pakistan currently levies a tariff of 9,500 to 10,800 Pakistani rupees (US$123) per metric ton on Indonesian palm oil, about 15 percent higher than tariffs on palm oil from Malaysia, which already has a PTA with Pakistan.