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FTA with EFTA states would benefit Indonesia: Etter

Jakarta Post | 24 October 2007

FTA with EFTA states would benefit Indonesia: Etter

Veeramalla Anjaiah, The Jakarta Post, Bern, Jakarta

A free trade agreement with the European Free Trade Association would be of benefit to Indonesia, Switzerland’s trade negotiator Ambassador Christian Etter says.

"Basically, the comprehensive free trade agreement will be for the benefit of both Indonesia and EFTA countries. The agreement will provide lower tariffs, trade concessions and easy market access to Indonesian goods and services in EFTA member states and vice versa," Ambassador Etter, the head of the special foreign economic service at Switzerland’s Federal Department of Economic Affairs, told The Jakarta Post recently at his office in Bern.

The European Free Trade Association (EFTA), which was established in 1960 to foster free trade as a means of achieving growth and prosperity among its member states, is made up of Switzerland, Norway, Iceland and Liechtenstein.

Etter said those who felt free trade agreements (FTAs) only benefited developed countries were wrong.

"It’s completely wrong to say that FTAs ... only benefit rich countries because agreements have to be acceptable to both parties. It has to be a win-win situation ...," Etter said.

Etter said to date the EFTA has signed FTAs with Canada, Chile, Croatia, Egypt, Israel, Jordan, South Korea, Lebanon, Macedonia, Mexico, Morocco, Palestine, Singapore, Tunisia, Turkey and the Southern African Customs Union.

"Some of the countries that signed FTAs with EFTA member states are developing countries like Egypt, Tunisia and Jordan and they are benefiting from it. I am sure Indonesia will also certainly benefit from the agreement," he said.

As it stands at the moment, trade between Indonesia and EFTA member states is not that significant.

Indonesia’s bilateral trade with EFTA member states reached US$656.83 million in 2006 from $560.39 million in 2005.

But these relatively low figures are expected to change once the free trade agreement is signed.

"Once this comprehensive free trade agreement is concluded, both trade and investment will increase tremendously. It will benefit Indonesia as well as EFTA member countries," Etter said.

"Switzerland and other EFTA states will work as excellent platforms (for Indonesian goods) to serve European markets. We have a central location in Europe," he said.

Indonesia and the EFTA agreed in 2005 to explore the possibility of developing a free trade agreement.

They appointed a Joint Study Group (JSG) in November 2005 to examine the feasibility of a comprehensive trade agreement between Indonesia and EFTA states.

The JSG last year produced a positive report in which it recommended that Indonesia and the EFTA would benefit from a comprehensive trade agreement.

According to the JSG, the agreement would be built on the principles of comprehensiveness, liberalization, trade facilitation and cooperation. It would also be consistent with World Trade Organization (WTO) agreements.

Minister of Trade Mari Elka Pangestu and her counterparts from the four EFTA member states discussed the JSG report in Davos in January this year and agreed to commence negotiations.

However, Indonesian representatives, including Mari, want the agreement proposal to be discussed thoroughly before it is signed.

"Mari Pangestu does not want the treaty to be signed in a hurry. She wants both the government and members of the private sector to see what benefits Indonesia will get from the agreement," Indonesian Ambassador to Switzerland Lucia H. Rustam told the Post in Bern recently.

"Businesspeople must also be involved in the whole process of negotiations," she said.

For this purpose, Indonesia and the EFTA have organized a joint working group meeting to be held in Yogyakarta on Thursday.

"Ambassador Etter will be leading the EFTA delegation and the Indonesian delegation will be headed by the Ministry of Trade’s director general for international trade cooperation Herry Sutanto at the meeting in Yogyakarta," the Swiss Embassy’s economic and political counselor Roman Busch said Tuesday.

Switzerland is the present chair of the EFTA.

Before attending the Yogyakarta meeting, Etter and his colleagues, who arrived in Jakarta on Tuesday, will visit the Indonesian Trade Expo in Jakarta and meet Mari and Indonesian Coordinating Minister for the Economy Boediono.

 source: Jakarta Post