The leaders of Malaysia and Indonesia, the world's two largest palm oil producers, pledged on June 8 to work together to force the European Union to scrap "discriminatory" forest protection measures adopted in April that are hurting exports of the commodity.
Until now, the two Southeast Asian countries have acted separately to challenge EU regulations that they say are unfair to the supply chain of palm oil, the world's most widely consumed vegetable oil.
In a joint statement, Malaysian Prime Minister Anwar Ibrahim and Indonesian President Joko “Jokowi” Widodo said the two countries would work closely to address the “highly detrimental discriminatory measures” against palm oil in the European Union Deforestation Regulation (EUDR). The statement came after the two leaders met during Jokowi’s first official visit to Malaysia since 2019.
In April, the European Parliament adopted the EUDR, which aims to ban the sale of palm oil, soy, coffee, cocoa, beef, rubber, wood, charcoal, and derivative products such as leather, chocolate, and furniture produced on deforested land after 2020. The legislation is awaiting final approval by EU members.
Under this regulation, all companies involved in the trade of these products and their derivatives must comply with strict due diligence requirements when exporting to or selling within the EU.
Indonesian President Joko Widodo meets with Malaysian Prime Minister Anwar Ibrahim in Putrajaya, Malaysia on June 8. This is Mr. Widodo's first official visit to Malaysia in four years. Photo: Nikkei Asia
Malaysia and Indonesia account for about 85% of the world's total palm oil exports, which are used to make a variety of products, from cakes to cosmetics.
However, environmentalists say palm oil is responsible for deforestation in the two countries, destroying the habitat of rare animals.
Malaysia has described the new law as “unfair” and an attempt to protect its domestic EU oilseed market, which cannot compete with palm oil. It also said it would have a detrimental impact on small-scale farmers who cannot afford the costs of complying with the law.
EU policymakers have rejected these claims, saying the rules apply to all commodities produced anywhere in the world, and that the EU market remains open to sustainably produced palm oil.
In May, Malaysia and Indonesia sent a joint delegation to Brussels to meet senior EU government officials to express concerns about the EUDR.
Both countries have also suspended trade talks with the EU pending negotiations on fairer treatment for small palm oil producers affected by the EUDR, according to the Financial Times.
The EUDR is just the latest issue affecting relations between the EU and the world's two leading palm oil producers.
In 2019, Indonesia filed a complaint with the World Trade Organization (WTO), accusing the EU of unfair trade practices when it decided to stop using biodiesel made from palm oil. Malaysia also filed a complaint with the EU at the WTO in 2021 .
Nguyen Tuyet (According to SCMP, The Jakarta Post, Nikkei)
Source
Comment (0)