RI, Pakistan agree to broaden PTA agreement

Hua Hin (ANTARA News) - Indonesia and Pakistan have reached  agreement to increase the number of commodities to be covered in their Preferential Trade Agreement (PTA), Trade Minister Mari Elka Pangestu said here over the weekend. 

"Previously PTA talks between the two countries focused on a reduction of import duty on Indonesia's crude palm oil (CPO) exported to Pakistan and on Pakistan's 'kino' oranges exported to Indonesia," the trade minister said on the sidelines of the 14th ASEAN summit in the resort city of Hua Hin, some 200 km from Bangkok. 

The minister said that Indonesia agreed to cut its import duty on Pakistan's orange exports in return for its import duty cut on Indonesia's CPO exports. 

"But Pakistan also asked for an exchange of import duty cuts on other commodities besides on the CPO and oranges," the minister said. 

She said Indonesia would therefore also ask for the lowering of the import duty on its exports of other commodities such as paper while Pakistan would also propose other types of commodities. 

"Because we asked for additional types of commodities, they also asked the same thing," she said. 

The minister said that both sides were still negotiating tens of commodity tariff headings that still needed further agreements before the PTA was signed. 

"We hope that agreements on these would be reached sooner because Malaysia has been enjoying a preferential tariff on its CPO exports," she said. 

The PTA negations between Indonesia and Pakistan were expected to be completed last year but due to the change in the government leadership in that country, the talks could be resumed only last month. 

During the on-going talks on PTA, Pakistan has agreed to lower its import duty on Indonesia's CPO exports, including its by-products, by 10 percent. 

In return, Indonesia agreed to lower its import duty on Pakistan's 'kino' orange exports. 

The agreement is badly needed by Indonesian CPO exporters. Indonesia's CPO exports to Pakistan are relatively high, reaching US$400 million per annum.