Tuesday, 27 March 2018

Europe-Asia trade war looms over palm oil

Draft EU law seeks to ban all palm oil biofuel imports by 2021, a move Malaysia has likened to 'crop apartheid' and Indonesia has vowed to retaliate

Mah Siew Keong, Malaysia’s minister for plantation industries and commodities, is on the front line of a looming trade war against what he sees as unfair European Union (EU) trade practices.

Last April, the European Parliament voted in favor of a draft law that aims to ban on palm oil biofuel imports to the EU beginning in 2021 due to environmental concerns the crop is contributing to deforestation.

The European Commission, the EU’s principal executive body, has yet to formulate a final draft law. Each of the EU’s 27 national governments will have to ratify the ban before it is uniformly enforced.

Still, the proposed move has spurred a diplomatic row with Malaysia and Indonesia, the world’s top palm oil exporters, and now threatens to spiral into tit-for-tat punitive trade measures.

Mah, known as Malaysia’s global palm oil ambassador, has likened the EU proposal to “crop apartheid.” The draft law, he notes, does not prohibit other similar oils such as rapeseed, olive and soybean that are mostly grown in EU member states.

Indonesia and Malaysia employ around 3.5 million people in the palm oil industry, generating a combined export value of over US$40 billion annually.

Read the full story at Asia Times.

Nile Bowie is a writer and journalist with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.