KUALA LUMPUR: The Center for Market Education (CME) said restarting free trade agreement talks (FTA) talks with the European Union (EU) could help deal with the issue of over-dependence on China as a major trading partner.
"As stressed by CME in several occasions, the high dependance on China is one of the reasons behind the ringgit weakness and diversification can only benefit Malaysia," CME chief executive officer Dr Carmelo Ferlito said in statement today.
In 2023, China accounted for 13.5 per cent of Malaysia's export and 21.3 per cent of Malaysia's import.
Ferlito said Malaysia's commitment to free international trade through diversification, will help strengthen the currency.
In 2023, the Euro-area alone represented 7 per cent of Malaysia's international trade, standing at 7 per cent both as export market destination and as import source.
CME said the Malaysian Sustainable Palm Oil (MSPO) standard should be the first point of dialogue between Malaysian and the EU when it renews discussions on a Malaysia-EU FTA.
It said such a move will show mutual good intentions in achieving an inclusive and sustainable free and fair trade agreement.
"In fact, the MSPO scheme represents a first and important contributor in the battle against deforestation," CME said.
CME said MSPO is an equitable and practical certification scheme that can further strengthen sustainability practices throughout the palm oil production value chain.
"The MSPO is inclusive as it aims to bring in smallholder farmers and make them more accountable for their actions and farming practices."
"Oil palm is a source of income for over seven million smallholders globally and in Malaysia, smallholder production accounts for 40 per cent of total palm oil plantation areas."
"While MSPO shares the same objectives and goals with certification schemes like the Roundtable on Sustainable Palm Oil or RSPO, the core differentiation is in MSPO's focus towards addressing the needs of smallholder farmers and the demands placed upon them," CME chief executive officer Dr Carmelo Ferlito said in a statement.
He added that the significantly lower cost for MSPO certification has made it more attractive to smallholders that depend on palm oil for their livelihoods.
"Naturally, if it is expensive to be certified, cost-sensitive and financially-limited smallholder farmers will turn away from any form of certification, depriving them of an opportunity to improve their operations in a sustainable manner and potentially impact their access to international markets," Ferlito said.
The lower cost factor coupled with making MSPO certification compulsory has resulted in 96 per cent of all palm oil farming in Malaysia being MSPO certified.
This means that nearly all companies and smallholders in Malaysia are producing and selling Fresh Fruit Bunches (FFB) from a planted area that is managed in an environmentally and socially responsible manner.
CME said as suggested by the Minister of Plantation and Commodities, Datuk Seri Johari Abdul Ghani, the right approach should be based on gradualism and mutual recognition of the common interest in achieving important targets in terms of sustainability, and such targets should be achieved through the acknowledgment of the conditions on the ground and the trading partners should accompany each other toward the common goal.