International Trade and Industry Ministry condemns EU's palm oil ban

Malaysia will intensify collaboration with other palm oil producing countries to consider more concerted efforts to voice its strong concern before the various committees under the WTO, Mustapa said.

PETALING JAYA: The International Trade and Industry Ministry (MITI) has condemned the European Union (EU) Parliament's decision to ban palm oil from the EU biofuel programme by 2021.

Echoing Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong, MITI minister Datuk Seri Mustapa Mohamed said the move discriminates against palm oil producing countries.

"It is also a regressive step which will fuel further uncertainty surrounding global trade," Mustapa said in a statement on Monday (Jan 22).

"As more and more countries around the world embrace protectionism, many had hoped that the EU will provide the necessary leadership role to uphold the principles of free and fair trade," he added.

Mustapa said the ban is a potential violation of the rules laid down by the World Trade Organisation (WTO) as it is a deliberate attempt to block the access of palm oil into the European market.

He said that Malaysia is the world’s second largest exporter of palm oil, adding that RM10.3bil of the total exports of palm oil in 2016 went to the EU.

He said the palm oil ban will adversely affect the livelihood of over 650,000 palm oil smallholders in Malaysia.

Mustapa called on the European private sector not to be influenced by the EU vote and the negative sentiment against Malaysian palm oil.

Mustapa said Malaysia will collaborate with other palm oil producing countries to raise concerns before the various committees.

He said this included WTO committees such as the Committee on Sanitary and Phytosanitary (SPS), the Committee on Technical Barriers to Trade (TBT) and the Committee on Market Access.

The Ministry is also chairing the meeting of technical experts of the Friends of Palm Oil (FPO) in Geneva to assess the possible impact from this latest development and to explore further actions.

Mustapa said the ministry will facilitate outreach efforts to clarify the misconceptions related to Malaysian palm oil through lectures and informal dialogues with the WTO.

"Malaysia is also seeking a comprehensive solution for the discriminatory treatment to palm oil based biofuels as compared to other crop based biofuels through the Malaysia-EU FTA (MEUFTA) negotiations," he added.

Mustapa said MITI will continue to work closely with the Plantation Industries and Commodities Ministry to ramp up engagement with the EU countries.