- Senior Ministers from Indonesia and Malaysia met in Jakarta this week
- They agreed to take their objections to the Deforestation Regulation directly to Brussels
- Surveys indicate objections to the EU’s approach go well beyond the palm sector
On Thursday of last week, Indonesia’s Coordinating Minister for the Economy Airlangga Hartarto and Malaysia’s Deputy Prime Minister Fadillah Yusof met in Jakarta to focus on one issue: the EU’s Deforestation Regulation.
Meeting under the auspices of CPOPC, the meeting gathered a broad array of palm stakeholders – from government to private sector, from smallholder interest to certification – to discuss how to move forward against the EU.
First, Indonesia and Malaysia are going to send a joint delegation to Brussels to basically confront the EU on the ‘unintended consequences’ of the regulation, with exclusion of smallholders being the most notable.
Any impact on smallholders has always been a serious red line for both countries, as any change to the global palm oil trade disproportionately impacts a large percentage of the rural population in both countries.
Second, both countries are looking to further rally ASEAN – members and potentially the Secretariat – to work as another platform for the sector. There are rumours – as yet unconfirmed – that Thailand will participate in action being undertaken by CPOPC and/or ASEAN.
According to those in the room, the meeting represented ‘years of frustration’ created by the EU’s approach towards palm oil. An additional red line being discussed among participants was the designation of either or both countries as being “high risk” for deforestation. This represents another source of exasperation: refusal by the EU to accept that both countries have unilaterally implemented measures that have reduced deforestation.
The meeting took place just a few days after the European Commission had started turning up its PR machine in the region. European officials had held briefings for the media, in which they stated “What is important for us to point out is that this law is not a ban on any country or commodity from entering the EU market.”
It’s precisely these types of statements– where the EU behaves as though there is absolutely no reason for exporters to be concerned – that infuriate developing countries such as Indonesia and Malaysia.
The EU briefings have also made it apparent that the EU is drafting local NGOs to advocate EU policies among Indonesian stakeholders.
In addition, the EU is only now beginning to consult with the genuine and important smallholder groups in Indonesia that matter.
As has often been the case, this is all too little too late, and the shift in attitude towards to the EU now goes well beyond palm oil.
Last week, Singapore’s ISEAS released its survey of ASEAN countries and their attitudes towards partner countries, such as the US, EU and China.
In the case of Indonesian and Malaysian attitudes towards the EU:
- The share of respondents stating that the “EU’s stance on environment, climate change and human rights could be used to threaten my country’s interests and sovereignty” increased from 17 per cent to 30 per cent in Indonesia
- In both countries, confidence in the EU being able to champion the global trade agenda has fallen over the past year, with both having greater confidence in China
- In Indonesia, the share of respondents that have little or no confidence on the EU to “do the right thing” increased from 30 per cent to 48 per cent, with the number that have confidence falling from 43 per cent to 37 per cent
There can be zero doubt that the EU’s approach on palm oil has contributed to this significantly. EU policymakers live in constant denial that it’s the country’s largest export, and the region’s largest agricultural export.
As we’ve said many times before: what would happen if a country put significant curbs on European farm exports? There would be a considerable backlash among both the farm sector and the population at large.
And that is precisely what is happening in Indonesia and Malaysia – and potentially further across the region.