WTO rejects Malaysian appeal against EU's palm oil ban

The World Trade Organisation (WTO) Dispute Settlement Body has largely rejected a complaint by Malaysia against the European Union over a ban on palm oil. This is its first ruling on measures that assess products based on their environmental risk.

At the heart of the dispute are the EU’s plans to make the energy sector more sustainable. These include restrictions on palm oil-based biofuels, as their production requires deforestation. Malaysia, a major palm oil producer, felt the decision violated fair trade practices and challenged it at the WTO.

The WTO has ruled largely in the EU’s favour but did highlight shortcomings in its approach, including problems with how the restrictions were introduced. The EU will have to make some adjustments, but does not have to reverse the measure.

Malaysia can appeal the ruling in principle, but the WTO’s appeals body has been out of action for four years due to an impasse over the appointment of new members. As a result, there is currently no higher body to settle disputes between countries.


A palm oil plantation in Sarawak on Borneo © IMAGEBROKER

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