Malaysia says Nor­way move to ban palm-based biodiesel could hin­der EFTA trade talks

Business a.m. - - COMMODITIES & AGRICULTURE -

NOR WAY’ S PLANS TO ban bio­fu­els con­tain­ing palm oil from 2020 are set to pro­vide a ma­jor ob­sta­cle to long-run­ning trade talks be­tween the Euro­pean Free Trade As­so­ci­a­tion (EFTA) and Malaysia, a Kuala Lumpur gov­ern­ment min­is­ter said on Fri­day.

A Nor­we­gian par­lia­ment rec­om­men­da­tion to ban biodiesel “with high de­for­esta­tion risk” was in­cluded in a bud­get for EFTA mem­ber Nor­way ap­proved in Oslo ear­lier this month.

Reuters says palm oil is used as feed­stock for the mak­ing of biodiesel, as well as in ev­ery­thing from cook­ies and soap to lip­stick. The palm oil in­dus­try is often linked by en­vi­ron­men­tal groups with de­for­esta­tion and dis­place­ment of wildlife and indige­nous com­mu­ni­ties.

“The stand taken by Nor­way against palm oil will ad­versely af­fect bi­lat­eral trade re­la­tions be­tween Malaysia and the Euro­pean Free Trade As­so­ci­a­tion,” Malaysia’s pri- mary in­dus­tries min­is­ter Teresa Kok said in a state­ment. Malaysia’s last round of trade ne­go­ti­a­tions with EFTA was in May 2017.

“We view this as un­fair and un­just, go­ing against free and fair trade, and is cer­tainly not some­thing we will take lightly,” said Kok, adding that it would be a ma­jor ob­sta­cle to­wards a suc­cess­ful con­clu­sion of part­ner­ship talks.

Last week, Kok also com­plained that a move by the French par­lia­ment to ex­clude palm oil as an ap­proved biodiesel feed­stock was an un­wel­come de­ci­sion that went against free trade and would im­pact the liveli­hood of Malaysian farm­ers.

Ear­lier this year, Malaysia and Indonesia crit­i­cized the Euro­pean Union for back­ing a ban on the use of palm oil in bio­fu­els from 2021. Indonesia and Malaysia pro­duce nearly 90 per­cent of global palm oil.

EU ne­go­tia­tors later agreed that palm oil usage in trans­port fu­els would be capped at 2019 lev­els un­til 2023, and re­duced to zero by 2030.

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