ASIATODAY.ID, JAKARTA – Indonesia won the trade dispute over European Union (EU) discrimination against Indonesian palm oil at the World Trade Organization (DSB WTO) Dispute Settlement Body.
Indonesian Trade Minister Budi Santoso said that the government welcomed the WTO Panel’s decision on January 10 2025 on the trade dispute related to palm oil which had been fought several years ago.
“The Indonesian government welcomes the WTO Panel’s decision on the palm oil trade dispute with the European Union which is linked to the issue of climate change, as a basis for the European Union not to be arbitrary in implementing discriminatory policies,” he said in an official statement, quoted on Friday, January 17 2025. .
Budi hopes that other trading partner countries will not implement similar policies that have the potential to hamper global trade flows, especially palm oil.
In general, the WTO Panel stated that the EU discriminated by giving less favorable treatment to biofuels made from palm oil from Indonesia compared to similar products originating from the EU such as rapeseed and sunflowers. The EU has also been proven to differentiate treatment and provide more benefits to similar products imported from other countries, such as soybeans.
In addition, the WTO Panel assessed that the EU failed to review the data used to determine biofuels in the high ILUC-risk oil palm land conversion category and there were deficiencies in the preparation and implementation of low ILUC-risk certification criteria and procedures in the Renewable Energy Directive (RED) II.
Therefore, the EU is obliged to adjust policies in the Delegated Regulation which the Panel views as violating WTO rules.
“Indonesia sees this policy as a form of protectionism under the pretext of using the issue of environmental sustainability which is often raised by the EU,” said Budi Santoso.
In December 2019, Indonesia sued the EU for the first time at the WTO with case number DS593: European Union-Certain Measures Concerning Palm Oil and Oil Palm Crop-Based Biofuels. The lawsuit covers the EU’s RED II and Delegated Regulation policies, as well as French policies which are obstacles to market access for palm oil as a raw material for biofuel.
These obstacles relate to limiting the consumption of biofuel made from palm oil at 7%, the high ILUC-risk criteria, and provisions for phasing out the use of biofuel made from palm oil as raw material (phase out).
Furthermore, based on WTO regulations, if there are no objections from the parties to the dispute, the panel report will be adopted within 20-60 days after it is circulated to WTO Members. Thus, the report is binding on Indonesia and the EU.
As a result, the EU will then take the necessary steps to comply with its obligations in accordance with the WTO Panel decision. (AT Network)
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