Indonesia should not be negligent in coping with the global trend of trade protectionism. One example of protectionism is the trade barriers imposed by several countries on Indonesia’s crude palm oil.
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Kompas/Raditya Helabumi
Farmers collect harvested oil palm fruits on Tuesday (14/3/2018) at a plantation in Namang village, Namang district, Central Bangka regency, Bangka Belitung.
Indonesia should not be negligent in coping with the global trend of trade protectionism. The ability to negotiate is very crucial.
One example of protectionism is the trade barriers imposed by several countries on Indonesia’s crude palm oil (CPO). The barrier is not in the form of a tariff barrier because the World Trade Organization (WTO) bans such practice.
The non-tariff barrier in place is varied, from objective to protecting the domestic product and workers because they are uncompetitive.
The reasons are, among others, the requirements for hygiene and sanitation for fresh food products. Some also use “protection from terrorism” reasons like what the United States does. There is also a reason “to protect culture and farmers”, such as in Japan, to counter the import of rice. There is also the dumping reason, selling domestic subsidized products to the international market, which leads to unhealthy trade competition.
The attempt to block Indonesia’s CPO export has been in place for two decades. The rejection was voiced by nongovernmental organizations, association of vegetable oil producers or legislative members that represent the producers.
However, in less than 10 years, the trend in many countries to protect their domestic market has increased amid globalization.
The trend to hamper the import of goods cannot be disassociated from the fact that globalization and economic liberalization results in some people being unable to enjoy the benefits of globalization. The prosperity gap is believed by several economic and political observers as the cause of the emergence of nationalism, which takes the form of import barriers.
Kompas/Ferganata Indra Riatmoko
A truck drives past oil palm plantations on Monday (12/3) in Nagari Pengkolan, Bosar Maligas district, Simalungun, North Sumatra.
The reason frequently being used to hamper Indonesia’s CPO products is that oil palm plantations have triggered forest encroachment, global warming, destroyed biodiversity and violated human rights. Indonesia wins at WTO by proving the high import duties on CPO are an act of trade discrimination.
Even though this time we may win the case, next time we need to improve forest and oil palm plantation governance to create a balance between the interests of small farmers and big business, to gain benefits from the natural resources as well as take responsibility in preserving the environment amid global warming and conserving the biodiversity because the nature needs a balance to create sustainable life.
In the future, the barriers will not ease given the fact that the world is getting more uncertain and complex. The government and the private sector need to join hands to outline a strategy and to improve capacity to cope with those challenges. It is the responsibility of the government to help farmers deal with global uncertainties.
