Critical Week Ahead for Palm Oil in Brussels

Round 2 for EU Trilogue Negotiation on Palm Oil Ban; Fake NGO Attacks Underway

On Tuesday 27th March, EU negotiators will sit down for Round 2 of the Trilogue negotiations on the Renewable Energy Directive (RED).

On one side of the table will be the Members of the European Parliament, who are committed to banning Palm Oil biofuels under the RED.

The EU Commission will also be present at the negotiations: the Commission has stated its position that a ban on Palm Oil would be discriminatory and against WTO rules. This is accurate, and helpful for Malaysian Palm Oil.

On the other side of the table, sits the Council – representing the 28 EU governments. Some of whom are supporting Malaysia, and opposing the ban on Palm Oil – notably Italy, Spain, and France who have all stated publicly their opposition to the ban.

Malaysia takes these positions as a matter of trust, and a promise to the people of Malaysia.

Some major EU countries, most notably Germany & the UK, have not declared any support for Malaysia. This is despite clear evidence of the negative impact on their economies if the EU triggers a trade war through an aggressive Palm Oil ban.

The divisions are clear in Brussels, between those who look to impose a discriminatory ban on Malaysian small farmers, and those who support Malaysia’s development.

However, radical European NGOs are on the attack in an attempt to flip the balance. Friends of the Earth, and Rainforest Foundation Norway, have spent millions of Euros in just one week to pressure the French Government to change their position.

Advertising was placed in all major French newspapers – a massive campaign expenditure aimed at undermining one of Malaysia’s key supporters in Europe. So who funded this huge outlay? It was co-funded by a French food manufacturer (protectionist) and the Norwegian oil-and-gas wealth fund (environmental hypocrites).

The French Government has taken the correct, and principled, position so far. They should stand firm in the face of protectionist and sensationalist bullying from the radical NGOs.

The positions of Palm Oil producing countries are clear. Malaysia, Indonesia and Thailand are not bluffing. The French Government, and all other EU leaders, need to consider the wider trade & cooperation agenda, and the EU’s broader national interests in Asia.

Minister Datuk Seri Mah Siew Keong reconfirmed the Malaysian Government’s position last week:

“We are taking a lot of efforts to fight the challenge. If the EU takes unfair actions against our palm oil, it will jeopardise the livelihood of our 650,000 oil palm smallholders. We do not want any conflict but if the EU presses us, I think nobody will benefit. There are bound to be retaliatory actions”.

Malaysians are not the aggressor here. The EU Parliament is. Any trade consequences would be because of the EU’s aggression.  This is no different from President Trump’s unprovoked trade sanctions attack against America’s European allies.

After Tuesday, the EU will take a one-month hiatus before the next Trilogue negotiation on RED. There is one significant risk for Palm Oil producers that needs to be addressed during that time – we will be looking at this in detail in a forthcoming blog. That is the risk of the EU instituting a ‘disguised ban’. This would be where the wording of the current ‘ban’ is removed, and new hidden criteria are introduced to exclude Palm Oil via a different – more subtle – route.

The EU may think such sleight-of-hand won’t be noticed. They are wrong.