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The Good News: Indonesia-UK Roadmap is Back on Track

The UK has just released the details of its UK-Indonesia roadmap, and it maintains its commitment to supporting Indonesia’s sustainable palm oil.

Earlier this year, meetings were held between the UK and Indonesian governments to salvage elements of the roadmap that had stalled. This was principally about the place of palm oil in the agreement, and how palm oil imports in the UK would be managed under its new approach to Due Diligence that aims at ending illegal deforestation.

A major goal for Indonesia was that the ISPO standard – Indonesia Sustainable Palm Oil – would have the opportunity to be recognised by the UK in any future regulation.

The roadmap keeps open this possibility and states that the two countries will:

“Promote regular exchange of information between relevant institutions in Indonesia and the UK to support sustainable production and non-discriminatory, two-way sustainable trade based on mutual respect of national legislation and mutual understanding of standards and certification processes notably on exploring mutual recognition on standards and certification and other approaches, where legally feasible. The initial focus will be on exchanging information on the relevant legal frameworks covering the scope of commerce concerned with the aim of promoting seamless, two-way, non-discriminatory trade.”

This bilateral approach sets the UK apart from the EU in terms of its willingness to negotiate with Indonesia on certification standards.  This is a plus for the UK, and a setback for Brussels.

The UK recognises – like Switzerland – that it cannot simply be tethered to the EU as an export destination and must seek new export and investment markets – such as in Southeast Asia. That is precisely why the agreement is important to the UK as a first step in better trade relations with Indonesia. The UK adopting an ongoing reasonable approach to palm oil, and offering a genuine pathway to ISPO recognition, is critical to the future success of this Roadmap.

The question is whether the European Union will follow the same path. Like the UK, it is seeking to have stronger relationships with countries in the Asia-Pacific region. However, it will need to accommodate the needs of potential trading partners also, just as the UK has done. Adding new trade barriers – like the EU’s proposed Deforestation regulation – to southeast Asian trading partners at a time of ongoing economic crisis is not a positive signal and will not help Brussels to catch up with London.

The Bad News: UK Stalls on Palm Rules That Would Cut Food Prices

The UK has not made all the right moves, however. Its reaction to the food price crisis caused by the Russian invasion of Ukraine has been strange, to say the least.

The UK grows a relatively small amount of vegetable oil, which is almost entirely rapeseed oil with less varied applications in food production. The bulk of the UK’s imported oil is palm oil, followed by sunflower.

Sunflower is currently off the table – due to knock-on effects of the war in Ukraine – as evidenced by companies such as Iceland switching their supply sources to palm.

The UK’s imported vegetable oil situation is therefore critical. And yet – the government is driving up food prices for its food manufacturers and British consumers, by refusing to allow companies to use palm oil instead of sunflower.

According to The Grocer , DEFRA (the Environment Ministry) is once again the problem, erecting costly and bureaucratic barriers to prevent palm oil from being given the same treatment as rapeseed. UK businesses have already been given freedom to use rapeseed as an immediate replacement for sunflower. Palm oil from Indonesia is being denied the same benefit.

This is a clear message: DEFRA is supporting European rapeseed over southeast Asian palm oil. There is no health justification, nor any technical reasoning. It is pure anti-palm oil ideology.

This is bad for UK consumers and their wallets. It’s also bad politics for the ruling political party.

It is a surprise that the UK’s Department for International Trade (DIT) has allowed this to happen: a blatant trade barrier erected by DEFRA against the UK’s key partners in ASEAN.

The UK’s trade strategy in ASEAN has built a solid following, and a groundswell of respect and goodwill. This will be tested if the pro-rapeseed discrimination over sunflower substitution, continues.

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