JAKARTA – Indonesia needs to involve palm oil consuming countries, such as China, India, and Pakistan, in conducting positive campaigns on the palm oil at the global market. It is needed to prevent the European Union Deforestation-Free Regulation (EUDR) from becoming a new obligation that applies globally.
The Institute for Development of Economics and Finance (Indef) Executive Director Tauhid Ahmad said that the steps taken by Indonesia and Malaysia in rejecting the EUDR and pursuing negotiations through the Ad Hoc Joint Task Force on EUDR are the right ones. But in terms of launching the palm oil positive campaigns, Indonesia should also involve other countries, especially the consuming countries.
“Rejecting the EUDR is the right step. But Indonesia still lacks in influencing other countries. Indonesia shouldn’t just invite Malaysia in collaboration to conduct the positive campaigns. There are many consuming countries that can be involved in such endeavor. By involving them, Indonesia can prevent the EUDR from becoming a new obligation that applies globally,” Tauhid told Investor Daily in Jakarta recently.
Tauhid is worried that the implementation of EUDR will not only incur a loss of US$6-7 billion for Indonesia as mentioned by the government, but it will also push other countries outside of the EU to follow such policy that will then permeate into other aspects.
“Actually, the EUDR affects seven commodities. So, it brings negative impacts to Indonesian economy. But the EUDR tends to apply double standards. That’s why Indonesia needs to launch massive positive campaigns, not only on palm oil but also other commodities, by involving the consuming countries of all the affected commodities,” he said.
Besides palm oil, EUDR also targets wood, rubber, cocoa, cattle, soybean, and coffee.
The Oil Palm Plantation Fund Management Board (BPDPKS) has previously stated that Indonesia and Malaysia could no longer urge the EU to revoke the EUDR as it had been decided by the EU. “What can be done now is to persuade the EU to consider the interests of producing countries in the implementations of the EUDR,” he said.
Tauhid said that besides the massive positive campaigns of palm oil, there are at least three other steps that can be implemented by Indonesia in dealing with the EUDR.
First, pursuing negotiations with the EU. “Indonesia needs to have a strong bargaining position. If necessary, it can do retaliatory actions against the EU products entering Indonesian market. It can be implemented through various policies regarding deforestation, supply chain, or certification of sustainability,” said Tauhid.
Like the EU, Indonesia should also have non-tariff standardization for the EU products and other products of other countries that approve the EU steps. It is necessary as the EUDR hinders the free trade. The European countries have also contributed to the climate change as only few industries in the region that go green.
Second, diverting palm oil exports from EU to other regions which do not apply policies like the EUDR, such as Africa, Middle East, and Central Asia. In addition to that, exports to China and India can be increased by strengthening cooperation.
Third, further developing downstream palm oil industries in Indonesia, so that all of its palm oil exports are processed palm oil products. “So, in the future Indonesia’s palm oil exports should be the processed derivative products and no longer the unprocessed crude palm oil CPO,” said Tauhid.
Trade Minister Zulkifli Hasan (Zulhas) said during a meeting with Britain’s International Trade Minister Nigel Huddleston on the sidelines of the 55th Asean Economic Minister’s Meeting and Related Meetings in Semarang, Central Java on 20 August 2023, that Britain’s environmental policies should not cause negative impacts to Indonesia’s exports of agricultural and forestry products.
“Currently, Indonesia’s exports of CPO and papers to Britain are not affected. We hope Britain will accept our certifications of timber legality verification system (SVLK) and Indonesia Sustainable Palm Oil (ISPO),” Zulkifli said.
17 countries’ letter
Indonesia’s foreign ministry reported that 17 like-minded countries filed a letter of mutual concern to the EU leaders regarding the implementation of EUDR. Initiated by Indonesia and Brazil, the joint letter was signed by the 17 countries at Indonesia’s embassy in Brussel on 07 September 2023. The 17 countries are Indonesia, Brazil, Argentina, Bolivia, Ecuador, Ghana, Guatemala, Honduras, Colombia, Malaysia, Mexico, Nigeria, Ivory Coast, Paraguay, Peru, Thailand, and Dominican Republic.
The 17 countries stated that the EUDR has not yet considered the local condition and capacity, national product legislation, national certifications, national efforts of reducing deforestations, and multilateral commitments of the commodities producing countries, including the common but differentiated responsibilities. The EUDR is also seen to have created a discriminatory and punitive system of benchmarking, which is against the stipulations set by the World Trade Organization (WTO).
The producing countries urge the EU leaders to involve the affected commodities producing countries in formulating the implementing regulations and guidelines of the EUDR.
The letter also contains the issues that should be considered by EU in designing the implementing regulations of the EUDR, including efforts of improving public welfare through sustainable development amid the limited access of financing, technology, technical training assistances. (*)
Source: investor.id
