Trade minister urges France to cancel progressive palm oil tax

The French Parliament plans to gradually increase palm oil taxes starting next year.

The tax is stipulated in Amendment No. 367 as adopted by the French Upper Legislative Assembly on 21 January 2016.

In the Trade Ministry’s press release, Friday (5/2/2016), Thomas sent a letter specifically to the French Government.

According to him, the palm oil tax is seen as violating the principles of the World Trade Organization (WTO) and the 1994 General Agreement on Tariffs and Trade (GATT).

The violation will create price discrimination and will harm Indonesia.

According to Thomas, if the plan is materialized, the price of Indonesian palm oil will not be competitive.

Ultimately, the food industry in France and the European Union countries will replace palm oil with other vegetable oils at lower prices.

“I am asking the French Government to not adopt Amendment No. 367. I am asking the French Government to cooperate with Indonesia to address the problems in France that are related to palm oil,” said Thomas Lembong.

Palm oil is one of the strategic commodities in the Indonesian economy. Directly and indirectly, the palm oil sector employs 16 million workers in Indonesia and contributes 1.6 percent to Indonesia’s gross domestic product (GDP).

Around 61 cities in Indonesia, including small cities, make a living from the palm oil sector. Moreover, Indonesia’s export revenues from this commodity reach around 19 billion US dollars per year.

According to Thomas, if the amendment applies because of environmental factors, this step is also not right. This is because Indonesia has taken a sustainable palm oil policy (Indonesian Sustainable Palm Oil/ISPO).

The ISPO ensures that the palm oil is produced in an environmentally friendly manner and does not contribute to deforestation and climate change.

Not only that, the Indonesian palm oil industry also participates in the Roundtable on Sustainable Palm Oil (RSPO) to ensure that Indonesia’s palm oil is produced in accordance with sustainability standards.

Meanwhile, if related to health issues, Thomas confirms that it is not right. The latest study shows that the consumption of saturated fatty acids from palm oil does not increase the risk of cardiovascular disease.

“If there are regulations related to saturated fat consumption, then it must target all food products that contain saturated fat, whether it is palm oil, other vegetable oils or animal fats,” added Thomas.

Author	: Aprillia Ika
Editor	: Aprillia Ika

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