Threats of trade war between Malaysia and EU on palm oil

17th May 2019
Threats of trade war between Malaysia and EU on palm oil

Ahmed J Versi

London, UK, (The Muslim News): Malaysian Primary Industries Minister, Teresa Kok, is leading a mission to London, Brussels, Berlin and Rome to prevent new European Union (EU) regulations on banning the use of palm olive in biofuels.

“This mission is part of Malaysia’s ongoing efforts to promote palm oil and palm-based products to key markets as well as to engage and address anti-palm oil sentiments in the region,” she told The Muslim News in London earlier this month.

The Association of South-East Asian Nations (ASEAN) refused to sign the Strategic Partnership Agreement with the EU in January because of the palm oil issue, said Kok.

The European Parliament has called for a ban on the imports of unsustainable palm oil for use in biofuel and is proposing that unlike other biofuels sold in the EU, a single approved certification scheme for palm oil should be used.

The EU and environmentalists claim that palm oil production has contributed to widespread deforestation in some of the world’s most eco-diverse regions, including Indonesia and Malaysia, who produce most of the palm oil.

The EU is also arguing devastating deforestation has decimated populations of Sumatran elephants, rhinos and critically endangered orangutans.

This tropical deforestation has resulted in ecosystem destruction, as well as substantial loss of forest carbon sequestration, crucial to the earth’s climate. Burning of forestlands also produces black carbon, now recognised not only as a dangerous air pollutant but also as an extremely powerful climate pollutant.

This has been denied by the Malaysian Government. “There has been a campaign against palm oil for decades, but the attack on palm oil slowly changed from health issue to the now environmental issue,” the minister said.

Kok lashed out at the EU’s position on forest products. “The EU has adopted the attitude that they are the custodians of the world, they are the custodians of forests around the world. They are not just blaming the palm olive they are now beginning to blame all forest-related products, meaning all products that put pressure on the forest environment. Palm olive, coffee and other tropical products are affected.”

At a recent United Nations meeting in Nairobi, the EU tried to pass a more general resolution that took into account other tropical products. “However, the countries in the tropical region vote that out,” she said.

The EU resolved in March that palm olive cultivation results in excessive deforestation and its use in biofuel should be phased out by 2030. Malaysian Prime Minister, Mahathir Mohamad described the EU’s hostile attitude on palm olive as “an attempt to protect alternatives that Europe produces itself, like rapeseed oil,” reported Reuters. He said EU was risking a trade war with Malaysia on palm olive. “Trade wars are not something we like to promote,” he said.

The Minister tried to damp down the attack on the EU by Mahathir. “The Cabinet has not made any decision as yet on this issue,” she said.

“One of the purposes for us to come to Europe is to hear from government leaders on their views on palm oil. We are not looking for confrontation like the one between China and the US. We should work together on the issue of deforestation.”

Kok argued that Malaysia’s deforestation was not as massive as Europe’s during its industrialisation. “If you look at Malaysia, we still have more than 50 per cent of our total land size with forest cover. Palm oil and forest trees can be planted together side by side.”

In January, the ASEAN refused to sign the Strategic Partnership Agreement with the EU. “It is a clear signal sent to the EU that ASEAN are happy with what we had done on palm olive production. Discrimination against palm olive is totally unfair to the people in the ASEAN. So the EU-ASEAN deal didn’t happen because of palm oil.”

“This issue definitely jeopardises the relationship between the EU and ASEAN. It will affect our trade, our people and jobs. It is not good for any of the parties,” she said.

The Government is trying to meet international standards by having sustainability palm oil certification. “We want to achieve 100 per cent certification,” said Kok.

The minister argued that by closing down palm olive industry it will not stop deforestation, “it will become worse. If there is no palm oil production then people will go to other types of oil crops like linseed and rap oil. Palm oil if the most efficient in terms of the land use compared to other types of oil crops. Therefore, they will face more deforestation.”

Kok said that the environmentalists and the European governments should go to Malaysia and “work with us on environmental issues to plant more trees and wildlife conservation.”

However, much of the palm oil sold in the UK comes from a refinery in Liverpool owned by a Malaysian company. “Most of the palm oil products sold in the UK comes from this factory. One requirement of the food industry here has been that the company provides certified sustainable palm olive,” she said.

Palm oil is the most widely used vegetable oil in the world, accounting for one-third of all vegetable oil consumption. Its use spans a wide range of products, including processed foods, cosmetics, body care products, detergents and biofuels.

“Palm oil has provided jobs for millions of small farmers, helping them to get out of poverty, earn more money and have a better life for them and their families,” said Kok.

Malaysia produces 17 million tonnes of palm oil, 80 per cent used for food products and 20 per cent non-food products like soap, detergents etc.

[Photo: Malaysian Primary Industries Minister, Teresa Kok,speaking on the EU ban of palm oil biofuels at Malaysian Embassy, London. Photographer: Ahmed J Versi/The Muslim News]

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