04/11/2011 (APP): Pakistan and Indonesia have successfully concluded the negotiations process of Comprehensive Economic Partnership Agreement (CEPA) on the 8th round of negotiations held on Sep 16, in Indonesia. According to a statement issued here on Thursday, Pakistan and Indonesia signed the 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 Preferential Trade Agreement, according to which, the agreement would ultimately create a ‘Free Trade Area’ between the two countries. Now both countries successfully concluded the negotiations process during the 8th round of negotiations held on September 16, 2011 in Jakarta, Indonesia. Under the Agreement, Indonesia agreed to offer market access to Pakistan on 221 tariff lines of on preferential rate. 

The Indonesian offer list include the products of export interest of Pakistan including 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 0% which will provide a level playing field to this product in the Indonesian market.

Pakistan’s offer list to Indonesia under the Agreement includes a total of 288 tariff lines for market access at preferential tariff.

Pakistan also agreed to offer to provide the same treatment on Palm Oil products from Indonesia as provided to Malaysia under Pak-Malaysia FTA and it means Pakistan will import palm oil from Indonesia at 15 percent Margin of Preference (MoP) rate.

Pakistan has been importing palm oil and its products from Malaysia and Indonesia.

The preferential market access provided by Pakistan to Indonesian palm products will have a positive impact on the overall economy of the country.

It is expected that this will result in saving approximately US$ 300 million of foreign exchange of Pakistan.

It will also help in decreasing the prices of vegetable ghee, cooking oil etc in the country which are going beyond the reach of common man and will create competition in the market which will discourage monopolistic trends.

The Cabinet in its meeting held on 2nd November, 2011 approved the signing and ratification of the PTA between the two countries.

The Preferential Trade Agreement will be signed by the Commerce Ministers of both countries at a date and venue to be agreed through diplomatic channels.

The Agreement shall enter into force 30 days after the date on which the Parties exchange written notifications for completion of their respective legal procedures.