Indonesia to eliminate duties on 20 more tariff lines

Pakistan sought these concessions to correct imbalance in bilateral trade

ISLAMABAD: Indonesia has offered Pakistan unilateral concessions on 20 more tariff lines as part of an existing preferential trade agreement (PTA), which will 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 it has pushed bilateral trade from $1.39 billion in financial year 2012-13 to $2.44 billion in 2016-17.

However, this 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.

Explaining the decline, the Ministry of Commerce said it came because Pakistan’s initial request list to Indonesia for tariff concessions under the PTA did not feature the 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.

Speaking at a press conference on Friday, Commerce and Textile Minister Pervaiz Malik revealed that Pakistan had highlighted the imbalance in bilateral trade with Indonesia in the last review meeting in Jakarta in August 2017 and pressed for making the agreement mutually beneficial for both countries and dismantling the non-tariff barriers.

Responding to the demand, Indonesia agreed to immediately eliminate duties on 20 tariff lines, a relief which the minister termed a major breakthrough and success for the ministry.

The new products included in the zero-duty list are mangoes, broken rice, tobacco, yarn, fabrics, denim, garments, towels, bed linen and others.

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.

Under the revised PTA, Indonesia has eased restrictions on kinnow shipments by expanding the import period from two to four months. Mangoes can also be exported at zero duty for the entire season.

“Amendments to the PTA will be signed during the visit of Indonesian president to Islamabad next week,” the minister announced.

Responding to a question, he said talks were at an advanced stage on inking a free trade agreement with Thailand.

Regarding trade liberalisation with India, he said work was currently under way on finalising positive and negative lists.

Commenting on the second biennial review of the Generalised Scheme of Preferences (GSP) Plus status, granted by the European Union in 2014, later this month, the minister said Pakistan had worked hard to meet all requirements to keep the status intact.

In return for duty-free access to EU markets, Pakistan has to implement 27 United Nations’ conventions. According to the minister, progress has been made on many of the conventions and in case the EU raised any objection, Pakistan has prepared its line of defence on all issues.

Published in The Express Tribune, January 20^th, 2018.

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