Textile and seafood: Indonesia pressed to provide concessions

Pakistan says trade accord contingent on duty reduction.

ISLAMABAD: Pakistan has asked Indonesia to withdraw duty on kinnow exports and provide easy access to textile and seafood products before any preferential trade agreement could be signed between the two countries, officials say.

Pakistani government has also made it clear that no concessions will be provided on Indonesian palm oil imports if easy access is not provided to Pakistani textile, value-added leather garments and surgical equipment through reduced duties.

The date for the seventh round of talks on a preferential trade agreement between the two countries could not be decided as an offer list has yet to be finalised. Six rounds of talks have already taken place and the seventh round will be hosted by Pakistan.

According to documents available with The Express Tribune, the first round of negotiations for preferential trade took place on June 13, 2006 in Islamabad while the second round on August 28-29 in the same year in Jakarta. The third round was held on March 12 and 13, 2007 in Islamabad and the fourth round on September 20-21 in the same year in Jakarta. The fifth round of deliberations was held on February 17-18, 2009 in Islamabad and the sixth round took place on December 29-30, 2009 in Bali.

According to sources, Pakistan is pressing Indonesia to provide the same kind of concessions that it is offering to China for kinnow export. Pakistan also wants duty concessions on export of textile products and seafood while Indonesia is insisting that Islamabad provides up to 15 per cent concession on palm oil imports under the preferential trade agreement.

Earlier, Pakistan imported palm oil from Indonesia worth $1 billion annually, accounting for 55 per cent of total imports while the remaining 45 per cent was imported from Malaysia.

Later, Malaysia got 15 per cent duty concession and its share rose to 70 per cent while Indonesian share dropped to 30 per cent. The absence of a preferential trade agreement will cause Indonesia a loss of $500 million annually. According to sources, Pakistan has told Indonesia that it can get the same concessions as Malaysia if it grants Pakistani kinnow zero-duty status.

Published in The Express Tribune, December 28^th, 2010.