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European Union Wants Trade War: No Need to Worry about

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European Union Wants Trade War: No Need to Worry about

InfoSAWIT, JAKARTA – European Union (EU) officially announced open trade war with Indonesia and Malaysia by publishing European Union Deforestation Regulation (EUDR). It was announced on 6 December 2022. The policy would officially be implemented by the early of 2025. It obliges all operators and traders dealing with products and its derivative products from seven commodities, for instance, livestock, cocoa, coffee, palm oil, soyoil, and wood, should have due diligence extensively to their supply chains.

The main goals of EUDR are about to protect forests, and prevent deforestation in the world. The same policy is implemented in some countries and regions, such as, United Kingdom and United States of America.

But, in specific for palm oil, EU has conducted black campaigns for too long. In the 1900s, they accused palm oil as the commodity that consumed much water and not healthy one. In 2004, they established Roundtable on Sustainable Palm Oil (RSPO) as the way to postpone palm oil export to EU by saying the environment as the reason. By EUDR, they re-launched the obstacles openly to press out Indonesia and Malaysia.

From the history, what EU has done may be taken as the righteous and most powerful act. It is no doubt that EU, such as, United Kingdom, Netherland, France, and Portuguese, known as colonials, needs materials from their colonial countries.

Europe and America always consider that Indonesia is in lower class. This opinion must be fought. EU countries are actually poor in natural resource and should get materials to Africa, Asia, even Australia and America. They may think that Indonesia and Malaysia could be pressed as what they like. Nevertheless, barriers, such as, the policy published by EU, are actually fragile and easily broken down.

Indonesia dan Malaysia master about 80% of palm oil production in the world. Indonesia produced 46,9 million tons and Malaysia produced 18,7 million tons of palm oil. It is used for biodiesel production and in this very short, it would be used to produce palm oil gasoline. It means without selling it to Europe, there is no issue for Indonesia and Malaysia (at all).

Indonesia is the pioneer to produce biodiesel and palm oil gasoline. Europe would get the loss if the mining exports, such as, nickel, and coal would stop being exported. This could stop many industries to operate in the continent. There could be massively unemployed. Europe should seriously think if the continent wants to have war trade with Indonesia.

Indonesia should get offended for EU wants to regulate the forests in Indonesia. Forests and environment in one country are the rights of one country itself, in this case, Indonesia and Malaysia. EU has no rights on the two. Indonesia is the independent country, not European’s colonial country. Indonesia should be brave and firmly rejected other country’s business in Indonesia’s domestic businesses.

It is the best time to re-manage the exports without dealing with Singapore because it depends on Indonesia and Malaysia. Singapore may always protect corruptor from Indonesia and the allay of Israel in Southeast Asia. Ministry of Trade and Ministry of Transportation should prepare something to support direct exports, minimize dependence on Singapore, and reinforce economic sovereignty of Indonesia.

By having strategic things, Indonesia and Malaysia could avoid the challenges from EUDR and would reinforce their position in the markets globally. (*)

By: Memet Hakim /ETCAS Consultant, Senior Agronomist

Disclaimer: this article is a personal opinion and the writer himself is in charge on it, and also has nothing to do with InfoSAWIT.