Malaysian Prime Minister YAB Dato’ Seri Anwar bin Ibrahim made palm oil one of his key issues during his visit to Indonesia this week to meet with Indonesian President Joko “Jokowi” Widodo.

Diplomatic Debut Affirms Strong Commitment to Palm Oil

The two leaders met to discuss collaboration between the ASEAN nations on global challenges they will face in the coming months as well as “economic cooperation and regional security issues.”

Palm oil is right at the top of the priority list. According to reports recapping the visit, Malaysia and Indonesia “have agreed to build stronger collaboration to further develop the palm oil market and to combat discrimination against the commodity.

The target of the message was clear: Brussels, and its recently-passed discriminatory Deforestation Regulation.

YAB Prime Minister Anwar also affirmed Indonesia’s position as a valuable partner to Malaysia, noting “Indonesia has a special place in my heart,” and proudly stating “I believe I made a good decision, choosing Indonesia as my first foreign trip.”

The beginning of a new era of cooperation and partnership to oppose the EU’s anti-palm oil efforts is a very positive outcome from this trip. The EU must surely soon realise that pursuing a path of discrimination against two of the largest economies in Southeast Asia is an inadvisabe approach to global diplomacy, and harmful to the bloc’s export-driven economic model.

Malaysia Threatens EU Access to Palm Oil Market

Just days after YAB Prime Minister Anwar’s visit, rhetoric from the Malaysian government on the EU Regulation grew stronger yet. Malaysian Deputy Prime Minister YAB Dato’ Sri Haji Fadillah Bin Haji Yusof, speaking at the Palm Oil Economic Review and Outlook Seminar 2023, noted that it was on the table for Malaysia to “to stop exporting to Europe, and focus on other countries, if they keep making it difficult for us.” He then echoed YAB Prime Minister Anwar’s spirit of cooperation, adding “Malaysia will involve Indonesia in the discussion.

The warning from YAB Deputy Prime Minister Fadillah comes just weeks after he first issued scathing criticisms of the EU’s dictates, calling the Regulation  “a deliberate act by Europe to block market access, hurt small farmers and protect a domestic oilseeds market that is inefficient & cannot compete with the cost of palm oil,” and then this week echoed his criticisms by noting the EU’s constantly changing goalpost appears like it’s a trade barrier to protect their products.

Malaysia says EU Deforestation Regulation “against good kinship”

Malaysia’s Foreign Minister Zambry Abdul Kadir also visited Jakarta earlier this month to discuss “regional and global challenges” and made strong statements about Malaysia and Indonesia’s partnership that promises to be jointly opposed to dictates from the EU.

Foreign Minister Zambry’s visit came just weeks after President Jokowi made clear the Deforestation Regulation is counter to a trustworthy, mutually beneficial relationship between ASEAN and the EU. His comments amounted to a call for EU leaders “to be just in their policies and refrain from imposing their ideals on developing countries.

Foreign Minister Zambry stated there was an opportunity for Malaysia and Indonesia to form a strong, united front and supported President Jokowi’s statements.

The EU deforestation policy is a step against good kinship. Jokowi’s speech has made it clear that […] the policy is of concern to ASEAN. That the EU cannot dictate. This is an opportunity for Indonesia and Malaysia to join forces and be united in our voices. We stand with Jokowi on this matter.

EU Silent as ASEAN Loudly Rejects Mandates

As the Parliament, Council and Commission trickle back to Brussels following a long holiday, EU leaders have been notably silent on comments coming from the ASEAN bloc and are yet to address glaring concerns raised by prominent political figures from both Malaysia and Indonesia.

Of particular concern for Malaysia and its palm oil industry is the EU’s proposed designation of Malaysia as a “High-Risk” country for deforestation. Such a designation fails to acknowledge progress the Malaysian government and palm oil industry have made in reducing deforestation levels effectively to zero. “It would be offensive to Malaysia if either palm oil, or the country, is designated high risk by the EU Regulation,”stated YAB Deputy Prime Minister Fadillah, adding “There is no justification” for the designation given Malaysia’s successful efforts to reduce deforestation.

The longer the EU remains silent on criticism raised by their most important trading partners in the region, the more tense the EU-ASEAN relationship grows. This helps no-one, especially not the EU member states who constantly search for new and expanded export markets.

When will EU leaders respond? Will their reaction be measured and reasonable? Or will they cast aside the ASEAN concerns and proceed with dangerous protectionist dictates at the risk of losing valuable trade partners for good?