ISLAMABAD: Pakistan’s exports to Indonesia have seen a tremendous increase of 86 percent in first four months of 2017 on Year-on-Year basis.
Pakistan exported goods amounting to $91 million in first four months of 2017 as compared to $49 million in 2016 on Saturday. This upsurge in exports is predominantly due to Pakistan’s kinnow export to Indonesia, which have shown good growth during first four months of 2017. Export of Kinnow reached $48 million mark in 2017 as compared to $20 million in 2016.
This phenomenal increase in one season alone is a result of concerted efforts by various departments of Government of Pakistan including Embassy of Pakistan, Jakarta, Indonesia, Trade Development Authority of Pakistan (TDAP) and kinnow exporters. Pakistan convinced Indonesian Ministry of Trade and Ministry of Agriculture to lift ban from imports of kinnow from Pakistan for first four months of the year, whereas last year ban was lifted for merely three months.
Participation in various exhibition and trade shows in Indonesia sponsored by the Ministry of Commerce and TDAP considerably helped fresh fruit exporters to explore Indonesian market. Increase in exports to Indonesia has come at a time when the overall export situation of the country is not very pleasant.
Apart from Kinnow, products like raw cotton, 100 percent broken rice, woven fabric, sardine fish, leather and copper scrap, all are showing positive trends and most likely year 2017 will end with very high growth trend. Both countries signed a Preferential Trade Agreement (PTA) in 2012 which became operational in 2013. Pakistan’s exports to Indonesia were $156 million in 2016 which had a huge potential to grow.
Indonesia exports of $2 billion worth of items to Pakistan. Pakistan’s exports to Indonesia face hurdles due to arbitrary implementation of Technical Barriers to Trade by the Indonesian authorities. Recently, due to its successful commercial diplomacy, Pakistan has been able to relax one such unwanted barrier and Pakistan’s exports of Kinnow to Indonesia rose exponentially.
Pakistan and Indonesia are in the process of reviewing their Preferential Trade Agreement (PTA). Third meeting in this regard is scheduled to be held in August, 2017. During previous review meetings, both sides shared the lists of their concerns regarding the implementation of PTA during the first three years and agreed to take necessary steps to address those concerns.
Malaysia is watching this review process very closely. It is important to remember that due to the PTA between Pakistan and Indonesia in 2012, Malaysia lost substantial part of its palm oil trade to Indonesia. Malaysia is continuously pursuing for further expansion of its FTA with Pakistan. First meeting of FTA review exercise has already been held in Islamabad. Reportedly Malaysia is willing to offer Pakistan more concessions on items of its prime interest in-exchange of further concessions on palm oil. This would help Malaysia regain their lost share of exports of Palm oil to Pakistan’s, which is at the moment estimated to the tune of $2 billion and has further potential to grow.
