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Tensions between EU and South East Asia during EU-ASEAN Summit

At the EU-ASEAN Summit last week, Indonesian President Jokowi (picture) lashed out at the EU, issuing a warning related to the EU’s new Deforestation Regulation, suggesting that the EU should not attempt to dictate its standards to ASEAN if it wants to maintain its relationship with Indonesia going forward.

He said:

“There must be no coercion, no more parties who always dictate and assume that my standards are better than yours.”

Indonesian Foreign Affairs Minister Marsudi added that the Regulation will “hinder trade” and is “discriminatory in nature”, warning this would “hamper Indonesia’s commodity exports.”

The tensions come as the EU is keen to open up trade with ASEAN.

Indonesia is reportedly already fostering new relationships, as it announced last week it will negotiate a new FTA with the Eurasian Economic Union, as Indonesia is also building deeper economic and strategic ties with the U.S.

The deforestation regulation threatens to impose a lot of bureaucracy on palm oil imports into the EU, thereby hurting small family businesses. Both Indonesia and Malaysia are major palm oil exporters.

Opponents of the EU’s new rules for trade have described it as the EU imposing its own standards on trading partners, precisely at a time when palm oil deforestation in Indonesia, Malaysia and Papua New Guinea has fallen to its lowest level since 2017, according to the think tank Chain Reaction Research (CRR). Back in Malaysia, the palm oil industry is also dealing with this, as Malaysian companies like Sime Darby, the world’s largest producer of certified sustainable palm oil, has announced a commitment to being net-zero by 2050 in a bid to have a more sustainable future. The company also plans to reforest a 400-hectare (ha) area of peat plantations in Sabah and Sarawak.

Accusations are rife that protectionism is really behind the EU’s new regulatory drive, especially as squeezing palm oil altogether out of the supply chain would worsen deforestation, given that alternatives produced in Europe, like sunflower or rapeseed oil, require more land, water and fertilisers.

In contrast to the EU, the UK requires products to be in line with the local regulations, thereby effectively applying the principle of mutual recognition.


Picture Copyright: By Ministry of State Secretariat of the Republic of Indonesia (Kementerian Sekretariat Negara Republik Indonesia) – Official website of Indonesian President, Public Domain,