The Palm Scribe

EFTA signs Free Trade Agreement with Indonesia

Switzerland, Liechtenstein, Iceland, and Norway have signed a free trade agreement with Indonesia, the world’s largest supplier of palm oil, in a deal that includes rules for Indonesian palm oil, a number of reports said.

The agreement, still has to be ratified by each country by 2020 at the latest, was signed in Jakarta on Sunday (16/12) and made the four European members of The European Free Trade Association (EFTA) Indonesia’s first trade partners in Europe,  report of the Swiss news agency Keystone-SDA said.

In addition to market access, the agreement guarantees legal certainty, the protection of intellectual property and the dismantling of non-tariff barriers to trade, according to the news agency. For palm oil, Switzerland grants tariff discounts for quotas so that domestic vegetable oil production is not endangered.

The agreement also contains obligations to comply with multilateral conventions, particularly in the areas of labor and the environment, as well as a specific provision designed to ensure sustainable production of palm oil.

Indonesia’s trade minister, Enggartiasto Lukita said that the negotiations took eight years to complete and added that there was a strong reticence against Indonesian palm oil, the Kompas daily reported.

Lukita said that it was Swiss Economics Minister Johann Schneider-Ammann who helped bridge the differences.

“I said that our journey has been long, both sides should be mutually benefiting. If you do not open up to our palm oil, then let us just forget what we have done, this will be useless,” Lukita was quoted as saying by Kompas.

The minister said that access for Indonesian palm oil was important because there were 16.5 million people whose livelihood depended on the palm oil industry.

Indonesia is the world’s largest producer, exporter and consumer of palm oil, followed by Malaysia. It is also the largest greenhouse gas emitter after China and the United States.

Palm oil is used in a wide array of consumer goods from makeup to snacks. The industry is linked to deforestation, habitat degradation — especially for orangutans,  climate change, animal cruelty and indigenous rights abuses. Land and forests must be cleared for the development of the oil palm plantations in Indonesia and other countries where it is produced.

Indonesia and Malaysia have argued that palm oil only used four percent of the world’s cultivated land and much less land than other vegetable oil producing crops. They also argued that as producers, they were working hard to assure the sustainability of the entire palm oil supply chain.

“How much forests have been razzed, deforested for rapeseed oil? For all the other vegetable oils. I will agree if we use the same parameters for all in taking a standard in this world, please do, but do not be only specific to palm oil,” Lukita was quoted as saying by Republika daily on Monday (17/12).

The Swiss news agency report said that Switzerland imports between 30,000 and 40,000 tonnes of palm oil every year. Between 80 percent to 90 percent of these imports are destined for the food industry and are used to make biscuits, pasta, and even instant soup.

Share This