BUSINESS

MALAYSIA COMMITS TO CONSTRUCTIVE WORK WITH EU ON DS600 CASE

25/05/2024 03:20 PM

KUALA LUMPUR, May 25 (Bernama) -- Malaysia will continue working constructively with the European Union (EU) to ensure the prompt and effective implementation of the World Trade Organisation (WTO) panel's rulings on the DS600 case concerning discriminatory regulation of palm oil biofuels.

In a statement to Bernama, Ambassador Syahril Syazli Ghazali, Permanent Representative of Malaysia to the WTO, said the panel's findings on DS600 upheld several key elements of Malaysia's position in this dispute.

These rulings preserve the integrity of the multilateral trading system and ensure fairness in global trade, he said.

"Malaysia’s priority is not about who is the ‘winner or loser’ in the dispute, but most importantly, it is crucial for all WTO Members ‘to do the right thing’ by adhering to the WTO rulings and disciplines.

"In facing global uncertainties, WTO members should engage in fair competition and work closely to preserve and promote a stable and predictable trading environment," he said.

To recap, Malaysia filed complaints against the EU with the Dispute Settlement Body (DSB), citing the EU Renewable Energy Directive II (RED II) as inconsistent with WTO Agreements, which significantly impacted palm oil exports to the region, particularly from Malaysia and Indonesia.

Malaysia requested the establishment of a WTO panel in April 2021, and in May 2021, the panel was established to oversee the case—known as DS600: European Union and Certain Member States – Certain Measures Concerning Palm Oil and Oil Palm Crop-Based Biofuels.

Syahril Syazli said during the monthly DSB meeting held on May 24 in Geneva, Switzerland, the EU representative indicated its intention to implement the DS600 Panel’s rulings and recommendations.

However, the EU stressed that, given the implementation task, the trading bloc could not comply immediately and would require a reasonable period of time to do so.

As such, the EU has indicated its intention to discuss and work with Malaysia on the length of this period at the earliest available opportunity, he said.

"Malaysia welcomes the EU’s intention to implement the panel’s rulings and recommendations, particularly for the EU to bring its measures into conformity with the relevant WTO obligations.

"Noting the EU’s request for a period of time to implement the rulings and recommendations, Malaysia will continue working constructively with the EU to ensure the prompt and effective implementation of the panel's recommendations," he said.

Due to the complexities of the case, the panel took nearly three years from its establishment to provide its report, which was circulated to WTO Members on March 5, 2024.

It is important to note the panel's findings that have upheld several key elements of Malaysia's position in this dispute, particularly regarding the EU’s discrimination against Malaysian palm oil crop-based biofuels by providing less favourable treatment than EU biofuels, under the Agreement on Technical Barriers to Trade (TBT) and the General Agreement on Tariffs and Trade (GATT) 1994.

The EU is also to bring its measures into conformity with the relevant WTO obligations.

The panel report was subsequently adopted by the DSB at its meeting on April 26, 2024.

-- BERNAMA


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