The coronavirus pandemic has swept across the world with alarming speed and ferocity. It has forced the EU and its Member States to shut borders and implement harsh lockdowns. A dangerous side effect of this necessary response is the disruption of economic support for vulnerable people.
As we contemplate the spectre of a protracted shutdown of normal social and economic activity for potentially as long as a year, and as EU governments explore options for stimulus and bailout packages, we must remember not to close the door on trade with ASEAN.
To ensure that Europe’s economy remains healthy, it is essential that close ties with parts of the world where economic growth has been most pronounced are maintained. Prior to the coronavirus outbreak, Southeast Asia, particularly countries like Malaysia, were among the world’s fastest growing regions. Even now, Malaysia’s growth will be higher than that achieved by Europe over the last few years.
Yet the EU had already jeopardised its potentially lucrative relationship with the Association of South East Asian Nations (ASEAN), by pursuing an ill-conceived ban on palm oil for biodiesel. The grounds are seemingly noble and motivated by palm oil’s role in deforestation, which is the world’s third largest driver of climate change.
But the ban came at a very odd time – just a few months after a new Malaysian government had come into power and declared its commitment, in November 2018, to transition rapidly to 100 percent sustainable palm oil production under the world’s first government-backed regulatory framework. The EU ban, in turn, prompted Malaysia to threaten retaliation by scuppering a potential EU-ASEAN free-trade deal and planning retaliatory action through the World Trade Organisation.
"It is crucial that EU policymakers ensure that the Green New Deal – and Malaysia’s sustainable palm oil transition – continue unabated as part of the stimulus needed to sustain our economies"
Now both the EU and Malaysia are facing the severe consequences of the coronavirus and they cannot afford to be at loggerheads. In Europe, the comprehensive shut-downs of so many areas of society has already impacted economic growth and will lead to a prolonged recession. In Malaysia, the palm oil industry – which comprises 15 percent of the country’s GDP – has had to close operations as the pandemic accelerates.
The danger is that both Europe’s and Asia’s critical sustainability commitments could end up being left behind. Therefore, it is crucial that EU policymakers ensure that the Green New Deal – and Malaysia’s sustainable palm oil transition – continue unabated as part of the stimulus needed to sustain our economies.
The EU must remember that its approach to Malaysia, while understandable, does not concord with the science. For instance, a study by scientists at the University of Bath, published in Nature Sustainability, confirms: “There is neither an economic nor an environmental case for the substitution of palm with vegetable oils or exotic oils on a large scale.” While a high technology alternative of substituting palm oil with artificially produced oils might be possible in years to come, the paper urges that: “In the short to medium term, ensuring sustainability in the palm oil sector is the only realistic approach to reducing environmental impact.”
To achieve this, the EU must replace its blanket ban with a suite of carefully-designed schemes to incentivise producers to switch to sustainability, coupled with joint research and monitoring programmes. This could be a win-win for both sides.
"The EU would have a clean, cheap and competitive source of truly sustainable palm oil from Malaysia which would act as the key bridge fuel for Europe’s clean transport revolution under the Green New Deal"
The EU would have a clean, cheap and competitive source of truly sustainable palm oil from Malaysia which would act as the key bridge fuel for Europe’s clean transport revolution under the Green New Deal. This, too, would end the impasse between the EU and ASEAN and open up new opportunities for the two regions to coordinate economically in the global fight against the coronavirus.
Most importantly, it would also ensure that both the West and East remain on track to reduce the drivers of climate change. And if the coronavirus is teaching us one thing, it is that we are all in this together.