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Indonesia, Malaysia team up against EU’s arbitrary policy
Even though the EU claims the deforestation regulation will be enforced on all farm commodities, major producing countries, notably Indonesia and Malaysia, suspect the rule implicitly aims at palm oil, which is the most productive and consequently most competitive among all vegetable oils
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President Joko “Jokowi“ Widodo (right) talks with Malaysia's Prime Minister Anwar Ibrahim during their meeting at the Bogor Palace in West Java on Jan. 9.
(Reuters/Willy Kurniawan)
T
he strong commitment displayed by Indonesian President Joko “Jokowi” Widodo and Malaysian Prime Minister Anwar Ibrahim to the fight against discriminative trade policy on palm oil following their summit on Monday should be an encouraging development for the industry.
The new commitment for cooperation by the two countries, which account for more than 95 percent of the global palm oil production, which in turn supplies almost 50 percent of the global vegetable oil, is timely in view of the increasing tendency among the advanced countries to cope with climate change issues through trade policies.
Whereas the prevailing view had been that trade and environmental issues were only tangentially related and the primary role of trade policy was to expand trade flows, which in turn would create higher incomes, it is now believed that higher environmental standards should inevitably follow. This trend has sharpened the division between the advanced and developing countries.
But proactively addressing environmental issues through trade policy is emblematic of a much broader shift. Trade policy is no longer just about trade. It is now being tied to a set of broader concerns that will require trade negotiators to wade into areas that were previously far beyond their remit.
The European Union will soon enforce a deforestation regulation, which will ban from the EU market farm commodities and their derivatives, which do not fulfill the sustainability standards as unilaterally set by the EU in the regulation.
Even though the EU claims the deforestation regulation will be enforced on all farm commodities, major producing countries, notably Indonesia and Malaysia, suspect the rule implicitly aims at palm oil, which is the most productive and consequently most competitive among all vegetable oils.
Ibrahim’s and Jokowi’s camaraderie to jointly fight discrimination against palm oil and strengthen their cooperation through the Council of Palm Oil Producing Countries (CPOPC) mark a shift of approach of the two countries from the earlier accommodative stance as they showed in allowing the Roundtable on Sustainable Palm Oil (RSPO) to set sustainability standards for the commodity.
