A one month delay in signing Free Trade Agreement (FTA) with Indonesia could exacerbate the export of Pakistani Kinnow, as the fruit would not be able to profit from relaxation of duty under the already approved FTA until 2013. If Pak-Indonesia FTA, already signed at secretary level this year, is not signed by the ministers of commerce from both countries before January 2012, Pakistani Kinnow which has a bumper crop in the country, would suffer for almost two seasons.
In a letter sent to Commerce Minister Makhdoom Amin Fahim On December 15, Pakistan Fruit and Vegetable Exporters, Importers and Merchant Association (PFVA) requested the minister to sign the FTA before next month to avail duty relaxation facility under the agreement by January 2012. The Indonesian market’s importance is second only to Iran, where trade is already disallowed under sanctions imposed by United Nation and United State of America this year, causing huge surplus/stock of fruit in the country. To practically implement the already approved FTA, the signature of the minister was needed, however, the association said, Pakistani ambassador in Jakarta could also be authorised by the minister to do the same in case of his unavailability. PTA was signed at secretary level on October 16 in Jakarta and the zero rated duty regimes could be established after the signing procedure.
“If the PTA is signed in December 2011, the implementation of import duty will be applicable from January 2012. However, if this is signed after December this year, the implementation will be effective from January 2013 or in simple words, the implementation will be delayed by another one year,” PFVA claimed. Implementation of FTA was also needed in view of the decision of State Bank of Pakistan (SBP) for not issuing the Export Form to exporters for exporting fruits to Iran.
Commenting on the issue, Waheed Ahmed, Co-Chairman PFVA said the only way to minimise losses to the country’s fruit exports this year would be via duty free market access to Indonesia. As SBP’s fresh move against trade deals with Iran has halted the country’s exports to Tehran causing a surplus of over 3000 containers worth Kinnow, a drastic decline in the exports of fruits was expected this year.