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The Jakarta Post - 27 May 2022
Indonesia, Switzerland sign bilateral investment treaty
Indonesia and Switzerland have signed an investment promotion and protection agreement (P4M) to boost trade and investment between the two countries.
The scope of the P4M, which took seven rounds of negotiations to conclude, includes guarantees on several issues, including non-discriminatory treatment, freedom to transfer or repatriate and options to solve disputes through international arbitration.
Investment Minister Bahlil Lahadalia said the agreement was made to boost investments in both countries by providing legal protection and business certainty for Indonesian and Swiss investors.
“We hope this collaboration will increase Indonesia’s competitiveness in attracting investment from Switzerland to priority sectors in Indonesia and open opportunities for national businesses to invest in Switzerland as well,” he said at the signing ceremony, which took place at the World Economic Forum (WEF) Annual Meeting 2022 in Davos, Switzerland, on Tuesday.
Last year, Switzerland was Indonesia’s 10th largest foreign investor with an investment value of US$599.8 million from 281 projects in various sectors, including food and beverages, chemicals and pharmaceuticals, and forestry and fisheries, according to Investment Ministry data.
“We hope that this cooperation can be well established and produce a positive impact for both parties,” said Swiss Federal Councillor Guy Parmelin during the ceremony.
Trade Minister Muhammad Lutfi and Indonesian Chamber of Commerce and Industry (Kadin) chairman Arsjad Rasjid also attended Tuesday’s signing ceremony.
Kadin and Swiss counterpart, Economiesuisse, launched that day a Trade and Sustainability Council to facilitate exchanges between companies on sustainability projects and initiatives in the private sector.
The newly signed P4M will replace the previous P4M, signed in 1974, that ended in 2016. The new agreement will also complement the Indonesia-European Free Trade Association (EFTA) comprehensive economic partnership agreement (CEPA), signed in 2018, to which Indonesia and Switzerland are parties.
The P4M, also known as a bilateral investment treaty (BIT), applies to both Indonesia and Switzerland but excludes lawsuits or disputes that arise before the new P4M takes effect, and does not apply to government procurement, subsidies or grants provided by the states.
ASEAN member states including Vietnam, Thailand, Malaysia and Singapore also have a P4M with Switzerland.