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Malaysia, Indonesia mull taking EU plans to curb palm oil imports to WTO

Malaysia and Indonesia consider raising the European Union (EU) proposed restrictions on palm oil imports with the World Trade Organization (WTO), both countries said in a joint statement on July 16.

Commercial oil palm production in Malaysia celebrates its centenary in 2017 (photos courtesy Gustav Melin).

The statement from the Malaysian Ministry of International Trade and Industry (MITI) followed a meeting in Kuching, Sarawak, Malaysia on July 13 between Dato’ Sri Mustapa Mohamed, Minister of International Trade and Industry, Malaysia and Enggartiasto Lukita, Minister of Trade, Indonesia in conjunction with the 3rd Malaysia – Indonesia Joint Trade and Investment Committee meeting.

One of the issues discussed was the European Parliament (EP) Resolution on Palm Oil and Deforestation of the Rainforest which calls on the European Commission (EC) to phase out the use of “unsustainable” vegetable oils, including palm oil, in biodiesel in the European Union (EU) by 2020. Palm oil is a major agro-commodity for Indonesia and Malaysia, which together account for nearly 90 percent of the global palm oil production.

Both countries expressed “deep disappointment on the unfair treatment by the EU on palm oil” in favour of other vegetable oils and commodities which they say also “contribute significantly” to deforestation.

This EU resolution, as well as the unfair labelling practices by the private sector in the EU, will adversely affect not only exports of palm oil from Malaysia and Indonesia to the EU market but also the livelihood of millions of small holders, said the statement.

The two countries will work together to “enhance cooperation” through the Council of Palm Oil Producing Countries (CPOPC) and said that the two would meet at end-July to “discuss and coordinate” palm oil issues including organising a joint CPOPC mission to Europe to “engage with relevant parties and stakeholders.”

Further, Malaysia and Indonesia will consider taking the issue to the World Trade Organisation (WTO), if the “Resolution becomes an EU Directive and discriminatory in nature.”

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