17/06/2011 (Jakarta Post) - Indonesia and Pakistan have temporarily halted negotiations on a preferential trade agreement (PTA), as both countries found no breakthroughs to solve their differences on tariff reductions over a number of commodities, including palm oil and kino oranges.

Deputy Trade Minister Mahendra Siregar said Thursday that the efforts of both parties in the negotiations, which had taken place for about five years, had been maximal.

“We have made our best efforts, but it seems that the internal conditions in Pakistan have not enabled us to move on. So, we are just waiting for further development,” he said.

Mahendra said Indonesia expected a breakthrough from its Pakistan counterpart should the two countries agree to resume talks.

Negotiations on the PTA between the two countries have been deadlocked for two years over concessions on several commodities. The seventh round of talks conducted in Pakistan from June 10 to June 11 failed to make any progress.

Indonesia has asked for tariff reductions of palm oil, sorbitol, ceramics and paper, while Pakistan requested tariff reductions of kino oranges along with several agricultural products and textiles.

According to Trade Ministry director general for international trade cooperation Gusmardi Bustami, Indonesia had agreed to reduce 60 percent of post tariffs requested by Pakistan.

“Indonesia has been flexible, but I did not see a similar response from Pakistan” he said.

Pakistan Ambassador M. Sanaullah said both parties had tried to move forward to finalize the PTA talks. “However, negotiations could not be concluded despite the registering progress,” he told The Jakarta Post.

The ambassador suggested the two countries hold another round of talks in order to wrap up negotiations.

“I appreciate the positive flexibilities shown by the brotherly country of Indonesia. Pakistan also came along with some improved proposals. Regretfully, both sides despite their best efforts and good will could not find a common meeting place on a few tariff lines,” he said.

Indonesian Palm Oil Producers Association (Gapki) chair Fadhil Hasan expressed his disappointment over the failure of the PTA and said he expected the governments would continue to talk.

Fadhil said Indonesia’s palm oil exports to Pakistan had declined sharply following a free trade agreement (FTA) between Pakistan and Malaysia in 2007. The trade pact enabled Malaysia to enjoy 10 percent less duties on palm oil than Indonesia, he said.