A Mutual Recognition Agreement (MRA) between Indonesia and Pakistan along with a Recognition of Pest Free Area was officially signed in Jakarta,Indonesia on August 30, 2013, aimed to remove the non-tariff barriers being faced by the Pakistani farmers in exporting Kinnow to Indonesia and to allow the entry of the fruit via the main port in Jakarta.
The MRA was signed by Mrs. Banun Sri Harpini from Indonesia (The Indonesian Agriculture Ministry’s Quarantine Agency chief) and Ambassador Sanaullah from Pakistan in the presence of Mr. Burhan Muhammad, Ambassador of Indonesia to Pakistan and other high-level officials.
The signing of the MRA by both sides is an important development since it has removed the impediments in the implementation of long-awaited Indonesian-Pakistan Preferential Trade Agreement (PTA), which will now be effective from 1 September, 2013.
Speaking on the occasion, the Ambassador of the Republic of Indonesia to Pakistan, H.E. Mr. Burhan Muhammad said that Indonesia greatly values its relationship with Pakistan and expect to see more robust trade activities between the corporate sectors of the two countries after the implementation of PTA. He said “I am quite optimistic that PTA will take the bilateral trade volume up to US$.2 billion within a year, encourage our Pakistani friends to expand their trade linkages with Indonesia and would eventually lead to our next objective of Free Trade Agreement (FTA)”. The Ambassador also thanked and acknowledged the cooperation and support of the concerned Ministries of Indonesia and Pakistan as well as the business communities of two countries during the whole process of the conclusion of PTA and MRA. Mr. Burhan expressed hope that more projects of interest will be identified in future and mutual collaboration will be enhanced between the two countries especially in the areas of energy sector, agribusiness, manufacturing, tourism, and industrial development.
The Indonesia - Pakistan: “Preferential Trade Agreement” (PTA) was signed on February 03, 2012, and is a landmark development in the history of bilateral economic relations between Indonesia and Pakistan. The implementation of PTA from 1st September 2013 will not only raise bilateral trade volume considerably but also open doors for the Pakistani businessmen to penetrate into the emerging ASEAN market. Under the PTA, Indonesia has agreed to offer market access to Pakistan on 232 tariff lines on preferential rate. The list includes export products in the interest of Pakistan that are fresh fruits, cotton yarn, cotton fabrics, readymade garments, fans, sports goods, leather goods and other industrial products. Indonesia has also offered market access to Kinnow (mandarin) and oranges from Pakistan at 0%, which will provide a level playing field to this product in the Indonesian market.
Likewise, Pakistan has offered Indonesia a total of 311 tariff lines for market access at preferential tariff. It includes edible palm oil products, sugar confectionary, cocoa product, consumer goods, chemicals, tableware, kitchenware as well as rubber, wood , glassware and electronic products. Among Pakistan’s concession is the same preferential treatment on edible palm oil products from Indonesia as provided to Malaysia under Pakistan Malaysia Free Trade Agreement. Pakistan’s economy being the second largest in the South Asia region after India is one of the emerging markets in the world and has strategic value to Indonesia. Similarly, Indonesia being an important member of ASEAN with the largest economy and a member of the G20, will be a good partner to enhance the economic and trade relations between the two countries in the Asia Pacific region