Making palm oil a poster child for free trade would be a spectacular own goal

“As expected” mumbled Commission president Juncker when an aide passed him a note saying Trump had decided to impose tariffs on European steel and aluminium. The American administration had been playing with the Europeans for nearly two months but threats of retaliation, offers of new trade deals (TTIP light), and a grand visit from the French president had done nothing to dissuade US president Donald Trump.

The decision is significant. It comes at a time of heightened tension and uncertainty about the Atlantic alliance. In early May, Trump decided to unilaterally pull out of the Iran deal and bully European companies that have invested billions in Iran into submission. The public reactions to this are relatively muted, but behind the scenes people are now wondering whether the US is actually still our ally or whether we are now seen as vassals, or perhaps even rivals.

Since the election of Trump, the EU’s public reaction to Trump’s attacks on Europe and the international order has been to become even more internationalist. The EU executive presents itself as the standard bearer of free trade based on European values. Not just in its rhetoric – Juncker talked about “a bad day for world trade” – but also in its actions. The EU is close to concluding deals with Japan, Mexico, Singapore, and the Mercosur bloc. In addition, the Commission has launched a series of negotiations with countries including Indonesia, Australia and New Zealand.

While there might be an elite consensus amongst centrist EU policymakers that free trade is the answer to our economic problems, voters don’t necessarily agree. The CETA deal with Canada created a major backlash. TTIP, the planned but now scuppered deal with the US, was even more controversial. Meanwhile, across Europe populist parties are on the rise. One of their main critiques of the EU is that it is a neoliberal, free trade project that works for multinational corporations but not people.

Transport & Environment has worked on trade for a number of years. We don’t work on this because we are against free trade. We actually believe open markets and competition can be forces for good. Much of our work is focused on creating the conditions for business to deliver cleaner mobility. What we are concerned about is the tendency of trade deals to undermine Europe’s ability to make its own choices, independent of what corporations or third countries want us to do.

Palm oil is a case in point. Burning palm oil to fuel cars and trucks is perhaps one of the most stupid things we do in EU climate policy. The reason governments force drivers to buy diesel mixed with palm oil is EU law, the famous Renewable Energy Directive. With the exception of the palm oil lobby, everybody thinks burning palm oil to meet green energy targets is madness. Farmers, consumers, regulators, business ... Throughout the biofuel campaign I haven’t heard anyone defend it, except of course for the palm oil lobby and the oil industry.

But according to certain parts of the Commission, the EU has no right to make that decision. Disqualifying palm oil from the EU’s green energy targets would supposedly be at odds with the rules of the World Trade Organisation and disrupt ongoing trade negotiations. This is precisely what we dislike about trade deals: the way they are too often (mis)used to hinder or overrule democratic decision making. Then there’s the other question: the US under Obama disqualified palm oil from its green transport energy law, without it leading to a trade war, so why couldn’t we do it?

Diesel now accounts for 51% of palm oil use in Europe - more than the food and cosmetics industries together. This issue won’t just go away. More and more and more people will find out and they will rightly conclude this is a deeply flawed policy. And they’ll wonder why the EU allows this to continue, even after Parliament voted to end it, tens of thousands petitioned the Commission to act and farmers announced they’d take to the streets.

I don’t know who is advising President Juncker and his team on this but I would suggest that if the Commission wants to take a big stand on free trade, choosing palm oil as its poster child would be a spectacular own goal.

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William Todts's picture

Executive Director

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