EU’s move against palm oil ‘a potential violation’

According to Mustapa, it is a deliberate attempt to block palm oil access into their market


The European Union’s (EU) Renewable Energy Directive of excluding palm oil-based biofuels is a potential violation of the World Trade Organisation’s (WTO) rules, said International Trade and Industry (MITI) Minister Datuk Seri Mustapa Mohamed.

The minister described the exclusion of palm oil-based biofuels in the new EU Renewable Energy Directive by 2021 as unfair.

“The EU’s latest move is also a potential violation of the WTO rules as it is a deliberate attempt to block palm oil access into their market.

“We will raise this issue at the Committee on Sanitary and Phytosanitary, and Committee on Technical Barriers to Trade in March, then the Committee on Market Access in April,” Mustapa said in a statement yesterday.

The government, he said, is planning to collaborate with other palm oil-producing countries such as Indonesia to voice their concern on this issue.

Mustapa said MITI will continue to clarify the misperception regarding Malaysian palm oil — while including a lecture series alongside a WTO informal dialogue in the coming months — as well as to discuss a potential solution through negotiations.

“Malaysia is seeking a comprehensive solution for the discriminatory treatment to palm oil-based biofuels compared to other crop-based bio-fuels through the Malaysia- EU Free Trade Agreement (FTA) negotiations — which we hope to relaunch sometime this year, as well as the proposed Asean-EU FTA,” he said.

The ministry plans to work closely with the Plantation Industries and Commodities Ministry to continue its engagement with EU countries and develop a solution for local palm oil exporters and smallholders.

Mustapa said the development is considered discriminatory against palm oil-producing countries.

“For small trading nations like Malaysia, this is a worrying development which — together with the unfair labelling practices by the private sector in the EU member states — will adversely affect the livelihood of over 650,000 oil palm smallholders,” he added.

He further said the European private sector should be fair and above unsubstantiated claims in the matter, and not be influenced by the vote in the European Parliament.

“It is also a regressive step which will fuel further uncertainty surrounding global trade,” Mustapa said

“As more and more countries around the world embrace protectionism, many have hoped that the EU will provide the necessary leadership role to uphold the principles of free and fair trade.”

Malaysia is the world’s second-largest palm oil exporter after Indonesia and has exported 15.2% of its palm oil to the EU worth RM10.3 billion in 2016.

MITI had also sent an objection letter addressing the ban with 10 reasons through 27 EU countries’ ambassadors last Friday.

Currently, MITI is chairing the Friends of Palm Oil technical experts’ meeting in Geneva to evaluate the potential effects of the development and discuss countermeasures.