Some French and Belgian food firms have taken to labelling products ‘no palm oil’ - something that sought to inform consumers who may want to avoid palm oil for environmental or perhaps health reasons. Yet legal experts say this could be in violation of EU law and pose a scientifically unjustified barrier to trade.
Meeting with European journalists as part of a week-long press trip around Malaysia organised by the Malaysian Palm Oil Council (MPOC), he said these labels were unfair, baseless and a deliberate effort to hinder the palm oil industry.
Yet he said dialogue, not counter trade barriers against EU exports or legal action, would be key in finding a solution for both sides and said they would continue to engage with the French and Belgian government to find a solution.
Under the new EU Food Information for Consumers Regulation (FIC) which comes into force next week, all food products must state specifically the source of vegetable oils (i.e. palm, rapeseed, sunflower) on ingredient lists. This in itself would not single out palm from other oils – but Malaysia says ‘no palm oil’ labels went a step too far and insinuated the ingredient was something to be avoided.
Don’t forget – our trade is bilateral
“To us the issue is very critical. We have a lot of trade, two-way trade, with France so we hope both governments would understand that any [trade barrier] will not be in the interest of both countries. So we hope [the French government] will assist us to resolve some of those issues,” Uggah Embas, who previously held the position of environment minister, said.
“Our agencies are looking at what the main course of action is. We hope we don’t have to resort to legal action. We hope with dialogue and discussion, more deliberation and understanding of palm oil we will be able to resolve these issues.”
Asked by a French journalist if Malaysia planned to retaliate against these labels by, for example, reducing the amount of Airbus aircraft purchases, the minister laughed off the idea and said he didn’t think it needed to reach this level.
“As much as you [France] are selling your Airbus to us and how this benefits your economy, we hope you also understand how important it is for you to buy our palm oil to help our economy, because if our economy is growing then we have money to buy your Airbus.”
According to the Malaysia External Trade Development Corporation (MATRADE), in 2013, Malaysia was the EU’s 29th largest export destination and 20th largest import source.
Malaysia’s total trade with the EU amounted to $43.1bn (€34.78bn) in 2013 - $20.7bn (€16.70bn) in exports from Malaysia to the EU and $22.4bn ($18.07bn) in imports from the EU to Malaysia. The major trading partners within this were Germany (29%), followed by the Netherlands (19.9%), France (13.9%), the UK (10.4%) and Italy (6.7%).
The minister was in Europe this week as part of a timber and palm oil promotion mission to the Netherlands – where most of the palm oil passes through - and Belgium. A delegation from the Belgian economic mission also came to Malaysia last month, where he said the label issue would be discussed over dinner.
The outcome of those discussions was unclear, but speaking ahead of the meeting in November the Malaysian minister said this formed part of an ongoing dialogue between itself and France and Belgium.
He said Malaysia had written to and visited the French government and that so far the feedback from that was positive.