18 Nov 2022
On November 16th, 2022, Indonesia Trading House Swiss made history by exporting its first shipment of goods. The export consisted primarily of fast moving consumer goods (FMCG), including spices, noodles, and Indonesian snacks. This marks the beginning of the Indonesia Trading House's role as a hub for trade between Indonesia and Switzerland through the Indonesia Chamber of Commerce and Industry (KADIN).
The formation of the Indonesia Trading House was made official on May 25th, 2022, with the signing of a Memorandum of Understanding between the Chairman of KADIN, Arsjad Rasjid, and the owner of Swiss Versand Indonesia Market, Catharina Oehler. The signing took place at the Indonesia Pavillion on the sidelines of the World Economic Forum in Davos, Switzerland. Oehler, an Indonesia diaspora in Switzerland who has been selling Indonesia products since 1999, was instrumental in the establishment of ITH as a way to help SMEs expand their reach into the global market.
Also in attendance were the Minister of Trade of the Republic of Indonesia M. Lutfi, and the Ambassador of Indonesia to Switzerland and Liechtenstein Muliaman D. Haddad, both of whom expressed their support for the initiative.
According to Lutfi, SMEs have traditionally been hesitant to enter the global market due to the perceived risks involved. However, with the support of ITH, Lutfi hopes that SMEs will be able to showcase their products to potential markets and continue to improve the quality of their exports.
Meanwhile Ambassador Haddad emphasized that the relationship between Indonesia and Switzerland is growing stronger, especially in the trading sector. He stated that in the first quarter of 2022, Indonesia's trade balance surplus was USD $1.16 billion.
A significant step forward
The establishment of ITH is a significant development in the implementation of the Indonesia-EFTA Comprehensive Economic Partnership Agreement (CEPA), which was ratified at the end of 2021. The CEPA aims to strengthen bilateral relations between Indonesia and Switzerland, particularly in the trading sector, and provides incentives for micro, small, and medium enterprises (MSMEs) to enter the global market. The launch of ITH is expected to encourage more business owners to take advantage of the benefits offered by the CEPA, which has already led to the removal of 7,042 tariff posts (81.74%) or 99.65% of the value of Switzerland's commodity imports from Indonesia.
Data from the Swiss Federal Office for Customs and Border Security shows that the export value of commodities from Indonesia to Switzerland reached $1.26 billion in the first quarter of 2022, a YoY increase of 998.0% compared to the same period in 2021 ($115.53 million). Switzerland is currently ranked fifth among European countries and 20th among all countries investing in Indonesia, with 152 projects valued at around $15.7 million in the first quarter of 2022, according to data from the Ministry of Investment/BKPM.
To support MSMEs in accessing the global market and exporting their products, ITH has set up a website and provided information on warehouses located in partner countries. In the future, ITH plans to work with the Indonesia Trade Promotion Center and the Switzerland diaspora to develop the market and promote MSME trade in Switzerland. ITH will initially be active in Switzerland, Australia, the United States, the Philippines, and Singapore.