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Indonesia–European Union disputes over palm oil and oil palm crop-based biofuels (DS593): Analysis of the renewable energy directive and the EU biofuel sustainability criteria from a WTO law perspective

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Palm oil is the world’s most traded vegetable oil and Indonesia is by far the world’s largest palm oil producers. Palm oil covers an estimated 14.60 million hectares in Indonesia, with total production reached 48.42 million tons in 2019. Palm oil significantly contributes to the economies of Indonesia. It is one of strategic leading export commodity with total export value amounting to 16.00 billion USD in 2019.

However, besides economic benefits, palm oil is frequently associated with environmental and social controversy. Expanding palm oil plantations are, among others, linked with deforestation, green house gas emissions, and loss of bio-diversity. These issues tarnish the reputation of palm oil, particularly in European countries.

In December 2018, the European Union’s updated Renewable Energy Directive (RED II) entered into force, which will gradually phase out the use of palm oil-based biofuels by 2030. The Indonesian government deems that the policy is discriminative and would negatively impact on Indonesian exports of palm oil and biofuel. Therefore, in December 2019 Indonesia filed a request for consultation with European Union at the WTO regarding certain measures imposed by the European Union and its member States concerning palm oil and oil palm crop-based biofuels from Indonesia.

This paper aims to analyze whether the EU REDII, which sparks controversy from Indonesia, is consistent with WTO Agreement specifically GATT 1994. It also explores way forward for Indonesia in the WTO proceeding, and the challenges and opportunities of Indonesian diplomacy. The results of the analysis how that RED II and the EU Biofuel sustainability criteria are inconsistent with several provisions in WTO Agreement, i.e. ,Article I:1 GATT 1994, Article III:4 GATT 1994, and Article XX GATT 1994. Although Indonesia has a chance to win this dispute, diplomatic efforts need to be strengthened by establishing a strong lobbying with other countries that have the similar interests.

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Ketersediaan

2021-0218

Sekdilu 42-2021

Training Materials Repository

Tersedia

Informasi Detail

Judul Seri

-

No. Panggil

Sekdilu 42-2021

Penerbit

Jakarta : Kementerian Luar Negeri., 2021

Deskripsi Fisik

Digital File

Bahasa

English

ISBN/ISSN

-

Klasifikasi

NONE

Tipe Isi

text

Tipe Media

computer

Tipe Pembawa

online resource

Edisi

-

Subjek

Palm oil

Info Detail Spesifik

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Pernyataan Tanggungjawab

UPT Sekolah Dinas Luar Negeri

Versi lain/terkait

Lampiran Berkas

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