Win at WTO: Malaysia must now devise negotiating strategy

KUALA LUMPUR: Malaysia’s recent win against the European Union (EU) over the Renewable Energy Directive (RED II) and the related Delegated Act, which has been ruled to discriminate against oil palm cropbased biofuels, is a fine example of a well-coordinated action plan among Malaysian ministries, organisations, and agencies.

In the case before the World Trade Organisation (WTO), the country was represented by Malaysia’s Attorney General Chamber (AGC) and assisted by Fratini-Vergano – European Lawyers, a law firm specialising in international trade, dispute settlement and trade negotiations.

While we celebrate this important legal victory, which vindicates Malaysia’s long struggle to defend the good name of its sustainable palm oil production, Putrajaya now needs to keep the momentum going by defining an action plan with a pragmatic and effective negotiating strategy to protect its interests in a wider spectrum.

To recap, the WTO Panel Report last week found fault with the EU’s use of the indirect land use change (ILUC) mechanism to cap and progressively phase out palm oil-based biofuels from the EU market and its approach to notifying and consulting with other WTO Members when introducing new measures that stand to have significant trade restrictive effects.

However, while the EU would need to make adjustments based on the final Panel Report unless appealed, it need not withdraw the measure of phasing out palm oil-based fuels by 2030, as the trade bloc no longer considers them as renewable transport fuel.

“The changes that the EU will have to bring to the RED may provide some continued access to Malaysian palm oil as a feedstock for the production of biofuel to the European market,” said an expert on the subject matter.