Indonesia set for palm-oil boost in EU trade deal
The EU and Indonesia have concluded talks on a free-trade deal that includes zero tariffs on palm oil exports from the South East Asian country.
The draft agreement, described by EU Trade Commissioner Maroš Šefčovič as “a game-changer for both our economies”, removes Indonesia’s duties on certain EU agri-food products.
EU farming lobby groups Copa and Cogeca welcomed the deal, which will head to the European Council and European Parliament for approval.
However, the zero-tariff rate on Indonesian palm oil has attracted criticism in campaign circles.
Under the agreement, palm oil from Indonesia will face zero tariffs within a defined quota. EU tariffs on all palm oil imports range up to 12.8%. Much of Indonesia’s palm oil shipments to the EU already face a 0% tariff, Just Food understands.
The EU said the so-called Comprehensive Economic Partnership Agreement, announced yesterday (23 September), includes a “protocol” on palm oil, “geared towards maximising the potential of CEPA to support trade in sustainable palm oil”.
In a statement, the EU said: “It does so by establishing a platform for dialogue, including on regulatory developments of relevance for the palm oil sector, and creating a framework to work more closely together in areas of specific importance for the sustainability of palm oil production.”
Reacting to the news of the agreement, Eddy Martono, chairman of the Indonesian Palm Oil Association (GAPKI), said the deal was “good news” but he expressed concern about the EU’s planned deforestation regulations, or EUDR.
“The IEU-CEPA is good news but if the EUDR cannot be fulfilled, then zero tariffs are useless. Our exports will still be hampered,” Martono said in a statement.
In a separate announcement yesterday, the European Commission, the EU’s executive arm, said it would propose another delay to EUDR coming into force.
The regulations were set be implemented in December after already being pushed back.
Under EUDR, companies marketing products including cocoa, coffee and palm oil, as well as foods that contain the ingredients, in the EU will have to demonstrate their supply chains are free from deforestation-related impacts.
EUDR, first announced in 2021, was originally due to be enforced on 30 December this year but the Commission faced pressure from parts of the food industry to extend the deadline. Brussels agreed to a one-year delay last December.
IT problems have now led the Commission to put forward plans for another postponement of one year.
Fern, an NGO working to protect forests and the rights of forest peoples, hit out at the deal between the EU and Indonesia and the prospect of another delay to EUDR.
