M’sia seeks palm oil tariff cuts from India

While India reduced the tariff to 40% last year, there is still room for further reduction from the RCEP perspective, says Ong


The Regional Comprehensive Economic Partnership (RCEP) would provide a platform for the government to seek further reductions on import tariff for palm oil products from India.

Deputy International Trade and Industry Minister Dr Ong Kian Ming said the signing of the multilateral trade agreement this year would likely see an increase in demand for the commodity, which would deem the request to cut tariffs as favourable.

“The Malaysia External Trade Development Corp and other agencies are collaborating with each other to widen the palm oil market access to other countries. Our main export country is not the European Union (EU), but India.

“Not only do we have to promote our palm oil aggressively, we also need to discuss with parties like India to reduce the tariff on palm oil,” he said.

He added that while India reduced the tariff on palm oil from 45% to 40% last year, there is still room for further reduction from the RCEP perspective.

Ong was responding to Pontian MP Datuk Seri Ahmad Maslan’s question in the Dewan Rakyat yesterday, on the government’s plan to widen market access for palm oil products.

Ong had previously expressed optimism that the RCEP will enable Malaysian companies to export their goods and services to larger markets like India and enjoy lower tariff and non-tariff barriers.

The RCEP is a proposed free trade agreement (FTA) among the 10 Asean member countries and six countries that the regional grouping has existing FTAs with — namely Australia, China, India, Japan, South Korea and New Zealand.

The combination of all 16 countries negotiating for the RCEP covers about a third of global GDP and nearly half of the world’s population.

Jeli MP Datuk Seri Mustapa Mohamed had earlier asked Ong to state whether the government would submit a formal protest to the World Trade Organisation (WTO) regarding the EU’s proposal of banning the use of palm oil in biofuel from 2021.

Ong said the government has no plans to bring the matter to the WTO as the EU’s delegated act on palm oil is still in the discussion stage at the EU Commission.

“The EU’s delegated act has not been finalised and brought to the European Parliament. We will wait for more clarity before making any decision as part of our effort to justify our stance with countries that would be affected by this delegated act,” he said.

The delegated act, which will determine the sustainability criteria of biofuels under the EU’s new renewable energy directive (RED II), is expected to be tabled in the European Parliament next month. The RED II would see the ban of palm oil biofuels in the EU by 2030.