WTO rules on palm oil spat between Malaysia and EU
GENEVA (AFP) – The World Trade Organization (WTO) on Friday agreed to create an expert group to resolve a dispute between Malaysia and the European Union (EU) over rules affecting the consumption of biofuels based on palm oil in the block.
Malaysia had requested a WTO arbitration panel in January, accusing the EU, and in particular member states France and Lithuania, of imposing restrictive measures on the use of the oil palm trees that violated international trade agreements.
Brussels blocked a panel’s initial request, but the second request was accepted at a meeting of the organization’s Dispute Settlement Council on Friday, according to a Geneva-based trade official.
Under WTO rules, parties to a dispute can block a first request for the establishment of an arbitration panel, but if the parties make a second request, it is virtually guaranteed to be successful.
Malaysia, the world’s second-largest producer of palm oil, initially filed a complaint with the WTO last July, rejecting EU efforts to phase out its use as a biofuel.
The EU is committed to a major plan committing member states to building a carbon neutral economy by 2050, notably by promoting the use of biofuels.
But he said palm oil production is unsustainable and palm oil-based biofuels cannot count towards the EU’s renewable energy targets.