Free trade agreement signed with Indonesia

Bern, 16.12.2018 - On 16 December Federal Councillor Johann N. Schneider-Ammann, the economics minister of Liechtenstein and representatives of Iceland and Norway signed a free trade agreement with Indonesia’s minister for trade, Enggartiasto Lukita. Under the agreement, 98 percent of Swiss exports to Indonesia, the fourth most populous country in the world, will be exempt from customs duties over the coming years. Technical barriers to trade will be removed, market access for Swiss service providers made easier and bilateral economic relations in general improved. The EFTA states will collectively become Indonesia’s primary trading partner in Europe.

The agreement, drawn up by the parties in early November, was signed in the presence of economic and political representatives of the EFTA states and Indonesia. These included the presidents of the economic umbrella association economiesuisse and of scienceindustries, which represents the chemical and pharmaceutical industry in Switzerland. Representatives of the Swiss-Indonesian Chamber of Commerce, which was set up in August 2018, were also present.

The agreement with Indonesia is comprehensive in scope. It improves market access and legal certainty for trade in goods (industrial and agricultural products) and services. It also includes provisions on investment, the protection of intellectual property, the reduction of non-tariff barriers to trade, including sanitary and phytosanitary measures, on competition, trade facilitation, public procurement, trade and sustainable development, and economic cooperation.

Key elements of the agreement include free access to the Indonesian market for Swiss industrial products and selected agricultural products and rules on trading Indonesian palm oil. Switzerland grants certain market-compatible tariff rebates for this product, applying quotas which do not jeopardise domestic production of vegetable oils. The agreement also requires the parties to comply with multilateral conventions, including labour and environmental conventions, and contains a specific provision to ensure the sustainable production of the palm oil traded. In a supplementary agreement on intellectual property, Indonesia undertakes to amend its patent protection legislation to comply with its international obligations.

Parliament will commence the process of approving the agreement immediately, so that Switzerland can ratify it by 2020 at the latest.

Indonesia is Switzerland’s main economic partner in South East Asia, with a trade volume of around CHF 830 million a year (not including precious metals, precious and semi-precious stones, art works and antiques). Direct Swiss capital investments in Indonesia amounted CHF 6,9 billion at the end of 2016, according to the Swiss National Bank.

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Federal Department of Economic Affairs, Education and Research

Last modification 14.05.2024

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