PTA with Pakistan: Indonesia to notify more duty relief by month-end2 min read

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ISLAMABAD:  Indonesia has assured Pakistan that it will notify the inclusion of 20 additional tariff lines in the Pakistan-Indonesia Preferential Trade Agreement (PTA) by the end of November.

The assurance came during a meeting between Commerce Division Secretary Mohammad Younus Dagha and Indonesian Minister for Trade on the sidelines of the China International Import Expo in Shanghai. Both sides agreed to further strengthen trade relations between the two countries.

Also Read: Pakistan-Indonesia PTA could be upgraded to FTA

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During the meeting, Dagha raised the issue of delay in the notification for including 20 additional tariff lines in the PTA. The Indonesian minister for trade assured the secretary that the notification would be issued by the end of November.

The addition of new tariff lines to the agreement will help Pakistan’s exports to Indonesia grow further. Products like denim fabric, ethanol, home textile, towel, rice and mangoes will benefit as their shipments are expected to go up.

Indonesia had offered Pakistan unilateral concession on 20 more tariff lines as part of the existing PTA, which would make imports of these products from Pakistan duty-free and bring some balance in bilateral trade, particularly in favour of Islamabad.

The PTA between Pakistan and Indonesia has been in place since 2013 and has pushed bilateral trade from $1.39 billion in financial year 2012-13 to $2.44 billion in 2016-17.

However, the growth has not had a favourable impact on exports from Pakistan as these have gone down from $196 million in 2012-13 to $138 million in 2016-17.

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According to the Ministry of Commerce, Pakistan’s initial request list to Indonesia for tariff concessions under the PTA did not feature prime export goods. Apart from this, Pakistan’s exporters failed to fully utilise the 232 tariff lines on which Indonesia had offered duty relief as they focused only on 32 product categories. Responding to the demand, Indonesia agreed to immediately eliminate duties on 20 more tariff lines.

Pakistan hopes to cash in on the concessions as these 20 product categories account for 25% of the country’s global exports. Indonesia imports goods worth $600 million under these tariff lines. 

Published in The Express Tribune, November 7th, 2018.

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