Europe on the Precipice: Which Path Will the EU Choose over Palm Oil?

In Malaysia, and across the developing countries in Africa, Asia and Latin America, palm oil is a source of income, food, stability and hope.

In Brussels, it is a source of controversy and strife.

First, the EU Parliament proposed a ban on all Palm Oil biofuels – which was clearly anti-WTO, protectionist, and unworkable. It was rejected.

Next, the MEPs insisted that the Commission present a Delegated Act with a subtler attempt to push Palm Oil out of the biofuel market (by labeling Palm Oil as “high risk”). This approach is still against WTO, and would destabilise Europe’s trade strategy in ASEAN.

The discussions remain ongoing in Brussels. DG Energy cannot agree a text; Commissioner Timmermans, and even President Juncker, are now involved. Ahead of the College of Commissioners meeting tomorrow, there is really only one question.

Which path does Europe want to choose for itself?

The issue of Palm Oil and the RED represents a wider question for the EU’s leaders.

Is the EU still the global leader, supporting international rules and the WTO? Are Europeans still open-minded, supportive of developing nations, and against discrimination?

Or is there now a darker change of direction in Brussels, towards inward-looking protectionism and populism? A new direction that ignores ASEAN allies, disregards the UN Sustainable Development Goals, and does not care about harming developing countries and small farmers.

That is the question before the Commissioners.

If the Commission moves to label Palm Oil as “High Risk” that is a Ban. If the Commission moves to “Phase Out” Palm Oil this is also a Ban. It signals that the EU prioritises discrimination and protectionism over its strategic geopolitical and trade interests.

It will signal that Europe no longer values the United Nations Sustainable Development Goals.

Approving that Ban will signal Europe is prepared to ignore the WTO’s rules-based trading system and disregard the needs of ASEAN allies.

ASEAN has made clear the consequences if the EU does choose this darker direction. At the recent EU-ASEAN Ministerial, ASEAN refused to upgrade the EU’s status to ‘strategic partner’. Why? Because of the EU’s political and financial support of hostile and protectionist policies against Palm Oil.

Ministers from Malaysia and Indonesia have explicitly stated that any EU Ban (including a ‘high risk’ label) would lead to a WTO case, and trade retaliation against EU products.

This is an election year in Brussels.

Having spent the past three years criticizing U.S. President Donald Trump as an isolationist and protectionist, will the EU really now introduce a protectionist attack against its ASEAN allies?

Having spent the past three years trying to save the WTO – will the EU really want to pass a measure that is so dismissive of WTO rules?

Time will tell: but this is now the decision that Commissioners must come to.

ASEAN’s position is clear. There will be consequences for the EU’s trade position in Asia. As the Eurozone tips back towards recession, that is serious enough.

More importantly, this would be a hammer blow to the EU’s moral authority around the world. Never again would developing countries take seriously any calls from Brussels for ‘openness’ or ‘respect for international rules and norms’.

Which path does Europe want to choose for itself?