Malaysia draws battles lines with EU over palm oil, focusing on public relations blitz

Government complaint filed at WTO says Europe’s anti-palm oil measures create ‘unreasonable trade barrier’

But analysts said that to win the battle at the WTO, Malaysia must up its PR game and show it has eliminated abuses within the industry

4-MIN READ4-MIN

Palm oil fruits from a plantation in Pulau Carey, Malaysia. Photo: Reuters

Published: 2:00pm, 31 Jan 2021Updated: 12:35pm, 1 Feb 2021

Even as Malaysia struggles to contain a pandemic that has wrought significant damage on its economy, it now faces a potentially greater fiscal challenge: defending its main cash crop – the oil palm – against European Union efforts to stifle the consumption of palm oil-based biofuels.

But in order to win the battle and safeguard its status as the world’s second-largest producer of palm oil, Malaysia must first make a more persuasive argument for its continued use as a sustainable product, which analysts said it could do by clearing up misperceptions surrounding the industry and opting for a more forward-looking public relations strategy.

The government recently filed a complaint with the World Trade Organization, charging that the EU – in particular France and Lithuania – had imposed anti-palm oil measures that contravene WTO rules as part of the bloc’s effort to move towards other renewable energy sources. The United States has also taken a firm stance towards Malaysia-produced palm oil, citing labour abuses within the supply chain.

In filing the complaint, Plantation Industries and Commodities Minister Khairuddin Aman Razali criticised the EU for its stance, saying in a statement earlier this month that it had failed to consider Malaysia’s views on the matter, despite the country giving feedback and deploying economic and technical missions to Europe to find a resolution.

The EU’s imposition of anti-palm oil measures – it has classified palm oil as having a high risk of displacing food crops – amounted to discriminatory action against Malaysia‘s most valuable commodity crop, he said.