Switzerland will allows and give an exemption for import duty of crude palm oil exports from Indonesia - Photo by Astra Agro Lestari Office

JAKARTA (TheInsiderStories) – In the midst of a dispute over the palm oil issues with the European Union (EU), Switzerland sending a good news to Indonesia. The partnering country will allows and give an exemption for import duty of crude palm oil (CPO) exports from Indonesia.

This policy was taken by the Swiss government after taking a referendum through voting by the public and decided at the parliamentary level while still considering input from various stakeholders such as non-governmental organizations, global media reported on Sunday (03/07). As a result, 51.7 percent of the citizens agreed to the trade agreement between both countries.

President of Swiss, Guy Parmelin, said the free trade agreement was one of the supports from the countries in the Blue Continent to make Indonesia becomes the largest CPO exporter in the world. Moreover, palm oil is one of the raw materials for the processing industry in Switzerland.

Recently, the world’ biggest palm oil producer and Malaysia has asked the dispute settlement body of the World Trade Organization (WTO) to establish a panel to examine the EU Renewable Energy Directive (RED II), which it claims discriminates against biofuels produced from palm oil. The use of renewable fuels in transport will rise to a 14 percent share by 2030 from 10 percent in 2020 under the regulation.

The block sets a limit of 7 percent for biofuels made from other vegetable oils and food crops such as rapeseed and soybean. But Indonesia argued that the science behind it lacks rigor and transparency. The EU palm oil ban has yet to impact Indonesia’ biodiesel and palm oil exports, as its implementation does not kick in until 2021.

Since last year, Indonesian government prepared a lawsuit against the EU over the dispute. Vice trade minister, Jerry Sambuaga, the lawsuit was filed by the government to WTO, because the policy was considered discriminating Indonesian palm oil or biofuel products. The consultation process was carried out by Indonesia and the EU on Feb. 19, 2020 at WTO headquarters in Geneva.

The EU’ ambassador to Indonesia, Vincent Piket, said outside of the dispute process at the WTO, the block has formed a working group with producing countries, including Indonesia, to negotiate issues surrounding the sustainability of the palm oil industry, which has been an obstacle to trade in this product for some time.

He also reported, during the first 10 months of 2020, Indonesian palm oil exports to the zones increased by 27 percent in value and 10 percent by volume.

Written by Editorial Staff, Email: theinsiderstories@gmail.com