Pakistan and Indonesia have agreed to sign Preferential Trade Agreement (PTA) under which both countries would enjoy market access on a preferential rate. The federal cabinet in its meeting held on 2nd November, 2011 approved the signing and ratification of the PTA between the two countries.
Under the Agreement, Indonesia agreed to offer market access to Pakistan on 221 tariff lines on preferential rate while Pakistan has offered Indonesia preferential tariff under 288 tariff lines for market access.
After the signing of PTA agreement between both the countries, PTA shall enter into force within 30 days, after the date on which the parties exchange written notifications for completion of their respective legal procedures. Pakistan and Indonesia signed the Comprehensive Economic Partnership Agreement (CEPA) in November 2005 on the occasion of the visit of the President of Indonesia to Pakistan.
Under the provisions of CEPA, in 2006, both countries commenced negotiations to conclude a PTA. The agreement would ultimately create a Free Trade Area between the two countries. Both countries successfully concluded the negotiations process during the 8th round of negotiations held on 16th September, 2011 in Jakarta, Indonesia. Under the Agreement, Indonesia agreed to offer market access to Pakistan on 221 tariff lines on preferential rate includes fresh fruits, cotton yarn, cotton fabrics, readymade garments, fans (ceiling, table, pedestal) sports goods (badminton and lawn tennis rackets), leather goods and other industrial products. Indonesia also offered market access to Kino from Pakistan at zero per cent which will provide a level playing field to this product in the Indonesian market. Similarly Pakistan’s offered list to Indonesia, under the agreement, includes a total of 288 tariff lines for market access at preferential tariff.