Risks for trade The three policies, in combination with the most recent announcement in the Netherlands, indicate that the EU is taking some sort of environmental trade control seriously.
This has not gone unnoticed. Efforts by the Dutch Presidency to implement the policies would risk disagreement with palm oil – producing countries – key trading partners for the EU in general, and the Netherlands in particular.
The bigger question is whether the EU is of the opinion that it can undertake these measures unilaterally in the light of recent policy initiatives in both Malaysia and Indonesia. Each has introduced government-backed sustainability standards for palm oil production. The Malaysian standard in particular follows national standards procedures and conforms to norms established in the International Standards Organisation.
Any move by the EU – or its member-states – to push a private, non-governmental standard – rather than recognise one that has been established by a sovereign government – could have further ramifications for European trade policy, and for any trade push by the EU into Southeast Asia’s palm oil-producing region. The idea that the EU wouldn’t to some extent recognise a standard established by one of its trading partners could be politically sensitive.
The EU recently announced a new trade strategy called ‘Trade for All’. It looks to work towards a more responsible trade and investment policy. The policy states that Asia is crucial to Europe’s economic interests; yet Asia appears to be something of an afterthought in EU foreign policy.
The EU-Singapore free trade agreement went ahead because there was nothing contentious in it; in some ways it can simply be considered an agreement on investment and services. The EU-Vietnam agreement negotiations concluded in December 2015; and there is still at least an 18-month legal review and ratification period ahead.
But the reality is that the EU’s trade relationship with most ASEAN countries has stagnated. Still, as demand in Europe wanes, its manufacturers and service providers need greater market access in growing markets.
The only way this will happen is with careful and considered bilateral or multilateral engagement that covers national standards; EU trade regulations such as due diligence laws; and broader trade engagement.
If European countries want to determine which sources of palm oil can enter Europe and which can’t, they must be made aware that this will encounter serious problems.
MPOC
EU Push for Sustainable Palm Oil was last modified: April 12th, 2016 by GOFB
