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Saturday April 21, 2012

‘EPA distorts assessment of palm oil to discredit Malaysian exports’

IN the letter entitled No decision has been made on palm oil access to America's biofuel market (StarBiz, April 18), the US Government claims that its current refusal of palm oil under Renewal Fuel Standard (RFS) would not keep palm biodiesel out of the US marketplace and was not a trade distortion. This is both inaccurate and misleading.

The Environmental Protection Agency (EPA) has knowingly distorted its assessment of palm oil to ensure that Malaysian exports of palm biodiesel do not qualify for a credit under RFS, a critical element for access to the US biofuel market.

The agency's assessment misrepresents the palm oil's industry land use change impact, while applying inaccurate and manipulated indirect land use change criteria, that experts the world over have noted are not well understood.

Consider the fact that an analysis undertaken by Dr Robert Shapiro, former Undersecretary of Commerce under President Clinton, finds more accurate greenhouse gas emissions savings for palm oil to be between 58% and 64%.

Meanwhile, the carbon removal capacity of Malaysia's Land Use and Land Use Change and Forestry sector of 247 million tonnes in 2007 displaced all emissions from Malaysia's agriculture, a trend that continues today.

Imposing discriminatory treatment on palm oil will not allow it to compete with local oils for US' biofuel market even if it is allowed to be imported.

This will remove the business competitiveness of palm oil in the market place, the main reason for World Trade Organisation disallowing such actions.

Government officials must understand the business angle as well.

While we welcome the fact that the EPA's latest action does not represent a “final ruling,” this initial determination reflects a significant set-back in the effort to increase trade between South-East Asia and the United States, as reflected by ongoing negotiations on the Trans-Pacific Partnership Agreement.

US efforts to increase access to South-East Asian markets cannot be achieved by imposing arbitrary barriers to our exports.

Ongoing negotiations must be built on trust and mutually beneficial market access. Unfortunately, the EPA's first step sets a dangerous precedent.

Tan Sri Dr Yusof Basiron

CEO of Malaysian Palm Oil Council

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