The Preferential Trade Agreement (PTA) between Pakistan and Indonesia is under progress and would be finalised by the end of this year, which would help harness trade potential between the two countries. Ambassador of Republic of Indonesia, Ishaq Latuconsina disclosed this while talking to the office bearers and executive committee members of the Lahore Chamber of Commerce and Industry (LCCI) here on Friday.
The negotiations on PTA were well underway and the sixth and final round of talks would be held in Jakarata on December 29, while the fifth round of talks on the subject had already been held in Islamabad, he added. Latuconsina also stressed the need for exchange of subject specialists and sector specific experts so that both the countries might be able to learn more and more from each other's experiences.
He said that Pakistan and Indonesia must share their experiences in the larger interests of the business community. The LCCI President and the Indonesian ambassador also discussed modalities to hold single country exhibitions in each other's country so that the bilateral trade volume could be increased.
Speaking on the occasion, LCCI President Zafar Iqbal Chaudhry said that Pakistan and Indonesia were the two most populous countries of Muslim Ummah. These two countries together have a population of over 410 million and constitute about 25 percent of the total Muslim population of the world. Both the countries are bonded together by old historical links and enjoy cordial relations based on commonality of religion.
He said that although the trade between Pakistan and Indonesia had been gradually growing from $645.4 million in 2004-2005 to $1254 million in 2008 but it was still at a very low level in view of the size of the markets of the two countries.
Pakistan's trade deficit with Indonesia, which was $773.7 million during 2006-07, had increased to over $1100 million owing to a faster increase in import from Indonesia compared with exports to Indonesia. Indonesia's import from Pakistan should be increase to create a win-win situation for both the countries.
The LCCI President said that a lot of progress could be made on trade front through identification of new tradable items between the two countries. Indonesia could export rubber, rubber products, accessories of motor vehicles to Pakistan while Pakistan has a comparative advantage in textile, surgical instruments, leather products, sports goods, fruits, vegetables and rice which could be exported to Indonesia on a larger scale.
He also said that the objective of enhancing bilateral trade could be achieved through active engagement of the chambers of commerce and industry of the two countries, frequent exchange of economic and trade delegations to identify the areas of mutual interest, arranging of single country exhibitions and socio-cultural programmes.
The establishment of a joint business forum comprising representatives of chambers of commerce and industry of the two countries with enhanced business-to-business contacts could be helpful in giving much-needed boost to the bilateral trade, he added. The LCCI President said, "There is a lot of scope for Indonesia for making investment in Pakistan because Indonesia has a fairly advanced petro-chemical, rubber, plywood, telecommunication and tourism industry. Indonesia could make direct investment in these sectors and could also enter into joint ventures with the Pakistani counterparts."
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