14/03/2023 (Financial Times) - The UK government is planning to eliminate import tariffs on palm oil from Malaysia, a product blamed for widespread deforestation, as the price of joining an Asia-Pacific trade deal, according to people involved in the talks, prompting outrage from green campaigners.

Britain is finalising entry terms to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), an 11-member regional trade agreement, after two years of negotiations.

Malaysia, one of the pact’s members, has successfully demanded Britain cut its palm oil tariffs — which currently range up to 12 per cent — to nil immediately on entering the pact, said people familiar with the talks.

Alex Wijeratna, senior director at deforestation campaign group Mighty Earth, said: “The removal of tariffs on palm oil products from Malaysia without any environmental safeguards makes it very hard for the UK to call itself a climate leader committed to tackling deforestation and protecting precious habitats of endangered species.”

People close to the matter said that the UK at one point envisaged a multiyear phaseout period for palm oil tariffs, which Malaysia opposed.

The UK is expected to finalise broad agreement on the pact over the next couple of weeks before final signing in the summer.

Although the pact is of negligible economic impact to the UK, ministers have strongly promoted it as an example of a post-Brexit independent trade policy.

The Department for Business and Trade, which leads the CPTPP talks for the UK, said it could not comment on the negotiations.

Palm oil, which is harvested from oil palm trees, is used in a huge range of food and household products. Campaigners say that cutting down forests to create palm plantations damages biodiversity, in particular destroying the habitats of orangutans. Malaysia is the world’s second-biggest producer of palm oil after Indonesia, which is not a member of CPTPP.

Compared with the EU, which retains palm oil tariffs and is also planning tough new rules against imports linked to deforestation, the UK has a relatively light regulatory approach, with a law that only addresses deforestation defined as illegal under local laws in producing countries.

Clare Oxborrow, senior sustainability analyst at Friends of the Earth, said the plans were deeply concerning and could lead to more devastating loss of forest ecosystems.

“This concession is completely at odds with the government’s commitment to curb deforestation from UK supply chains. We need robust legislation that ensures the products we consume in the UK don’t harm forests, communities and wildlife overseas,” she said.

Because each of the CPTPP’s members has a veto on new countries joining the pact, the UK has been in a weak position in trying to resist demands for changes to its tariff regime and other policies. The pact also contains controversial investor-state dispute settlement provisions allowing companies to sue governments for violating international public law.

Participants in the talks said Canada, another CPTPP member, asked the UK to drop its rules against imports of beef raised with growth hormone, though London has rejected that request and is granting new quotas for hormone-free beef instead.

The minimal economic gains to the UK from joining CPTPP reflect both Britain’s geographical distance from the region and its existing bilateral agreements with most of the large economies, including Japan, Singapore, Mexico and Canada, which were rolled over from its membership of the EU.

https://www.ft.com/content/eb8b75aa-2608-4d20-a556-08b6b19af8aa