The European Union’s (EU) recent decision to curb palm oil imports from Asian countries will have far-reaching economic consequences for Malaysia, one of the world’s biggest producers and exporters of the commodity.
In response, our government is writing to the EU and planning to present petitions to the various European governments. It is also said to be in talks with the EU to mitigate the impact of this vote.
While all this is necessary, it seems like too little too late to reverse what looks like a major setback for the plantation industry. Could more have been done to prevent this momentous vote, or at least soften the blow?
The EU’s move didn’t just emerge overnight but has been brewing over the past few years. Has our government and the various agencies representing our palm oil interests been aggressive enough to fight our cause with the EU? It does not seem like it.
This month, the European Parliament voted for the resolution to phase out palm-based biofuels from the EU energy mix after 2020. The final decision will be made in a tripartite meeting along with the EU Council and the European Commission.
Prior to this, smallholders in Malaysia gathered to protest the vote that could jeopardise their livelihood. However, such protests are unlikely to hold much sway with the power brokers in the EU.
The facts speak for themselves. Europe has become Malaysia’s second-largest export market for palm oil, importing 2.06 million tonnes last year, overtaking China. Some 600,000 tonnes of its palm oil imports are used as feedstock for biodiesel.
The proposed EU boycott of palm oil from Malaysia, Indonesia and Thailand is purportedly done due to environmental considerations but clearly smacks of trade protectionism.
This could be a major turning point in trade relations with our European counterparts and the government should adopt a harder, more forceful stance to underline the importance of palm oil in our economy.
It is time we adopt a more strategic approach to protect the growth of our plantation industry in international markets, instead of just reacting with belated petitions.
