BRUSSELS: The government will fight any discriminatory trade practices against Malaysia’s commodities sector, says deputy prime minister and plantation and commodities minister Fadillah Yusof.
As a producing and trading country, Malaysia is deeply concerned over the EU’s implementation of its deforestation regulation (EUDR) law and the implications it has on palm oil, timber, cocoa and rubber, Fadillah said.
The minister is on a Malaysia-Indonesia joint trade mission to the EU to defend the palm oil industry.
“Some aspects of the risk-assessment process of the regulation are counterproductive to commitments to curb global deforestation and run the risk of disincentivising producing countries,” he said in Brussels today.
Fadillah said the EUDR, which came into effect on Dec 6, was based on weak scientific data.
“It places additional burdens on Malaysian palm oil exporters to the EU market, specifically on the additional traceability requirements and data that must be provided to end-customers based in the EU,” he said.
The EU accounts for 9.4% of Malaysia’s total palm oil exports or 1.47 million tonnes in 2022.
Fadillah said Malaysia values the EU as one of its important trading and investment partners.
Such a unilateral initiative, he said, is detrimental to free and fair trade and could adversely impact the global supply chain, lead to higher food prices, and reduce output at a time of record global inflation.
“We have embarked on sustainability initiatives, including national certification schemes with a view to facilitating access into the EU single market,” he said.
Fadillah said the Malaysian Sustainable Palm Oil (MSPO) standard already guarantees Malaysia’s commitment to comprehensive sustainability standards.
Therefore, he said, there is no need to add further costs and burdens to the industry, particularly to the smallholders.
He added that the commodities sector was key to alleviating poverty and reviving the Malaysian economy following the impact from the Covid-19 lockdown.
“This ministry is essential in spearheading the commodities trade and ensuring the sector is well-governed, particularly in protecting the livelihood of more than 700,000 smallholders with our initiatives and efforts, and at the same time, during these challenging times, providing job and business opportunities along the supply chain,” he said.
Hence, Fadillah said, the government will remain steadfast in mitigating these challenges and fighting baseless allegations.