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Pakistan Trade Relations With Indonesia & Malaysia
- 1. Pakistan Trade Relations With Indonesia& Malaysia
- 3. History • Muhammad AliJinnah who was at that time President of the All-India Muslim League - India and Pakistan were still not Independent nations encouraged Muslim soldiers serving in British Indian army to join hands with Indonesians their fight against the Dutch Imperial colonisation of Indonesia.
- 4. • Pakistan playeda vital role in support of Indonesian Muslims by sending troops to Indonesia and also by blocking the Dutch airline in Pakistan which was a mean to supply arms to Dutch armies in Indonesia.
- 5. • A largenumber of Pakistani Muslim soldiers died in the war with Netherlands in Indonesia • Indonesia got independent on 27 December 1949 and Mr. Sukarno who also led the independence movement of Indonesia became its first President. • In 1960 President Ayub Khan and President Sukarno also signed an agreement to send Indonesian students into Pakistani universities for education.
- 6. • In 1967when President Suharto took over, the Indonesia-Pakistan relations took a new turn, Indonesia started showing its slight inclination towards India. • when Pakistan faced the 1971 war with India, Indonesia preferred to take a non-partisan position into it and showed no support to Pakistan.
- 7. • While inthe 1965 war of Pakistan, Indonesia provided full support to Pakistan. • In the 1967-1968 agreements were signed to promote co-operation between radio and television corporations and news agencies.
- 8. • Both thecountries also agreed to establish direct shipping services and identified items for export and import from each other. • In 1972 Prime Minister Zulfiqar Ali Bhutto visited Indonesia which helped to build confidence between the two countries again.
- 9. • The PresidentMusharaf’s era is considered to be one of those periods in which the bonds were strengthened and the business relations between the countries were developed but it could not help Pakistan get ASEAN membership which Pakistan always tried to secure through Indonesian channel for its bearing an influential position amongst ASEAN countries.
- 10. Agreement • Pakistan-Indonesia PTAwas signed on February 3, 2012 after conclusion of prolonged negotiations, which were initiated in August 2002 • the Preferential Trade Agreement became operational in September 2013 after many rounds of negotiations.
- 11. • Under theagreement, Indonesia agreed to offer market access to Pakistan for 220 tariff lines on preferential rates. • The list included fresh fruits, cotton yarn, fabrics, readymade garments, fans, sports goods, leather goods and other industrial products.
- 12. • After PTA’simplementation, Indonesia will be able to increase exports of crude palm oil to Pakistan • whereas Pakistan can export fruits, value-added textiles, carpets, fabrics, leather goods, chemicals, surgical equipment and other items.
- 13. • Pakistan offeredIndonesia a total of 311 tariff lines on preferential rates. It included edible palm oil products, sugar confectionary, cocoa products, consumer goods, chemicals, tableware, kitchenware, rubber products, wood products, glassware products and electronic products.
- 14. • Pakistan hasoffered the same preferential treatment on edible palm oil products from Indonesia as provided to Malaysia under Pakistan Malaysia Free Trade Agreement.
- 15. Imports & Exports •Bilateral trade between Indonesia and Pakistan had grown to $1.65 billion in 2012 from $1 billion in 2008. Indonesia’s exports to Pakistan were $1.38 billion and imports from Pakistan were $273 million.
- 16. • In Pakistan’sexports, major growth was recorded in cotton/cotton fabrics and cereals, which grew by $20 million and $11.53 million respectively, while import of palm oil increased by $289.87 million. • Indonesia is the largest exporter of palm oil products to Pakistan.
- 17. SUGGESTION • Pakistani governmentshould also endeavor and take suitable measures to strengthen the ties with Indonesia and use its position to seek access to the ASEAN countries which can bring a drastic change in the trade activity of Pakistan resulting into the economic betterment of the country.
- 18. Pakistan Trade Relations WithMalaysia
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- 20. Background • On 31August 1957 the Federation of Malaysia became an independent nation and joined the Commonwealth. • On 5 October 1965, Pakistan severed their diplomatic ties with Malaysia when a Malaysian representative at the UN Security Council (to which Malaysia had been elected in 1965) had taken sides in the Indo-Pakistan war over Kashmir.
- 21. • Malaysia’s tradepolicy is to work towards creating a more liberalised and fair global trading environment. While Malaysia continues to accord high priority to the rule-based multilateral trading system under the World Trade Organisation (WTO), Malaysia is also pursuing regional and bilateral trading arrangements to complement the multilateral approach to trade liberalisation.
- 22. Pak-Malaysia Closer Economic Partnership Agreement(MPCEPA) • The Comprehensive Free Trade Agreement (FTA) for Closer Economic Partnership between Pakistan and Malaysia was approved by the Cabinet on 6th November, 2007. It was signed on 08-11-2007 at Kuala Lumpur Malaysia.
- 23. • The Agreementis a timely initiative by the Government of Pakistan to secure market for its export products in Malaysia and deepen the economic and trade relationship with an important member of the region.
- 24. • The MPCEPAencompasses liberalisation in trade in goods and services, investment, as well as bilateral technical cooperation and capacity building in areas such as sanitary and phytosanitary measures, intellectual property protection, construction, tourism, healthcare and telecommunications.
- 25. Areas covered under MPCEPAinclude: • General Provisions • Trade in Goods • Rules of Origin • Customs Procedures and Cooperation • Trade Remedies • Sanitary and Phytosanitary Measures • Technical Barriers to Trade • Trade in Services • Investment • Intellectual Property • Economic Cooperation • Dispute Settlement Mechanism • General Exceptions • Final Provisions
- 26. Exports and Imports •Exports to Malaysia from Pakistan comprise of Cotton Yarn, Fabric, Rice, Fruits, Vegetables, Sports Goods, Carpets, Fish and Fish preparations, Leather and Leather Products and Chemical etc. • Imports by Pakistan from Malaysia include Palm Oil and its Products, Electronic Items, Timber, Chemicals, Machinery, Animal and Vegetable Fats and Oil, Crude Rubber, Cork and Wood, Non- Ferrous Metals, Synthetic Yarn etc.
- 27. • Pakistan iscontinuously facing trade deficit even after FTA. Pakistan's Balance of Trade with Malaysia historically is in favour of Malaysia. In order to overcome the trading imbalance, there is need for diversifying trading products, besides Palm Oil. • Malaysia is a potential market for Pakistani Fruits and Vegetable like Mangoes, Onions and Potatoes.
- 28. • Pakistan isrich in human resources and there is great potential for Pakistan to export its skilled technical and labour force besides educated human resources to Malaysia. • Pakistan is an open economy with no restrictions where Malaysian firms and contractors can benefit from entering into Joint Ventures for establishing businesses.
- 29. • Pakistan andMalaysia have to find new areas of mutual co-operation and try to further boost bilateral trade and economic ties for getting full advantage of Pak-Malaysia Free Trade Agreement (FTA), which is still far from its existing potential.
- 30. Malaysia’s trade withPakistan expanded by 6.2% to RM5.01 billion (US$1.29 billion) from RM4.72 billion (US$1.44 billion) Total exports increased by 3.6% to RM4.12 billion (US$1.06 billion) from RM3.97 billion (US$1.21 billion) Total imports increased by 19.9% to RM891.3 million (US$230.0 million) as compared to RM743.6 million (US$226.4 million)
- 31. • In 2015Pakistan was Malaysia’s: • 31st largest trading partner • 19th largest export destination • 45th largest source of imports • SERVICES- The MPCEPA is a comprehensive agreement and it covers liberalization of Trade in Services as well. Pakistan offered maximum foreign equity participation of 60% in all sectors and there are no limitations on the number of Malaysian employed per organization.
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