NAME: NURFARHANA BINTI ZULKIFLI

NPM: 237000569
Find a case of a trade conflict between Indonesia, Malaysia and the European Union. Focus on
one product or commodity. Describe the main issue of the conflict and how these countries try
to solve it.
The main issue of the conflict between the European Union (EU) and major palm oil
producers Indonesia and Malaysia was related to the EU's Deforestation Regulation (EUDR) and its
potential impact on the palm oil industry. The EU's EUDR placed import limits on some goods,
including palm oil, unless it could be demonstrated that they were produced without causing
deforestation beyond 2020. This was done to address concerns about deforestation and to encourage
sustainable practices. There are concern and disagreements regarding the EUDR which are nature
concerns. According to the EU, the production of palm oil in Indonesia and Malaysia has resulted in
deforestation, habitat destruction, and greenhouse gas emissions that have caused climate change and
a loss of biodiversity. These environmental problems are the focus of the EUDR. Next, effect on
smallholders. According to Indonesia and Malaysia, smallholders who depend on the production of
palm oil for their livelihoods and small farming enterprises will be disproportionately impacted by the
EUDR. They felt that these smallholders would be burdened by the administrative processes and
requirements for regulatory compliance and that they would even be shut out of the global supply
chain. Furthermore, economics implications. The two countries that produce the most palm oil
worldwide, Indonesia and Malaysia, expressed worry about the EUDR's possible effects on their
economies. They believed that any limits or prohibitions on imports may negatively impact their
economies because the EU constituted a large market for their palm oil exports.
The EU and the nations that produce palm oil took a number of actions to resolve this trade
dispute which are make negotiations and discussions to express their concerns and make their case for
the EUDR, officials from Indonesia and Malaysia held talks with EU delegates in Brussels. They
underlined the need to treat smallholders fairly as well as the possible negative impacts. Next, fair
Treatment plea. Underscoring the need for equitable treatment from the EU, Malaysian Minister
Fadillah Yusof made a plea that the EU consider Malaysia as a trading partner. In the talks, Indonesia
likewise tried to take a fair and impartial stance. Furthermore, make the trade deal talks to resume.
Malaysia stated that it was open to pick up trade talks with the EU if the EU addressed its concerns
and gave a positive answer to the points brought up. Trade talks between Malaysia and the EU have
been stopped since 2012. After seven years of negotiations, Indonesia showed patience and expressed
hope for a favorable outcome from the EU.
Achieving a compromise seemed to be the key to ending this dispute, allowing the EU to take
care of its sustainability and environmental issues while also taking into account the social and
economic effects on smallholders in Malaysia and Indonesia. To balance these interests and come up
with a solution that would satisfy all parties, the governments had to cooperate and engage in
negotiations. The result would define the future of commercial ties between the EU and the countries
that produce palm oil.