Page 120 - BUKU STRENGTHENING THE INDONESIAN PARLIAMENTARY DIPLOMACY FADLI ZON

The premises of the potential benefits from trade liberalization are often inferred under
idealized market condition. In reality however, market condition is far from being perfect.
Globalization has created winners and losers. Among those who gain from globalization, the
collective economic welfare is not equally shared by all socio-economic groups.

Many countries are threatened as the backbone of their economies collapsed. For decades,
agriculture has been accounted for a large share of GDP, an employment generator, basic
necessity provider, and a source of income for millions of rural populations. In line with trade
liberalization, the share of developing countries in agricultural exports declined, while their
share in agricultural imports increased, thus, excluding millions of people from the agricultural
sector, turning land owners into peasants.

Under the present trade regime, our “free trade” practices are neither free nor fair. When global
trade policies are harmful for state’s economic condition, they are no longer beneficial and an
evolution of the international trade regime is critical. Global trade should be in favor of the
poor. In reality however, money flows to those who prosper as food flows to those who have
the money instead to those who need it the most. Mounting evidence showed that free trade
is not the answer to end hunger and poverty. The two of the world’s greatest problems are not
inevitable. They exist as inequality and vulnerability persist at many levels of the global society.

The reality of globalization has triggered different reactions. The resistance can be seen in
several forms, one of which led to the concept of fair trade, aimed at confronting the negative
impacts of free trade and globalization in developing countries. A fair trade regime entails fair
and equitable partnership between producers and marketers which ensure equal opportunities
for the advancement of all; openness to public accountability; long-term and sustainable
trade practices; appropriate working condition; and the availability of capacity building for
traditional producers.

In Indonesia, agriculture remains significant for the national economy. As a form of
commitment towards sustainable agriculture techniques, Indonesia launched the Indonesian
Sustainable Palm Oil (ISPO) standard in 2009, aimed at ensuring that all Indonesian oil palm
growers conform to higher agricultural standards. Still, the implementation of anti-dumping
duties in the European market has injured Indonesian small farmers in favor of large European
corporates.

Another example from the perspective of coffee growers is the certification scheme that limits
the market potential and the benefits for coffee growers. Additional endowment paid by
consumers is not directly distributed to the farmers. Titled as “fair trade coffee”, the regime
has evolved from a socio-economic concern to a novel marketing method, putting the coffee
growers as subordinates.

Selected Speeches of the Vice Speaker of the House of Representatives of the Republic of Indonesia I 107