ISLAMABAD  – The Preferential Trade Agreement (PTA) signed between Pakistan and Indonesia early this month, is expected to be ratified by the end of March, officials said on Tuesday.  The PTA between the two countries will result into export of Kinnows with a huge boost.  The agreement has reduced the tariff rate for Kinnows from 25% to zero tariff.

This positive development will also ease the current problems being faced by Kinnow growers for export of their product.  The negotiations for the PTA spanned six years. In pursuance of the government of Pakistan’s special instructions to expedite finalization of PTA, Commerce Secretary Zafar Mahmood, visited Jakarta in September last year to negotiate zero duty for Kinnows and to also seek concessional tariffs for other Pakistani items of export.

Under the PTA, the Indonesian government has offered market access at reduced rates to 220 tariff lines including ASEAN treatment of end rate of 5% to 27 products and zero duty to 94 products.

Besides agricultural products and Kinnow, other export items that would enjoy these concessions include Halal food products, certain chemicals, finished leather, cutlery items, sport goods and textiles.

Bilateral trade, which has already crossed one billion dollars mark for the first time, is likely to benefit from the expanded market access for Pakistan’s products to Indonesia.  Last year, Pakistan’s exports grew by 131.72%. With PTA signed, the newly established Jakarta chapter of Pakistan-Indonesia Business Council expects the bilateral trade to grow beyond US$ 2 billion.

The Council is also of the view that the current focus of Pakistani exports on raw cotton and cotton clothes, wheat, unmanufactured tobacco is likely to shift to semi-manufactured products.

The business community which is already in contact with importers of fruit, especially Kinnows, has recently visited Jakarta and signed a series of contracts.

On behalf of the government of Pakistan, the Ambassador of Pakistan, Sanaullah has extended an invitation to the Indonesian Trade Minister, Gita Wirjawan, to visit Pakistan at his earliest convenience.

During the visit, negotiations for Free Trade Agreement are likely to be held. The Indonesian Minister showed his keen interest to visit Pakistan and stated his intention to use Pakistan as a “transport hub” to Afghanistan, Central Asia and regions beyond for export of Indonesian commodities.

He also indicated that Indonesian palm oil exporters would build a palm oil terminal at Port Qasim for which a delegation would be visiting Pakistan soon.