The row over palm oil fuels the Swiss vote on Indonesia’s trade deal

ZURICH: Switzerland voted Sunday on a free trade pact with Indonesia, but the pact, which opens up a potentially large market, could be spoiled over the issue of palm oil imports.

Under the agreement, tariffs will be phased out from nearly all of the largest Swiss exports to the world’s fourth most populous country, while Switzerland will eliminate tariffs on Indonesian industrial products.

Anyone importing Indonesian palm oil must demonstrate that it meets certain environmental and social criteria.

But the controversy over palm oil and its sustainability has sparked enough anxiety in Switzerland to trigger a public vote.

Two separate polls in February estimated support for the deal at 52%, while 41% opposed it to 42%.

The agreement was signed in 2018 and approved by the Swiss parliament in 2019, but opponents have particularly criticized Bern’s move to reduce import duties on palm oil.

The deal contains exceptions for agricultural products, in particular to protect the production of sunflower oil and rapeseed oil in Switzerland.

For palm oil, customs duties will not be eliminated but will be reduced by between 20% and 40%.

These discounts will only be granted on a volume limited to 12,500 tons per year – and importers will need to demonstrate that the palm oil has been produced in a sustainable manner.

Bears, tigers and orangutans

Campaign posters in support of the EPA show a Swiss bear embracing a tiger, while posters opposing an orangutan show an orangutan clinging to a tree trunk surrounded by flames.

The agreement aims to strengthen relations with Indonesia, which despite its population is only the forty-fourth economic partner of Switzerland, and only the sixteenth of the largest export markets in Asia.

In 2020, Swiss exports to Indonesia amounted to only 498 million Swiss francs.

“This is the first time people have been asked to vote on a trade agreement,” Swiss President Guy Parmelin told a news conference about the vote.

He said Switzerland relied on about 30 such agreements, which were not usually a problem.

Nevertheless, Barmelin described the vote as an opportunity not only to respond to “legitimate concerns” but also to “formalize free trade.”

He said such deals are of “paramount” importance to an export-based economy like Switzerland, which lacks both significant natural resources and a large domestic market – and derives nearly half of its national income from abroad.

The president insisted that without an agreement with Indonesia, Swiss companies would be at a disadvantage, noting that the European Union is also negotiating a deal with Jakarta.

Indonesia is a growing economy with an increasingly rich middle class, which offers great potential for Swiss companies.

The government recommends a vote on the deal, highlighting restrictions in place to ensure the sustainability of imported palm oil.

Does not make sense

However, opponents of the agreement are not convinced.

Palm oil is a major ingredient in a wide range of products from food to cosmetics, but it has long been controversial.

Environmentalists say this is leading to deforestation, with vast tracts of rainforest cut down in recent decades to make way for farms.

“Palm oil is a symbolic product of free trade,” Willie Crittini, an organic vineyard who called the vote, told AFP.

He called for the formation of a committee composed of the Greens, Young Socialists, and agricultural organizations and unions.

In his opposition to the deal, he cited deforestation, human rights violations and the environment, as well as certification standards for palm oil itself.

“The first problem with free trade is that it is a tool to encourage consumption, and even excessive consumption,” he added.

Critigny questioned the “perversions” in a group focused on exports – at the expense of subsistence farming for domestic consumers.

“We are setting aside wastelands in Switzerland, and clearing forests elsewhere,” he said.

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