MALAYSIA is waiting for the European Union to clarify its anti-palm oil law before taking the matter to the World Trade Organisation’s Dispute Settlement Body (DSB), the Dewan Rakyat was told today.

Deputy International Trade and Industry Minister Dr Ong Kian Ming said Malaysia is waiting for the clarification to see how the new EC law would curb the use of palm oil.

He said affected WTO members, of which Malaysia is one, needs to first assess how the EU curb against palm oil breached WTO regulations before taking the matter to the DSB.

He was replying to former minister Mustapa Mohamed (PH-Jeli), who asked whether Malaysia would raise an official objection to the WTO on the EU’s ban on palm oil as biofuel starting from 2021 and how Malaysia and Indonesia are tackling the issue.

The EU has proposed to limit the use of palm oil, phasing it out in motor fuel as it claimed the cultivation of oil palm led to deforestation. The move is seriously impacting palm-oil producers like Malaysia and Indonesia.

Ong said the government, for the time being, had already raised its concern and objections to the EU over its curb against palm oil via various councils and committees like the Technical Barriers Trade Council, Council for Trade and Goods and Trade and Environment Committee.

The discrimination against palm oil has also been raised as a “specific trade concern” in efforts to pressure the EU to reconsider its decision, he said.

“We are also taking other initiatives at the WTO level through the ‘Friends of Palm Oil’ (FPO) alliance. Other members are major palm oil producers like Indonesia, Thailand, Colombia, Guatemala, Ecuador, Costa Rica and Honduras.

“Among the action taken is voicing our objections together at various meetings at the WTO. The FPO also organised a special forum in 2017 to correct the misconceptions against palm oil using scientific evidence and facts.

“Other than the FPO alliance, Malaysia and Indonesia have also roped in fellow Asean nations for their support to put on hold Asean-EU relations from dialogue partners to strategic partners until the EU reconsiders its policy against palm oil,” he said.

Due to pressure from Malaysia and Indonesia, the EU Commission reportedly introduced several loopholes in the act, including an exemption for additional palm oil produced in independent small plantations of less than 5ha or produced on “unused” land.

Ahmad Maslan (BN-Pontian) said the EU is not the only market for Malaysia’s palm oil. 

Ong said the relevant agencies are trying to widen Malaysia’s palm oil market access.

“The largest importer of our palm oil is India. We will work more aggressively to promote the commodity there.

“We will also talk to India to reduce the tariff for palm oil. Last year, India cut the tariff from 45% to 40%. We believe there is room for further reduction.” – March 13, 2019.