Pakistan-Indonesia accord

The signing of the Framework Agreement on Comprehensive Economic Partnership (FACEP) between Pakistan and Indonesia marks an important step towards enhancing the existing level of economic co-operation between the two brotherly countries.
The two sides have also signed a pact on counter-terrorism, which is reflective of their shared perception on terrorism being a grave threat to international peace and security.
A joint statement issued at the conclusion of the talks between visiting Indonesian President Susilo Bambang Yudhoyono and President Musharraf expressed the resolve to sign a free trade agreement (FTA) soon.
As a first step towards achieving this goal, the two countries have decided to hammer out a preferential trade agreement (PTA) in order to increase the existing volume of bilateral trade, commensurate with their close political ties.
The Indonesian President lauded President Musharraf's vision of "enlightened moderation." The two leaders also discussed the on-going efforts aimed at reforming the OIC, and turning this crucial grouping into a vibrant forum, to enable it to play its role more effectively in the post-9/11 global environment. The talks in Islamabad brought out complete identity of perception on the need to jointly counter the menace of terrorism.
The two leaders condemned terrorism in all its forms and manifestations. Pakistan and Indonesia have already agreed to move fast on negotiating tariff concessions to each other under the Comprehensive Economic Partnership (CEP), a conceptual framework approved by the two governments during the visit of Indonesian Minister for Commerce to Islamabad in August 2003.
It should also be mentioned here that the Asia-Africa Conference held in Bandung in April this year had provided an opportunity to President Musharraf and his Indonesian counterpart to hold talks on fashioning measures for further strengthening socio-political and economic co-operation between the two countries, besides imparting a powerful fillip to bilateral trade.
Jakarta has played a seminal role in Pakistan's membership of the ASEAN Regional Forum. Being an important member of ASEAN, and enjoying a highly respectable position in the South-East Asian region, Indonesia can help Pakistan gain access to new markets in the region.
However, the dichotomy between the two countries' close political ties and the inadequacy of their bilateral trade needs to be corrected to put the relationship on a firmer, more productive footing. According to available figures, in 2000-01 Pakistan's trade with Indonesia was merely $134.4 million in exports and $161.7 million in imports, while in 2002-03 the volume of exports declined to $73.3 million and the imports went up to $257.3 million.
The figures can be said to mirror the general pattern of bilateral trade in the past, which cannot be termed encouraging at all. However, ideal conditions do exist for expanding economic ties and launching joint projects by Pakistan and Indonesia.
For instance, Indonesian entrepreneurs can be provided incentives to invest in Pakistan's oil and gas sector. Similarly, the banking sector offers another mutually beneficial opening to the two countries. Pakistan and Indonesia have already agreed to hold consultations on any trade disputes - dumping, subsidy and safeguard measures - prior to invoking any mechanism under disputes settlement body of the WTO. They have also agreed to exchange information and trade delegations.
Further, an agreement on linking up FPCCI and TPOs of both the countries has been firmed up. Thus President Yudhoyono's visit may turn out to be a watershed in Pakistan-Indonesia trade relations.