The Garuda Strikes Back : Indonesian Economic Diplomacy to Tackle European Union Protectionism on Crude Palm Oil

Abstract

This paper analyzes Indonesia's economic diplomacy in overcoming trade barriers to Indonesian palm oil commodities carried out by the European Union. Until now, the Indonesian Crude Palm Oil (CPO) industry has experienced tremendous pressure from the European Union (EU) as one of the main export destinations for Indonesian CPO. In order to secure Indonesia's national interests, instead of taking a cooperative approach, the Indonesian government has responded to the EU's discriminatory attitude towards palm oil commodities with a series of assertive economic diplomacy approaches. This assertive economic diplomacy approach is understood by this paper as a form of the “Power-Play End” strategy articulated by Indonesia to secure its national interests in mainland Europe. The main question in this paper is how can Indonesia use this strategy in overcoming trade barriers imposed by the EU on palm oil commodities? Using the concept of Economic Diplomacy which emphasizes three elements, namely the use of political influence and relations, the use of economic assets, the consolidation of the political climate and the international environment - this paper will examine Indonesia's economic diplomacy in related issues. Key Words: Palm Oil, Economic Diplomacy, Trade Barriers, Indonesia, European Union

Questioning a Fair Settlement as The Legal Resolution of Global Interests

“…Moreover, some argue that the boycott may be motivated more by economic interests than by environmental concerns, as European producers of competing crops such as sunflower and rapeseed may benefit from reduced competition from Indonesian palm oil. [51] Overall, the arguments for the fairness of the boycott may be grounded in principles of environmental protection, consumer activism, and the exercise of regulatory authority by the European Union. However, it is important to note that there are also arguments against the boycott and that the issue is complex and multifaceted.…”

The Influence of “Renewable Energy Directive II” Policy for The Sustainability of Palm Oil Industry in Indonesia

“…The Renewable Energy Directive (RED) is a policy that sets guidelines for the development and deployment of renewable energy throughout Europe (Gresnaidi et al, 2022). Starting in 2015, the European Union Trade Authority instituted new regulations for the import and export of crude palm oil in Europe to reduce greenhouse gas emissions (Ichlas El Qudsi et al, 2020).…”

A Review of Key Sustainability Issues in Malaysian Palm Oil Industry

“…The inclusion of biofuel in the regional bloc energy mix aims to reduce GHG emissions, improve energy security and protect domestic farmers' revenue. As stated in Article 17, biofuel products must be environmentally friendly and sustainable to decrease GHG emissions by at least 35% compared to fossil fuels [26]. Nevertheless, the biofuel policy as stipulated in RED has generated criticism from member states since its inception [27].…”