The Association of Indonesian Palm Oil Producers (GAPKI) wants the discussions on crude palm oil and its derivatives be separated from the main negotiations for the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) so that an agreement could be reached soon and benefit the other Indonesian export commodities.
“If we had the authority, of course, we will separate the discussions on palm oil rather than pose a hindrance to the trading of other commodities because the negotiations on palm oil drag on,” GAPKI Secretary-General Kanya Lakhsmi Sidarta told The Palm Scribe in a message.
The ongoing IEU-CEPA negotiations with the European Union have been dragging on because of, among others, the deadlock in the discussions concerning palm oil and its derivative, in relation to the European Union plan to gradually drop palm oil-based biofuels from its transportation renewable energy program. The European Union’s Delegated Act-RED II argued that the basis for the policy was because palm oil was deemed to be the main cause of massive deforestation taking place in producing countries.
Indonesia, including GAPKI, has accused the European Union of discriminating against CPO of which Indonesia is the world’s largest producer. An internal document of the EU on the Delegated Act-RED II that was allegedly leaked to the public also showed that the regional organization planned to put soybean oil, along with oil from sunflowers and rapeseeds that is produced by its member countries, as sustainable oil. Soybean is supplied by the United States, an important trade partner of the European Union.
The government, which has targeted the agreement to be completed by 2020, is currently seeking ways to accelerate the process, including by considering whether to temporarily separate CPO discussion from the main negotiations. Deputy Foreign Minister Mahendra Siregar was reported by Indonesian media has having said that Indonesia was planning to review the chapter on sustainable development, especially in relation to CPO, in the IEU-CEPA negotiations.
“The steps were taken by the government, including negotiating the points that are deemed to be unfair is a right. The firm stance of the government will greatly provide great encouragement for the sake of the sustainability of the business in the future,” Lakhsmi said.
A number of media reports have said that there had been complaints from businessmen in sectors other than palm oil, who all hoped a speedy completion of the IEU-CEPA agreement. Indonesian exports of CPO and its derivatives to the European Union brought in $2 billion last year but the amount was just 11.8 percent of revenues from total Indonesian exports to the regional grouping which reached $17 billion last year. Other main Indonesian exports to the European Union include textile products, shoes, furniture, and fishery products.
Lakhsmi said that if the government did indeed manage to get the separation of discussions over CPO from the main negotiation process of the IEU-CEPA, all players in the Indonesian palm oil sector “would follow.”