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Developing Countries Take Aim At EU’s Deforestation Regulation

Tomorrow, EU Parliament MEPs in Strasbourg, France will vote on the EU Deforestation Regulation. The EU Parliament, Council and Commission will then enter trilogue negotiations to determine the final text of the regulation.

However, on the eve of the vote it is now clear that the Deforestation Regulation in its current form is a non-starter for some of the EU’s most important trading partners, including Indonesia.

Indonesia Palm Oil Facts has obtained a copy of a letter from a coalition of developing countries that raises serious objections to the EU’s proposed ‘Deforestation Regulation’ that will place trade bans on products European ‘claims’ are linked to deforestation.

The 14 countries signing the letter include the regional economic powerhouses Indonesia, Brazil and Nigeria – the largest economies in their respective regions – as well as Argentina, Colombia, Ghana, Guatemala, Ivory Coast, Paraguay, Peru, Honduras, Malaysia, and Ecuador.

This amount of signees is unprecedented opposition to an EU proposal from major developing economies, and calls into question the EU’s image of itself as a reliable partner and a responsible global actor.

Joko Supriyono, Chairman of the Indonesian Palm Oil Association (GAPKI) commented on the development:

“This unprecedented joint action from palm oil producing countries sends a clear message to Brussels. This proposal is a protectionist ploy aimed at blocking palm oil imports and must be abandoned. The European Union should pursue genuine cooperation with producing countries to ensure business and consumers have access to essential foods at low prices and high sustainability standards. The current regulation does not achieve this; in fact, it would increase prices.”

The potential designation of many commodity-producing countries as ‘High Risk’ for deforestation, within the Deforestation Regulation, is a political protectionist tool with the goal of undermining those countries’ exports. The designation will make it more difficult, and more expensive, for those countries to export their commodities to the EU. The ‘High Risk’ designation is unjustified in reality (the EU has produced no evidence to support it), and is undignified language to use with regard to friendly trading partners. In other words, its antithetical to European Values.

The letter, signed by each country’s representatives in Brussels, is addressed to the heads of the European Council, Parliament, Commission, and the Council of the EU.

It specifically calls out the European Union for:

  • Failing to consult meaningfully with developing countries on the regulation;
  • Ignoring the objectives of both the Paris Agreement and the Sustainable Development Goals; and
  • Disregarding efforts by developing countries against deforestation.

The letter also says that the regulatory measures proposed by the EU are “inherently punitive” and will likely “generate trade distortion and diplomatic tensions without benefits to the environment.”

It goes further, stating that the trade restrictions will “lead to a downward spiral of trade distortion, reduced trade opportunities and increased impoverishment.”

Finally, the countries call on the EU to engage in a “substantial, genuine and constructive” consultation.

It is understood the letter was sent in July, and the European Union representatives have not yet responded.

The letter expresses clearly that relationships with multiple developing nations, will be harmed by such overtly discriminatory regulating. The EU has an incomplete trade agreement with Mercosur (which includes Argentina, Brazil, Paraguay) as well as ongoing negotiations with Indonesia that are complicated by the EU’s hostility to palm oil.  Nigeria’s largest non-petroleum export to the EU is cocoa, which will be part of the regulation.

The EU is also poised to announce a EU-ASEAN Leaders’ Summit in December. It has stated that it is seeking to expand trade in Southeast Asia. The regulation will no doubt be high on the agenda for ASEAN’s key economies. This week’s vote will be a bellwether. It will give ASEAN a much clearer indication of how much the EU actually values its trade and its cooperation.

In the meantime, Jakarta, Brasilia and Lagos will be watching Brussels very closely.

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