Malaysia weighs trade curbs to fight EU’s anti-palm oil policies
08/02/2023 (Free Malaysia Today), Putrajaya - Malaysia, the world’s second-biggest palm oil producer, is weighing a range of trade curbs to strike back against what it calls unfair policies from the European Union that block market access for the tropical oil.
It will coordinate its response with Indonesia, the largest edible oils supplier globally, according to deputy prime minister Fadillah Yusof. Strategies being considered include slowing commodities trade with Europe and reviewing imports from the bloc.
The EU agreed to a historic law in December that will stop products causing forest destruction from being sold in European shops and supermarkets. Products like wood, rubber, beef, leather, cocoa, coffee, palm oil and soy will not make it past the port unless proven to be deforestation-free. Malaysia and Indonesia are leading international criticism of the policy.
“If they’re too firm on their decision, if they do not want to listen to us, I think one of the areas that we can be looking at together with Indonesia is how we should look at Europe,” Fadillah, who is also the plantation and commodities minister, said in an interview on Tuesday. “If we are not fairly treated, I think there should be some counteraction by us.”
The two countries, which together make up more than 80% of the world’s palm oil supply, say the rule is discriminatory. It will cut off market access for millions of small farmers across the region, Latin America and Africa who do not have the means to meet the stricter traceability requirements. Palm oil is used to make everything from chocolate to lipstick, soaps and detergents.
Indonesian talks
“The action by the EU is trying to phase out smallholders from the system,” Fadillah said from his office in Putrajaya. The bloc keeps introducing new requirements despite compliance from bigger plantations on international sustainability standards, as well as the Malaysian government’s commitment to a greener economy and limiting new plantation areas, he said.
Fadillah will head to Jakarta on Wednesday to discuss strategies with Indonesia. The two countries will hold a joint ministerial press conference on Thursday.
On the possible trade measures, he did not want to go into details of what Malaysia and Indonesia may do, but said it would be part of the discussion.
“Together with Indonesia, we want to make the European Union realise their action is a one-sided, unilateral decision,” he said.
Bloomberg