Indonesia is mulling retaliatory steps against the European Union should the regional organization go ahead with the palm oil import ban policy from its renewable energy program, a senior official and several observers are saying.
Vice President Jusuf Kalla was quoted in a report uploaded on the official website of the Indonesian Association of Palm Oil Producers ( GAPKI) as saying that the government continued efforts to keep access open for Indonesian palm oil in the European Union market.
Kalla who was said in the report as speaking during a visit to Manado on March 19, 2018, said that one of the retaliatory measures against the European Union would be to stop buying EU-made aircraft.
In January, the palm oil import ban policy has been decided by the European Parliament by 2021 and cap crop-based biofuels at the member states’ 2017 consumption levels and no more than 7% of all transport fuels until 2030.
Fadhil Hasan a senior economist at the Institute for Development of Economics & Finance (Indef), fully backed Kalla’s threat. “It should indeed be like that. The government must be firm. We should not follow our CPO product be discriminated against by Europe palm oil import ban. If in 2021, the European Union halt its CPO imports from Indonesia for its biodiesel, Indonesia must retaliate, we should not import products from the European Union,” Hasan said in the report.
Hasan however, said that the retaliatory move should only be taken should efforts to bring the case to the World Trade Organization (WTO) fail to be fruitful.
Core Indonesia Research Director Mohammad Faisal also echoed Hasan, saying the retaliatory moves should only be taken as a last resort and that the best way to solve the situation was through a “win-win solution” in negotiations, and that retaliation should only come after failure to get any result from the WTO.
Indonesia, Faisal added, could also negotiate through the ongoing talks on the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA). He pointed out that the plan to phase out Indonesian palm oil imports were still at the resolution phase and still needed to get the approval of the European Community to become effective.
Meanwhile, Deputy House Speaker Bambang Soesatyo was also quoted in the same report as calling on the government to fight the negative campaign targeting Indonesian Crude Palm Oil (CPO).
Subscribe to our newsletter
Stay on top of the industry's news because your informed opinion matters to the palm oil industry.