ISLAMABAD: Director General International Trade Corporation of Indonesia Deny W. Kurnia has said that Pakistan and Indonesia have great potential to enhance bilateral trade and learn from each others experience. He says that there is a need to establish close economic cooperation between Indonesia and Pakistan.
In an exclusive interview with Customs Today on the sidelines of the second Trade Ministers Council and fourth meeting of the Supervisory Committee of D-8 group, Kurnia said that his country pins high hopes with the second Trade Ministers Council and fourth meeting of Supervisory Committee of D-8 group because the group’s commitment could change the fate of the people of eight developing nations.
“Once we achieve a mutual understanding for benefitting out of each other’s expertise in relatively improved and developed sectors, we will not need to look forward to western countries in search of new potential markets for the consumption of our products” he observed.
Quoting the example of economic and trade fruits of EU, AFU, EEU and other regional economic blocs’ international cooperation, he said that once Pakistan would become able to have ample access to markets in far east countries, then Pakistan would not need to eye on American, European and other continental markets for exports.
He said that Pakistan and Indonesia had not fully benefited out of potential of Free Trade Agreement (FTA) so far and major reason in this regard was the non trend of traders of both the countries. “Both countries’ exporters and importers are not very much familiar to each others’ products as well as sectors with specialization, this is why both sides have not reaped the fruits of the FTA, however, both countries can make giant leap in this regard by arranging frequent exchanges of trade delegations” he added.
To a question he said that Pakistan should make elaborate arrangements to fully en-cash these emerging opportunities available in Indonesian markets. Indonesia has fully exploited FTA and successfully enhanced exports to Pakistan. However, Pakistan is still lagging behind despite the fact that it could also export more than 200 items to the Indonesian markets.
Regarding decline in textile exports to Indonesia from Pakistan, he said that Pakistani exporters needed to be apprised about the vast opportunities available in Indonesian markets for the export of textile related products. He said that decline in textile exports is also due to tough competition to Pakistan in Indonesia by its regional competitors like China, India and Taiwan, he said that India and Indonesia had already inked Free Trade Agreement (FTA).
“Export of Pakistani Kinno was only $ 3 million that has now jumped to $ 20 million. Indonesia is a big country with population of 250 million people. The share of productive youth is 66.6 percent and has become one of the largest economies of the world with GDP growth rate of 5.9 percent per annum” he added.
He further said that Pakistan and Indonesia having bondage of Islamic brotherhood enjoy cordial relations. There is a need to transform these relations into promoting bilateral trade, investment and joint ventures, he said and added that both the countries have bilateral trade volume of US$ 2.25 billion in the Year 2014. Pakistan’s export to Indonesia was US$ 138.17 million while Indonesian exports to Pakistan were US$ 2107.23 million with balance of trade in favor of Indonesia.
He said that Pakistan and Indonesia have signed a Preferential Trade Agreement and volume of bilateral trade between the two countries has no doubt, improved from $700 million in 2010 to $2.25 billion in 2015. However, there is plenty of scope to improve two way trades in many areas by providing better market access to each other’s private sectors, grant more tariff concessions and remove all non-tariff barriers that will help in promoting bilateral trade up to actual potential.
He recounted that trade between Pakistan and Indonesia has witnessed positive growth in the past few years, increasing from 0.7 billion dollars in 2005 to 1.6 billion dollars in 2012. In efforts to improve trade relations, the two countries signed a Preferential Trade Agreement (PTA) on February 3, 2012 which became operational in September 2013 after many rounds of negotiations.
Under the PTA, he added that Indonesia offered market access along 232 tariff lines, of which 103 are zero rated. Items in the preferential list include fresh fruits, cotton yarn, cotton fabrics, ready-made garments, fans, sport goods, leather goods and other industrial products. 0% market access is offered to Kinnow (mandarin) and oranges from Pakistan providing a level playing field to this product in the Indonesian market.