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Swiss Voters Narrowly Back Palm Oil Deal With Indonesia

People hold banners during a protest hours after Swiss voters accepted an initiative, the so-called anti-burqa vote, to ban full facial coverings in public places in Bern on March 7, 2021. (Agence France Presse/Fabrice Coffrini)

Swiss voters on Sunday narrowly backed a free trade agreement with Indonesia that would abolish duties on industrial products including palm oil.

The proposal narrowly gained approval with 51.7 percent support in a nationwide referendum, AFP reported. Voters also backed a ban on full face coverings in public places, which would include Islamic full-face veils or burqa.

Under the trade deal, tariffs would be gradually removed from almost all of Switzerland's biggest exports to the world's fourth most populous country, while the Swiss would abolish duties on Indonesian industrial products.

Importers of Indonesian palm oil however must prove that it meets 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 Bern's move to reduce import duties on palm oil. The deal contains exceptions for agricultural products, notably to protect Switzerland's sunflower and rapeseed oil production. For palm oil, customs duties will not be removed but instead reduced by between 20 percent to 40 percent. reported that 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).

Swiss President Guy Parmelin, who also holds the economy portfolio, said 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, quoted by Parmelin hinted that future trade deals may also incorporate sustainability clauses, but stressed that each agreement is unique with its own set of challenges.

The palm oil sector in Indonesia – which has suffered economic policy setbacks in Europe – welcomed the decision.

“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).


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