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European Parliament votes to approve the Deforestation Regulation (EUDR) as UK joins CPTPP

The European Parliament has voted to approve the Deforestation Regulation (EUDR), as part of a whole range of proposals, including the new CBAM carbon border tariff. The new rules create new trade barriers and bureaucracy for wood imports, and have angered trading partners in South East Asia.

In response, Malaysia’s palm oil sector stated that “the EUDR is unjust and serves primarily to protect a domestic EU oilseeds market that is inefficient and cannot compete with Malaysia’s efficient and productive palm oil exports. The Regulation will increase costs and barriers for Malaysia’s palm oil sector, including 500,000 small farmers. Blocking market access for these farmers would increase poverty, reduce household income and harm Malaysia’s rural communities. In doing so, the EUDR is directly and explicitly undermining the EU’s commitments outlined in the UN Sustainable Development Goals.”

Also the Deputy Prime Minister of Malaysia, YAB Dato’ Sri Haji Fadillah Bin Haji Yusof, complained, saying:

“It is disappointing to witness the European Union withdrawing from the global marketplace and erecting protectionist barriers. This move is woefully misguided, especially as the ASEAN and CPTPP groupings are gaining in influence and attracting new partners from around the world.”

A separate controversy is whether the EU will brand either Malaysia, or some individual Malaysian states as a ‘high risk’ jurisdiction’, something vehemently opposed by the country.

Meanwhile, the United Kingdom managed to strike a deal to enter into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), joining Pacific nations. The news is related, as the UK agreed to remove their previous 12% tariff on Malaysian palm oil to 0%. In response, UK Prime Minister Rishi Sunak, declared: “Joining the CPTPP trade bloc puts the UK at the centre of a dynamic and growing group of Pacific economies.”

In response to green lobbyists criticising the arrangement, former MEP and Chairman of the Independent Business Network, John Longworth, declared: “If the anti-CPTPP campaign thinks that higher food prices are a good idea during a cost-of-living crisis, they have badly misread the room. It is a classic example of misrepresentation of the standards argument.”