June 15, 2006	Thursday	Jumadi-ul-Awwal 18, 1427

ISLAMABAD, June 14: Indonesia has refused to accept Pakistan's proposal seeking preferential market access for its agriculture products under the proposed preferential trade agreement (PTA).

A senior official told Dawn that the proposal was formally discussed during the technical level meeting of senior officials of the two countries, which concluded here on Wednesday.

Islamabad had requested the Indonesian side for inclusion of agriculture products including kinno (citrus fruit) in the preferential lists for reduction of customs duty, the official said and added Indonesian trade officials have flatly refused the proposal for consideration under the PTA.

The proposal was dropped on the plea that Indonesia itself wanted to provide due protection to its agriculture sector, particularly for production of citrus fruit in the country.

Interestingly, Indonesia has reduced customs duty to five per cent on import of kinno from China but duty on import of kinno from Pakistan stood at 25 per cent.

Indonesia was one of the major markets for Pakistan's export of kinno, which alone consumed around 40 per cent of Pakistan's export of the commodity.

According to the official, because of this high duty as compared to China, Pakistan's export of kinno to Indonesia has dropped tremendously during the current fiscal year.

This shows the seriousness of the Indonesian authorities, which were reluctant to give market access to Pakistan's potential farm product, which Jakarta has already offered to other countries.

According to the official, Indonesia was seeking cutting of customs duty around 20 per cent on import of palm oil under the proposed PTA. "This is not possible because Pakistan also imports palm oil from other countries and soybean from the United States," the official added.

According to the official, the Indonesian side also handed over a long list of items for consideration of duty reduction under the proposed agreement.

Before the next meeting to be held in Jakarta, the official said the lists would be discussed with the relevant stakeholders for finalisation.

He said that currently Pakistan has a huge trade deficit with Indonesia. If products of Pakistan's interests were not included in the PTA, then there was no need for any preferential agreement, which would further increase imports from Indonesia while Pakistan's exports to that country remained stagnant during the last four years.