Context
Furthering its outreach in the Pacific, Pakistan’s preferential free trade agreement with Indonesia is finally making progress. Comments made earlier this month by Indonesia’s Ambassador to Pakistan, Burhan Muhammad, indicated the agreement would help open market access for Pakistan to ASEAN (Association of Southeast Nations).
Bilateral trade between the two countries increased from $1 billion in 2008 to $1.65 billion in 2012, and is expected to reach a target of $2 billion. Pakistan’s exports presently include cotton and cereal. With the preferential agreement, exports of fruits, textiles, carpets, fabrics, leather goods, chemicals, and surgical equipment are likely to increase.
On the other hand, in addition to exporting palm oil, Indonesia is interested in making investments in the infrastructure sector, including providing expertise in exploiting Pakistan’s coal reserves. Moreover, Indonesia is also keen in promoting military ties with Pakistan.
