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Thursday, February 15, 2024

Indonesia-Pakistan to sign free trade agreement?

Due to the PTA between Pakistan and Indonesia, cooperation between the two countries had increased in the industrial sector including agriculture, Ambassador of Indonesia said.

Ambassador of the Republic of Indonesia to Pakistan, Adam Mulawarman Tugio on Wednesday said Pakistan and Indonesia had strong prospects for proposed bilateral Free Trade Agreement (FTA), which help strengthen economic and trade ties between the two countries.

The Preferential Trade Agreement (PTA) already existed in both the countries which opened up the possibility of increasing bilateral trade, he said.

Due to the PTA between Pakistan and Indonesia, cooperation between the two countries had increased in the industrial sector including agriculture, Ambassador of Indonesia, Adam Mulawarman Tugio told APP here.

The Ambassador said Indonesia had recently reduced trade tariff for facilitating to Pakistan in 20 trade items in the bilateral PTA review.

He said trade between the two countries had doubled since the PTA and Indonesia’s exports had increased, adding that talks were underway to reduce the trade gap between the two countries.

He said strengthening the economic and trade ties between Pakistan and Indonesia were being negotiated on ASEAN Trade in Goods Agreement (ATIGA).

Read more: Leveraging free trade agreements for Pakistan’s export growth

The Ambassador said Indonesia had a strong role to play, adding, progress was being made to enhance economic and trade integration between Pakistan and Association of SouthEast Asian Nations (ASEAN).

He hoped that the agreement of ATIGA would be finalized next year.

He said ATIGA was a result of almost two decades of trade integration efforts amongst the AMS, starting with the signing of ASEAN Free Trade Area (AFTA) in 1993.

ATIGA, which was the forerunner of the ASEAN Plus 1 FTAs, including the recently signed Regional Comprehensive Economic Partnership (RCEP) agreement, consolidated and streamlined the provisions in the Agreement on the Common Effective Preferential Tariff (CEPT) and other relevant ASEAN agreements, and broadened its scope, he informed.

He said ASEAN was a strong trade bloc and in the future ASEAN countries were striving to establish trade and economic ties with the world.

Ambassador Tugio said Pakistan and ASEAN countries had a combined economic and trade market of 870 million people in which trilateral trade between the two sides was only US $ 7.5 billion which was not according to trade potential.

He said Pakistan could take full advantage of the US $ three trillion trade market in ASEAN, for which a comprehensive plan was needed for future.

The Ambassador said Pakistan had an important geographical location which could connect Central Asian Countries with the world on the one hand and Western China on the other hand for which Gwadar Port was of utmost importance.

The Ambassador said ASEAN countries had FTAs with China, Japan and Korea.

He said ASEAN countries had US $ 600 billion annual trade with China, US $ 200 billion with Japan, US $ 150 billion with South Korea and US $ 300 billion with the United States, which added up to US $ 1.25 trillion in its annual trade volume.

He said Pacific Asia was also a major trade partner of ASEAN and global trade bloc with a worth of US $ 482 billion in annual trade opportunities.

Read more: Pakistani goods thrive at China-ASEAN Expo: Ambassador Haque

The Ambassador said ASEAN countries and Pakistan could take advantage of each other’s FTA partners and EU Generalized Schemes of Preferences (GSP- Plus) partners as a third party to enhance bilateral economic cooperation.

In the future, Gwadar Port would play an important role in the economic and trade integration of the world, adding, Pakistan could become a trade hub of the world. Indonesia was an important trading partner of Pakistan in ASEAN countries and the two countries were linked by historical, religious, cultural and economic ties.

He said 45 percent of the Muslim population hailed from ASEAN countries and also Buddhists who had many religious sites in Pakistan including Taxila and Swat could also play huge role for enhancing cultural ,economic and trade ties between both side.

He said religious tourism could be promoted in Pakistan and ASEAN countries which could also enhance economic cooperation between the two sides.

Responding to a question, he said Indonesia was keenly interested in investing in Pakistan and had greater potential in the near future.

Read more: China Pakistan Free Trade Agreement Opening bigger and brighter opportunities

He said Indonesia had made investments in Palm oil in Karachi which would enhance economic cooperation between the two countries, adding that in the near future while taking interest in investing in Faisalabad, steps would be taken for this in the near future.

Responding to a question about Indonesia’s rapid economic growth and economic reforms, he said Indonesia was the first to work on Ease of Doing Business (EODB) and business facilitation, which encouraged foreign investors.

The Ambassador said a number of achievements had been achieved following the World Bank’s Ease of Doing Business (EODB) targets and then there was the devolution of power in Indonesia for strengthening of the local body system, which led to a strong federation.

Discussing the cultural and educational ties between the two countries, he said 11 percent scholarships were awarded to Pakistani students this year, which was 52 percent of developing countries.

He said this year 60 Pakistani students went to Indonesian universities to study.

Responding to a question on strengthening cultural ties between the two countries, he said a lot of work was being done on both sides and handicrafts including Indonesian traditional embroidery, ‘Batik ‘ were being introduced in Pakistan.

Read more: Anti-export bias that is stifling Pakistan’s growth

Prior to Pakistan, Indonesia’s current ambassador to Pakistan, Adam Mulawarman Tugio had served in the United States and Europe, including the United Kingdom.

He earned a master’s degree in law from the United States, followed by the Foreign Service, and was director general of the North American Desk at the Indonesian Foreign Ministry.

Courtesy: APP