ZURICH, Switzerland — Voters in Switzerland have given the green light to a free trade deal with Indonesia with a small majority of 51.6%.
The vote was closer than expected after Zurich (the canton with the most voters) showed its hand last, sealing the fate of the referendum. The main pockets of resistance were the French-speaking cantons such as Geneva (where a lot of commodity firms are based) and Vaud (home of the headquarters of Swiss food giant Nestlé).
Palm oil was at the heart of the referendum on the free trade agreement between Switzerland and Palm oil agreement between Switzerland and Indonesia. The deal aims to facilitate trade with the South-East Asian country and will now remove customs duties on Swiss exports like cheese, pharmaceutical products, and watches.
Indonesia, for its part, will be able to sell its industrial products on the Swiss market duty-free. Tariff reductions are also planned for certain agricultural products, in particular palm oil, of which Indonesia is the world’s largest producer and exporter.
Those backing the referendum included opponents of globalization, left-wing parties and some non-governmental organisations (NGOs). Their arguments against the free trade deal were mainly environmental, with opponents pointing out that palm oil cultivation is linked to the destruction of the rainforest. Supporters of the deal, on the other hand, argued that imported palm oil will have to meet certain environmental standards in order to qualify for a tariff reduction.
Swiss President Guy Parmelin, who also holds the economy portfolio, said that the Swiss people felt the trade deal was correct and balanced. He added that the concerns of the opponents will be taken into account and Switzerland will support Indonesia in producing sustainable palm oil. “This vote is not a choice of the economy over human rights and the environment,” he said. Parmelin hinted that future trade deals may also incorporate sustainability clauses, but stressed that each agreement is unique with its own set of challenges.
Along with the Swiss government, the palm oil sector in Indonesia – which has suffered economic policy setbacks in Europe – also heaved a sigh of relief.
“We are grateful for the outcome of today’s vote. The trade deal is a win-win for the palm oil industry, for Indonesia, for Switzerland, and for all EFTA nations, and will bring positive benefits for Swiss consumers and exporters, and Indonesian small farmers. The Swiss vote affirmed that Indonesian palm oil is sustainable,” said a spokesperson for the Indonesian Palm Oil Association (GAPKI). The industry body hopes that the result will help convince other European countries that palm oil from Indonesia is “best-in-class” when it comes to sustainability. Indonesia is fighting a European Union ban on the use of palm oil as biofuel by 2021.
The slim margin of victory was a surprise to some. Monika Rühl, director of the Swiss business federation Economiesuisse, was hoping for an emphatic victory for the free trade deal. “We expected a clear-cut yes,” she told Swiss public broadcaster RTS on Sunday. “The concerns of the population must be taken very seriously,” she added, with reference to the protection of human rights and the environment.
Her thoughts were echoed by parliamentarian Simone de Montmollin of the Radical-Liberal Party, who had campaigned for the free trade deal. “This is a signal that an economic agreement cannot be made to the detriment of all the fundamental principles of respect for the environment and social rights,” she said.
Fellow parliamentarian Fabio Regazzi of the Centre, who was also part of the committee for the free trade deal, agreed that forests and labour rights were important. However, he said that the Swiss must bear in mind that eventually it is an economic agreement between two countries. It is not possible “to impose everything you want”, he said of the opponents. Regazzi also regretted that the campaign had focused on the issue of palm oil, which represents only a very small part of the agreement. The many benefits that the agreement brings to small and medium-sized enterprises were absent from the debate, according to him.
Supporters of the referendum against the trade agreement had mixed emotions.
“I am not at all disappointed” by the result, said the maverick initiator of the referendum Willy Cretegny, an organic winegrower. “We had already won before the results because we opened the debate,” he said.
Both Cretegny and the Green Party (via parliamentary representative Léonore Porchet) expressed their determination to target other free trade deals in the pipeline, most notably the one with Mercosur countries (Brazil, Argentina, Uruguay and Paraguay).
The president of the Young Socialists Ronja Jansen expressed her disappointment at the result. “It was clear from the start that it would be a David versus Goliath fight,” she told Swiss public broadcaster SRF.
Swiss NGOs, especially those that did not take a side in the vote, said the outcome demonstrated that a change in the nature of economic agreements was necessary. Alliance Sud, the Society for Threatened Peoples and Public Eye welcomed the interest shown in the debate on Swiss trade policy.