The controversy surrounding the Indonesian palm oil import and its sustainability raised enough concern in Switzerland to prompt a public vote on the deal.
But the deal passed the public approval test with 51.7 percent of the vote, with a 51 percent turnout. Supporters expressed relief at the result, but said they would have to be more sensitive to environmental issues in any future vote on trade deals.
Under the agreement, tariffs will be phased out of almost all major Swiss exports to Indonesia, while Switzerland will remove tariffs on Indonesian industrial products.
Anyone who imports palm oil from Indonesia must demonstrate that they meet certain environmental and social standards.
The agreement was signed in 2018 and approved by the Swiss parliament in 2019, but opponents were especially critical of the Berne move to lower palm oil import tariffs and won a public vote on the agreement.
Palm oil is a key ingredient in a wide range of products, from food to cosmetics, but it has been controversial for a long time.
Environmentalists say it drives deforestation, with large swaths of rainforest cut down in recent decades to make way for plantations.
Bears, tigers and orangutans
The agreement contains exceptions for agricultural products, in particular to protect Swiss sunflower and rapeseed oil production.
In the case of palm oil, customs duties will not be eliminated, but will be reduced by between 20 and 40 percent, in a volume limited to 12,500 tons per year.
Campaign posters supporting the agreement showed a Swiss bear hugging an Indonesian tiger to symbolize the partnership, while those against it showed an orangutan and a baby clinging to a tree trunk, surrounded by flames.
The agreement aims to boost ties with Indonesia, which despite its population is only Switzerland’s 44th largest economic partner and Asia’s 16th largest export market.
In 2020, Swiss exports to Indonesia amounted to just 498 million Swiss francs ($ 540 million, 450 million euros).
Switzerland is an export-driven economy, deriving almost half of its national income from abroad. Indonesia is a growing economy with an increasingly wealthy middle class, offering considerable potential for Swiss companies.
The Swiss government urged a Yes vote and President Guy Parmelin had insisted that without the agreement Swiss companies would have been at a disadvantage, noting that the European Union is negotiating an agreement with Jakarta.
Rethink future offers
Swissmem, the national association representing the engineering industry, said the agreement “would greatly facilitate Swiss companies’ access to this promising market.”
It was the first time that Swiss voters had directly expressed their opinion on a free trade agreement.
Organic winegrower Willy Cretegny, who led the campaign for a vote, told RTS radio that he was not disappointed by the defeat because “the debate on the principle of free trade” was already open.
Green legislator Leonore Porchet said her party would campaign strongly against the next pending agreement with South America’s Mercosur trade bloc.
Lawmaker Fabio Regazzi, who spearheaded the cross-party Yes campaigns, said the adjusted result was sobering.
In the future, movements in favor of trade agreements would have to “be more sensitive” to environmental problems and working conditions, he told the ATS news agency.
George is Digismak’s reported cum editor with 13 years of experience in Journalism