None of the palm oil producing governments have yet made any statement in the European media about the EU’s plan to ban biofuels from palm oil. This op-ed by Malaysia’s Datuk Seri Mah Siew Keong explains why the EU’s palm oil policies can prove to be dangerous. Datuk Seri Mah Siew Keong is Malaysia’s Minister of Plantation Industries and Commodities.
Members of the European Parliament’s environment committee voted on 23 October to ban biofuels produced from palm oil, as part of the revision of the Renewable Energy Directive. That such a ban would be discriminatory and lead to a possible WTO challenge, has been well-documented. Perhaps what is more important for MEPs, and others, to consider is the wider impact of such an approach, in particular, for EU trade policy.
President Jean-Claude Juncker’s recent State of the Union speech contained a key line that neatly summarises the importance of trade both for EU member states and for their trading partners. He said: “Trade is not something abstract. Trade is about jobs, creating new opportunities for Europe’s businesses big and small. Every additional €1 billion in exports supports 14,000 extra jobs in Europe.”
The President’s words are welcome. He speaks for the silent majority throughout Europe, of businesspeople, consumers, workers, unions, and others who all benefit from improved and increased trade opportunities. However, these opportunities require the EU to be serious about engaging constructively and respectfully with trading partners. In South-East Asia, the approach to palm oil is an indicator that the EU’s strategic objectives in the region are being overtaken by short-term politics.
A prime example is the EU’s current approach to Malaysia’s pioneering new sustainable palm oil standard, the MSPO (Malaysian Sustainable Palm Oil). As a trading partner, Malaysia hopes for – and expects – a positive reaction from the EU institutions towards MSPO, including eventually a formal recognition of the standard. MSPO, while extremely important, is not the only palm oil-related issue that needs consideration. A resolution on Palm Oil, approved by the European Parliament in April this year, made little impact in European media, but it made headlines for weeks in Malaysia and continues to do so.
Prime Minister Datuk Seri Najib Razak stated clearly at the time that the EU’s approach was unacceptable and could lead to trade retaliation. In Brussels, calling for a ban on palm oil may be seen as a quaint pet project of a few MEPs. In Malaysia, it is seen as an existential threat to families and livelihoods. Failing to understand the seriousness of the situation, the European Commission’s response did not correct the errors that caused such anger in Malaysia and across the region; rather, it compounded them.