Indonesia and Malaysia say they will delay trade talks with the European Union to ensure fairer treatment for small palm oil producers hit by the union's new "punishment law" to prevent deforestation.
Malaysia's Deputy Prime Minister Dato Sri Haji Fadillah bin Haji Yusuf told the Financial Times during a visit to Brussels on Wednesday that the EU's recently passed law banning the import of products from deforested land is punitive and unfair. "The treatment of us and especially for small owners."
Indonesia's Economy Minister Erlanga Hartarto said the policy favors "larger companies or multinationals" that can provide the level of bureaucracy required by the regulations.
Indonesia, which has been negotiating a free trade deal with the European Union for seven years, has said it will not continue talks unless palm oil producers are given more leniency under new EU rules. "We can wait another seven years," added Hartarto.
Yusuf also said that EU officials' move to advance negotiations for a trade deal with Malaysia is dependent on EU steps to improve the treatment of small farmers.
The two ministers' intervention is the latest in a series of trade disputes between Southeast Asian countries and the European Union. Both sides have clear differences of opinion regarding the WTO.
The deforestation law, passed by EU lawmakers in December, bans the sale of livestock, cocoa, coffee, palm oil, soybeans, timber and rubber products unless they can be proven to come from sustainably managed land in the EU. or heavy weight.
The scoring system and technology to track deforestation are unclear, but the rules are expected to take effect next year, raising concerns among exporting countries.
According to Indonesian authorities, palm oil importers estimate that once the law is implemented, a single 20-foot container of palm oil may require 1.2 million documents to address hygiene requirements, customs declarations and sustainability certification.
The two countries fear that other trading partners could be excluded if they are considered "high risk". "The hashtag ... has implications for the country's sovereignty and image," the couple said in a statement.
According to the US Department of Agriculture, Indonesia and Malaysia account for 83 percent of global palm oil production. The third largest market is the European Union. Although consumption of palm oil in the Union will fall, imports will halve by 2032.
In Asia, especially Indonesia, Southeast Asia's largest economy and one of the world's leading carbon emitters, palm oil-related deforestation has been drastically reduced, environmental groups say.
By 2021, deforestation for oil palm plantations in Indonesia, Malaysia and Papua New Guinea will fall to their lowest levels since 2017, according to the Washington-based China Reaction Research.
But despite efforts to combat deforestation, Hayal Earth and other conservationists say large wildfires do more than destroy biodiversity and contribute to climate change.
Indonesia and Malaysia have introduced certifications for sustainable palm oil and are pushing for the EU to accept these certifications when implementing deforestation laws. However, EU officials say this is only possible with satellite technology that can track where deforestation is taking place.
Hartarto warned that the alliance risks losing partners if climate measures create "too many trade barriers".
Heidi Utala, who met the delegation, said she believed the EU could "transform the narrative of European regulatory imperialism into something more effective".
According to the European Union, measures such as deforestation are instruments of climate and environmental policy and are also used against domestic producers. Therefore, they are applied in a fair manner that does not create arbitrary or improper discrimination against third parties." -Producing countries or hidden trade restrictions. » Designed to be fully WTO compliant.
"The EU will strengthen its relations with producer and consumer countries in bilateral and multilateral fora to ensure effective implementation of the new rules by producer countries," she added.
A delegation of EU officials will visit Indonesia next month.
Sustainable Palm Oil Roundtable chief executive Joseph D'Cruz said the EU, Indonesia and Malaysia should work with the industry to demonstrate "sustainable production" under EU law while supporting "economic needs" and aspirations. "Farming Communities".
