A compass for the economic policy of all peoples: Self-sufficiency of the population in the first place

EFTA-Indonesia Free Trade Agreement and Swiss Agricultural Policy 22+

by Dr iur. Marianne Wüthrich

How should the smaller states or those less in the limelight navigate the globalised world and effectively represent their interests? In the last issue of Zeit-Fragen, we took a close look at the free trade agreement between the EFTA states and Indonesia. Trade agreements have been an important instrument of economic cooperation between sovereign states for centuries. But they must be win-win agreements from which everyone benefits, said Geneva organic winegrower Willy Cretegny in an interview: The focus should not be on the profits of the big corporations, but on taking social and ecological issues into account and on supporting tried and tested local standards. These goals are not sufficiently targeted by the agreement between EFTA and Indonesia (CEPA), on which we will vote on 7 March.
  This assessment is now reinforced by a widely supported statement from Indonesia. The open letter from civil society there to the Indonesian parliament gives us an insight into what concerns the people in their country and what objections they are raising against the trade agreement.
  In Switzerland, the planned AP 22+ agricultural policy is currently under parliamentary scrutiny. It is about ensuring the greatest possible self-sufficiency for the population and the preservation of Swiss farms.

Indonesian civil society says no to CEPA

The Coalition for Economic Justice is a network of fishermen, women, farmers, environmental activists, academics and other civil society groups. It has been following the European Free Trade Association (EFTA) negotiations with Indonesia since 2011 until the signing of the agreement1 on 16 December 2018, and has submitted a number of analyses, comments and submissions on this to the government.
  In early February, this coalition has now sent an open letter to the Indonesian Parliament asking it “to seriously consider not ratifying the Indonesia-EFTA CEPA Agreement.”2
  This is because it does not bring any economic benefits to Indonesia, but threatens “its abundant natural wealth and biodiversity”.
  The open letter lists four main points of criticism from an Indonesian perspective. It is good that we Swiss learn about this before we vote. In brief:

1. Palm oil: two sides of the coin
While Swiss farmers must fear that the agreement would lead to a disproportionate increase in the import of cheap palm oil from Indonesia, Indonesian civil society conversely points out that the quota of a maximum of 12,500 tonnes per year foreseen for Switzerland is a very small quantity for Indonesia – which exports over 30 million tonnes annually. Moreover, the EFTA requirements for the sustainability of palm oil production are so strict that it is practically hardly possible to meet them: “the exported palm oil should not be produced on slash-and-burn land, peatlands, free of water and air pollution, and it should guarantee the protection of the rights of smallholders and indigenous peoples. However, anyone who understands the palm oil industry in Indonesia is certainly aware of the fact that no Indonesian palm oil producer is free from these problems. This means that it is unlikely that Indonesia can export its palm oil to Switzerland by using the tariff reduction facility”.
  Here it is easy to see that the enormous difference in size between the two countries (Indonesia 1,905,000 km2, Switzerland 41,285 km2) alone can lead to completely different ideas of small or large quantities. Moreover, the high environmental protection standards of the rich industrialised countries are obviously hardly feasible for the small farmers in the newly industrialised country of Indonesia – while large landowners with their plantations might find the knack more easily. Just remember the 1970s and 1980s, when Swiss lakes were so polluted as a result of strong economic development that bathing had to be banned. It was not until later that the necessary sewage treatment plants were built, which Switzerland could afford financially. In Indonesia, it should actually be the local large corporations from the industrialised countries that take over the financing of environmental protection.

2. Access to medicines and the preservation of the farmer seed system would be made more difficult.
One of the objectives of the Agreement according to Art. 1.2 is (d) “to ensure adequate and effective protection of intellectual property rights in accordance with international standards”. Without being able to go into details here: The open letter refers to experiences with other free trade agreements, according to which especially the pharmaceutical and agrochemical industries benefit from such protective provisions, which in part went beyond the standards of the WTO. There is a fear that medicines will become more expensive for the Indonesian population.
  Another issue is the protection of plant varieties. The EFTA States are part of the “International Convention for the Protection of New Varieties of Plants”, referred to in the open letter by the English abbreviation “UPOV 1991”.3 This restrictive and inflexible plant variety protection system was initiated by the industrialised countries and is not suitable for Indonesia: “Agriculture in Indonesia is dominated by small and medium farmers, with small plots. The farmer seed system is the basis of livelihoods and food security in Indonesia, and it is the main way for small and medium scale farmers to access the seeds”. That is why Indonesia has not joined the agreement to date. If farmers had to comply with plant variety protection according to EFTA standards, their costs for seeds would rise sharply. This regulation would violate people’s right to food.

3. Prevention of cheaper generics for fertilisers and pesticides 
Similarly, the agreement with a ten-year data protection for fertilisers and pesticides in favour of foreign agricultural companies would prevent cheaper generics from being marketed in Indonesia. This is because their producers do not have access to the data of the original products, so they cannot then prove to the Indonesian Ministry of Agriculture that the active ingredients of their generics are equivalent to the original. Without a free trade agreement (FTA), the patent protection rules of the WTO apply, but the Indonesian authorities are freer to tolerate generics produced in the country.

4. Inundation of the fish market with Norwegian sea fish
Already at present, a lot of salmon and cod are imported from Norway, which are allegedly healthier than Indonesian fish. With the agreement, the influx of marine fish, especially from Norway, would increase: “If this agreement comes into force, more than 80 % of Norwegian exports to Indonesia will be free of import duty, including fishery products.” The impact: 2.7 million Indonesian fishermen would have to fear for their livelihoods, even though their fish is just as good.

Conclusion of the open letter: Self-sufficiency first

In conclusion, the authors of the open letter state: “Therefore, through this open letter, we – the civil society who are members of the organizations below4 – encourage a serious consideration of the Indonesian Parliament not to ratify Indonesia’s participation in the EFTA - Indonesia Free Trade Agreement which does not provide economic benefits. This agreement will in fact harm the majority of the Indonesian people, especially farmers and fisherfolks, and threaten to lose food and agricultural biodiversity in Indonesia”.
  This takes us back to Willy Cretegny’s call for trade agreements to take into account social and environmental issues and to endorse proven local standards. Especially in the area of raw material extraction, it is of great importance that the supply of people with essential commodities comes first. This is best achieved everywhere in the world through small-scale, local self-sufficiency, as research in the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) has shown.
  For us Swiss, this means on the one hand: supporting our own agriculture and commercial SMEs in everyday life and in referendums. But it also means looking beyond one’s own nose and taking note of what Indonesian civil society, for example, has to say about the planned free trade agreement — simply take note.

Halt for Swiss Agricultural Policy 22+!

In Switzerland, a struggle over the direction of agricultural policy has been underway for years. Despite great differences to Indonesia in geographical, social and economic terms, as well as in the size of the territories and the population, the same applies in Switzerland as everywhere else in the world: In order for people to feel safe and at home in the country in which they live, they need first and foremost the certainty that the highest possible level of self-sufficiency is also ensured for the future. A one-sided profit-oriented view, as represented by some exponents of large corporations, is also repugnant in essence to the majority of people in our country.
  Unfortunately, the majority in the Swiss parliament tends to support free trade agreements that are detrimental to our farmers. The next one against which we will have to hitch up our knickers would have even more serious implications for Swiss agriculture than the one with Indonesia: the planned FTA with the Mercosur countries Argentina, Brazil, Paraguay and Uruguay, signed in Buenos Aires in August 2019, would exempt from customs duty large quotas of food products that are also produced in Switzerland.5
  On the other hand, the Council of States has now fortunately and surprisingly suspended the controversial Agricultural Policy 2022-2025 (AP 22+) in the winter session 2020 by 28 votes to 16. This means a halt for one to two years “until the Federal Council has presented a report on the future direction of agricultural policy”.6 A real chore for President Guy Parmelin and his administration team! Accordingly, the head of the Federal Department of Economic Affairs, Education and Research reacted angrily before the Council of States: for years, this project had been worked out in cooperation with the cantons, parties, the farmers’ association and the other organisations concerned. “And now, all of a sudden, you think you have to reheat the whole thing and start from scratch again. [...] I don’t think working like this is serious.” – I, on the other hand, find this decision very courageous from the Council of States!
  On 2 February the Economic Affairs and Taxation Committee of the National Council (EATC-N) has now joined the Council of States by 14 to 11 votes: it recommends its Council to suspend AP22+. The National Council will decide on this in the spring session (on 16 March).

Council of States backs farmers and self-sufficiency

This is not the place to present the agricultural policy planned by the federal administration or the entire objections to it by the Council of States. Here are briefly the most important arguments of the Council of States for a halt, summarised by the Economic Commission of the National Council in its media release of 2 February.
  With AP 22+, “the degree of self-sufficiency would decrease, which would contradict the goal of Article 104a of the Federal Constitution; [...] the income of the agricultural sector would decrease, valuable cultivated land would be lost, [food] imports would increase, the administrative burden for farmers would increase.” Parliament had already adopted the necessary measures to reduce pesticides and nutrients, so no further regulations were necessary.7
  For once, all members of the Council of States from the Centre Group (CVP) and the SVP, as well as the majority of the FDP, agreed that the strict ecological regulations envisaged by AP22+ would have too restrictive consequences for farm(ing) enterprises. It should be noted that Swiss law already contains very strict ecological standards and a high level of animal welfare.
  On the other hand, the Council of States accepted the direct federal payments for agriculture (around 13,5 billion Swiss francs for the next four years) without reservations by 43 votes to 0 – a sign of appreciation from all political parties towards farming families – and the overall vote at the end was also unanimous.8  •

1 Comprehensive Economic Cooperation Agreement (CEPA). Concluded in Jakarta on 16 December 2018
2 Open Letter of Civil Society to the Indonesian Parliament. EFTA-Indonesia Comprehensive Economic Cooperation Agreement (Cepa) (Letter from 8 February 2021)
3 International Convention for the Protection of New Varieties of Plants of December 2, 1961, revised at Geneva on November 10, 1972, October 23, 1978, and March 19, 1991 (International Union for the Protection of New Varieties of Plants; UPOV 1991).
4 Signatories are the following 16 organisations: Indonesia for Global Justice; Solidaritas Perempuan (Women’s Solidarity of Human Rights); The People’s Coalition for Fisheries Justice (KIARA); Federasi Perjuangan Buruh Indonesia (FPBI); Kabupaten Asahan (Federation of Indonesian Worker’s Struggle); FIAN Indonesia; GRAIN; Serikat Petani Indonesia (Indonesian Peasant Union – SPI); Koalisi Rakyat untuk Hak Atas Air (People’s Coaltion for the Right to Water KRUHA); The Institute for Policy Research and Advocacy (ELSAM); Universitas Indonesia (Universitas Indonesia – UI); Kajian Wilayah Eropa – Universitas Indonesia (Center for European Studies – University of Indonesia); Palangkaraya Ecological and Human Rights Studies (Progress); IndoWater CoP; Forum Benih Lokal Berdaulat (Organic Heirloom Seed Forum); Perkumpulan Kediri Bersama Rakyat (The Association of Kediri together with the People – KIBAR); Komisi Justice Peace and Integrity of Creation GKPT
5 “EFTA-Mercosur free trade agreement: agreement on substance”. Federal Council media release, 24 August 2019.
6 20.022 Agricultural policy from 2022 (AP 2022 plus). Council of States debate on 14 December 2020.
7 EATC-N. “AP22+: Back to field one”. Media release of 2 February 2021
8 20.022 Agricultural policy from 2022 (AP 2022 plus). Council of States debate on 14 December 2020.

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