Indonesia is about to call off preparations for a free trade agreement with the EU. Instead, the country wants to take the EU to the WTO court for its decision on palm oil imports and is also accusing the EU dairy industry of illegal subsidies.
In spring, the EU Parliament declared that the production of palm oil contributes to the deforestation of tropical forests and is therefore not sustainable. Biodiesel based on palm oil is to be banned in the EU by 2030.
The trade minister of Indonesia said that without palm oil, there would be no CEPA. CEPA is the abbreviation for Comprehensive Economic Trade Agreement, the trade agreement between the two economic blocs.
The market for biodiesel in the EU is estimated at EUR 9 billion. Indonesia supplies palm oil worth 400 million euros annually for this purpose.
Brussels says that the complaints before the WTO court have nothing to do with the trade agreement.
Source
HANSA Terminhandel
