The Palm Scribe

Palm Oil Issue Stays in IEU-CEPA Negotiations: Indonesian FM

The Indonesian government will continue to include the issue of palm oil in the ongoing negotiations for the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) despite the hopes of the Association of Indonesian Palm Oil Producers (GAPKI) to separate it so as to allow a quick agreement to be reached and thus not hinder exports of other Indonesian commodities to the EU market.

“We are also concentrating on IEU-CEPA. We are only ascertaining that palm oil will become one of the elements negotiated with the European Union,” Foreign Minister Retno Marsudi was quoted by Okezone.com as having said at a national meeting of the Indonesian Chamber of Commerce and Industry on Tuesday (19/11).

GAPKI Secretary-General Kanya Lakshmi Sidarta had told The Palm Scribe that producers would like that the discussion on palm oil be separated from the current IEU-CEPA negotiation so that an agreement could be reached soon and benefit the other Indonesian export commodities. The issue of palm oil exports to the European Union has been dragging down the negotiation for the trade partnership agreement.

“We all need to sit down and formulate the best way to accommodate business and diplomacy because both are needed for a strong Indonesian diplomacy,” staff expert for the foreign ministry, Ina Krisnamurthi told The Palm Scribe on the idea of separating palm oil issue from IEU-CEPA agreement.

The European Union plans 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.

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.

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