History, Agreements, Import & Exports

1. Pakistan Trade
Relations With
Indonesia & Malaysia

3. History
• Muhammad Ali Jinnah 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 played a 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 large number 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 1967 when 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 in the 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 the countries 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 President Musharaf’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 PTA was 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 the agreement, 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’s implementation, 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 offered Indonesia 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 has offered 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’s exports, 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 government should 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 With Malaysia

19. 1st Malaysian Politician

20. Background
• On 31 August 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 trade policy 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 Agreement is 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 MPCEPA encompasses 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
MPCEPA include:
• 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 is continuously 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 is rich 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 and Malaysia 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 with Pakistan 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 2015 Pakistan 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.

32. Thank You !