How the EU’s Green Deal could help trigger a historic EU-ASEAN trade deal

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Kok: "For Malaysia’s new reformist government, the initiative has special resonance because we are implementing something of a Malaysian Green Deal of our own - with conservation and sustainability central pillars in the Government’s recent economic policies, especially in relation to palm oil." [Shutterstock/KYTan]

There has been much fanfare over the EU’s new Green Deal, a three-decade plan to make the EU climate neutral by 2050. Lauded as “revolutionary”, “visionary” and a “game-changer”, it has been applauded across the globe. Understandably so: the stated goals are nothing short of commendable, writes Teresa Kok.

Teresa Kok is Malaysia’s Minister for Primary Industries.

For Malaysia’s new reformist government, the initiative has special resonance because we are implementing something of a Malaysian Green Deal of our own – with conservation and sustainability central pillars in the Government’s recent economic policies, especially in relation to palm oil.

Concerned about deforestation, my government took the unprecedented step of declaring a moratorium on palm oil expansion to protect forest cover at 50% and committed to enforcing mandatory sustainability standards across for 100% of Malaysia’s palm oil production – a first for any nation.

We have also made sustainable palm oil certification obligatory for producers based on stringent regulations to ban forced labour and open burning, using renewable energy, protecting the habitat for wildlife conservation, and avoiding encroaching into rainforests.

To date, 70% of all Malaysian palm oil cultivated areas are officially certified. Of course, there is still much work to do. The other 30% of palm oil producers represent the hundreds of thousands of smallholder farmers who still find it difficult to comply with the new standards due to costs involved.

But we are working hard to incentivise them through funding and loans. Moreover, we believe our efforts should not end with certification. Palm oil cultivation and conservation efforts must go hand-in-hand.

This is why we are supporting reforestation programmes like the one million forest tree planting initiative in the Ulu Segama-Malua Forest Reserve in Sabah – the first of many proposed sites.

But making these changes has been an uphill struggle. Just months after announcing our sustainability commitments the EU proposed banning palm oil for biofuels. In doing so, EU leaders may not have realised the message they were unwittingly sending third-world smallholder farmers – that their efforts to become sustainable are irrelevant.

And that this industry through which so many are trying to lift themselves out of poverty must be destroyed to save the planet.

But scientific reports prove the complete opposite. The ban will actually worsen deforestation and climate change. Scientific studies from the International Union for the Conservation of Nature and Oxford University prove that boycotting palm oil will shift demand to less efficient EU grown crops, like rapeseed, corn or soy, which use far more land, water and fertiliser.

The end result, they warn, is the expansion of Europe’s own biofuels industries as a result of them being protected from more resourceful foreign competition, something that will drive greater levels of deforestation and species extinction in the process.

Herein lies the real elephant in the room. Agricultural and biofuels special interests within the EU have long been able to sway EU policy, in effect using flawed environmental justifications to safeguard their own business interests against foreign competition – even (ironically) at the expense of the environment itself. I hope the EU’s new Green Deal is a commitment to tackling this trend.

A better and greener solution to the palm oil issue lies in supporting sustainable production. Sustainable land use experts like Professor Martin Persson of the Chalmers University of Technology agree, saying “Palm is actually a fantastic crop in principle. It uses far less land than other vegetable oils.

In theory, there is plenty of already cleared land to grow commodities like palm oil and soy, or to host cattle—so we need incentives and regulations to ensure that companies adhere to proper sustainability criteria.”

The true litmus test then for the EU’s new Green Deal, is whether it can push back against the Bloc’s special agricultural and biofuel lobbies that have helped create a black and white approach to the palm oil issue.

Doing so could not only encourage positive environmental impact far from the EU’s own borders but could also overcome the one major obstacle that has prevented a historic EU-ASEAN trade deal – an uncompromising EU position on banning palm oil form biofuels.

An EU-ASEAN trade deal could be a game-changer for both regions. By 2030, the ASEAN will become the world’s fourth-largest single market. And by 2060 the Asia-Pacific accounting for some 90% of the 2.4 billion new members of the middle class entering the global economy.

Staying true to the spirit of the EU Green Deal by acknowledging the value of sustainable production could, far from killing off any hope of an EU-ASEAN trade deal, be the very thing that makes it possible.

This would truly be a win-win for all. It would mean the EU helping Malaysia become the world’s first truly sustainable palm oil producer and an example for others on how to end deforestation and mitigate climate change.

It would also give the EU and the world access to a truly sustainable and more competitively-priced source of biofuels to facilitate the clean transport revolution.

And it would open up access to lucrative trade ties at a time of slow EU growth for the EU, all the while, making the vision of an EU Green Deal come alive thousands of miles from EU borders.

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