KUALA LUMPUR: Malaysia, the world’s second-biggest palm oil producer, is weighing a range of trade curbs to strike back against what it calls unfair policies from the European Union (EU) that block the market access of the tropical oil.
Malaysia will coordinate its response with Indonesia – the largest edible oils supplier globally.
Strategies being considered include slowing commodities trade with Europe and reviewing imports from the bloc, according to Deputy Prime Minister Datuk Seri Fadillah Yusof.
The EU agreed to a historic law in December that will stop products causing forest destruction from being sold in European shops and supermarkets.
Products like wood, rubber, beef, leather, cocoa, coffee, palm oil and soy won’t make it past the port unless proven to be deforestation-free.
Malaysia and Indonesia are leading international critics of the policy.
“If they’re firm on their decision, if they do not want to listen to us, I think one of the areas that we can be looking at together with Indonesia is how we should look at Europe,” Fadillah, who is also Minister of Plantation and Commodities, said in an interview recently.
“If we are not fairly treated, I think there should be some counteraction by us.”
The two countries – which together make up more than 80% of the world’s palm oil supply – say the rule is discriminatory.
“It will cut off market access for millions of small farmers across the region, Latin America and Africa who do not have the means to meet the stricter traceability requirements.
“Palm oil is used to make everything from chocolate to lipstick, soaps and detergents.
“The action by the EU is trying to phase out smallholders from the system,” Fadillah said from his office in Putrajaya.
“The bloc keeps introducing new requirements despite compliance from bigger plantations on international sustainability standards, as well as the Malaysian government’s commitment to a greener economy and limiting new plantation areas,” he said.
Fadillah would be in Jakarta to discuss strategies with Indonesia. The two countries will hold a joint ministerial press conference today.
He declined to go into details of what Malaysia and Indonesia may do in terms of the possible trade measures, but said it would be part of the discussion.
“Together with Indonesia, we want to make the EU realise its action is a one-sided, unilateral decision,” he pointed out. — Bloomberg