Jakarta - Indonesia and Pakistan are  to explore the possibility of concluding a Preferential Tariff Agreement (PTA) on two of their leading export commodities, namely  Indonesia's crude palm oil (CPO) and Pakistan's kino oranges, an  Indonesian cooking oil businessman said.

"Our problem is that in Pakistan  our CPO is priced 10 percent higher than Malaysian CPO because Malaysia already has a PTA with Pakistan, and we still don't have. We have already talked with the government to go to Pakistan together (to discuss conclusion of a  PTA)," Sahat Sinaga, chairman of the Indonesian Cooking Oil Producers (GIMNI), said here Thursday.

As a first step, GIMNI and the  Association of Indonesian  Crude Palm Oil Businessmen (GAPKI) would meet with business associations in Pakistan in June to explore the possibility of signing a PTA, he said. 

"Actually President Susilo Bambang Yudhoyono already talked about entering into a PTA when he visited Pakistan two years ago. So, eventually the government will also be involved in the negotiations but now we will first hold businesmen-to-businessmen talks and then their businessmen will persuade the Pakistani government," he said. 

Sinaga said Indonesia was in a good bargaining position to negotiate a lowering of Pakastan's tariff on its CPO and CPO derivative imports from Indonesia. The lower tariff would enable Indonesia to expand its CPO market in the South Asian country.

The CPO and CPO derivatives market in Pakistan  now stood at 1.8 million tons of which 45 percent was controlled by Indonesia and the rest by Malaysia.

Indonesia was now exporting 890,000 tons of CPO and CPO derivatives to Pakisan per year but Malaysia was selling much more. "So, if we don't pursue the export opportunities in Pakistan,  it will be hard for our downstream industry to find such opportunities elsewhere," Sinaga said.

- Source : Antara News Agency, 22 May 2008