KUALA LUMPUR: Malaysia will consider retaliatory actions against European exports if the European Union (EU) goes ahead to implement Delegated Act to phase out palm biodiesel.
"Malaysia will combat the EU's aggressive protectionist measure,” said Primary Industries Minister Teresa Kok, in a statement today.
This is in line with Prime Minister Tun Dr Mahathir Mohamad's recent warning to France President Emmanuel Macron that Malaysia would consider laws to restrict imports of French products if Paris did not withdraw plans to ban palm biodiesel.
French lawmakers had on December 19, 2018, voted to remove palm oil from the country's biofuel scheme, starting January 2020.
In his January 8, 2019, letter to Macron, Dr Mahathir had stated that if France persisted on banning palm oil, Malaysia would be forced to suspend free trade talks with the EU and impose similar sanctions against French exports.
The proposed EU Delegated Act, slated to be tabled before the European Parliament in April 2019, supplements the EU Renewable Energy Directive II to restrict and ban palm oil biofuel altogether, by 2030.
Kok said the Delegated Act is discriminatory against the economies of developing nations in Southeast Asia, Africa and Latin America which produce palm oil, and it is designed to hurt the livelihoods of millions of small farmers.
"The entire Delegated Act process has been based on the politics of protectionism. I oppose entirely the European Commission classifying palm oil as 'high risk'.
"Palm oil producing countries, including Malaysia, have consistently outlined the facts that demonstrate that the EU Delegated Act is inaccurate and discriminatory," she said.
Kok said the European Commission practised double standards, of which it failed to apply the same standard to soy bean oil, despite the fact that the EU’s own research proves soy bean is a bigger contributor to deforestation.
She also pointed out that palm oil produces eight times more oil than the US soy bean oil per hectare and yet the Eurepean Commission chose to classify soybean as 'low risk' for political reasons.
Kok is also dissapointed the European Commission had lower the definition of smallholders to 2 hectares compared with the previously proposed 2-5 hectares in the draft Delegated Act. "This is totally unacceptable and insulting to smallholders in the palm oil producing countries.”
She highlighted her ministry officers have recently flown to Brussels to meet EU officials and presented Malaysia’s arguments and position on the proposed Delegated Act.
Kok also confirmed Malaysia is working with partner countries in the Council of Palm Oil Producing Countries (CPOPC) to collectively address this palm oil discriminatory issue with the World Trade Organisation (WTO).
In 2015, the governments of Indonesia and Malaysia initiated the CPOPC as a common platform to promote palm oil and neutralise trade barriers.
CPOPC is also an international platform for downstream investors and smallholders’ forums to outline effective measures towards raising global consumption of palm oil.
Apart from Indonesia and Malaysia, oil palms are cultivated in the tropics. Southeast Asia is the lead producer of palm oil, followed by Latin America, Papua New Guinea and West Africa, all of which are developing countries.
Yesterday, Malaysia's Ministry of International Trade and Industry (Miti) deputy-secretary general (trade) Datuk Seri Norazman Ayob said his team has brought up this issue at WTO committee meetings on trade & environment and technical trade barriers.