M’sia-EU FTA talks may be affected if discriminatory practice continues


THE suspension of the proposed Malaysia-European Union Free Trade Agreement (MEUFTA) and, to some extent, the Malaysia-European Free Trade Association Partnership, are interlinked in the imbalanced treatment of the country’s palm oil and its products in the negotiations of FTAs.

International Trade and Industry Minister Datuk Darell Leiking said despite that, Malaysia continues to promote trade openness and acknowledges the importance of bilateral and multilateral trade cooperation.

“The EU was the largest market for Malaysian palm oil and palm oil-based products in 2018. The top three destinations for Malaysia’s exports of palm oil in the EU are the Netherlands (50%), Spain (17%) and Italy (12%).

“Malaysia remains highly committed to preserving its nature, while protecting the livelihood of its people, and hopes that the discrimination on palm oil and singling out palm oil in the name of deforestation will stop,” he said in his keynote address at the EU-Malaysia Trade and Investment Forum 2019 in Kuala Lumpur yesterday.

The speech was read out by Ministry of International Trade and Industry deputy secretary general (trade) Datuk Seri Norazman Ayob (picture).

Norazman added that Malaysia’s policy has always been consistent, and that the FTAs must be able to induce mutually beneficial outcomes.

“In any FTA, both parties need to reach what we call the ‘zone of possible agreement’.

Without this zone, there will never be a consensus, a meeting of points that will ensure that we can conclude the FTA negotiations,” he said.

Norazman also said while Malaysia supports the international rule-based trading system, the system of the rules applied should be based on fair justification.

He said the government could not comprehend the fact that palm oil is singled out, on the basis that it has led to the highest indirect land use risk which contributes to a high carbon emission and deforestation.

“(However), there is evidence that soybeans actually contribute a far higher carbon footprint. So, how is it possible that crops such as soybean, rapeseed and sunflower oil which are produced in the EU are not subject to the same risk as palm oil?

“In this regard, it has actually led to the government suspending negotiations on the FTA with the EU, as well as the European Trade Association,” he said.

Norazman also said Malaysia has continuously expressed its concerns at the World Trade Organisation, and various committees and councils on the matter which is perceived as unfair and discriminatory against Malaysian palm oil.

“I’m glad to note that the EU has responded by setting up a working group together with Asean to resolve this. We hope that this issue will be resolved amicably because we do not rule out the possibility of our government taking other measures that may have further implications to the trade relations with some EU countries,” he said.

Meanwhile, speaking at a press conference afterwards, EU-Malaysia Chamber of Commerce and Industry CEO Roberto Benetello hopes that the Malaysian government will resume negotiations on MEUFTA the soonest possible.