KUALA LUMPUR - Malaysia and Indonesia plan to raise the prospect of European Union curbs on the imports of palm oil with the World Trade Organisation, both countries said in a joint statement on Sunday.
A resolution by the European Parliament in April called for the EU to phase out by 2020 the use of vegetable oils in biodiesel that are produced in an unsustainable way leading to deforestation.
The resolution includes palm oil, an important commodity for Indonesia and Malaysia, which produce nearly 90% of the world's palm oil.
The statement, following a meeting between Malaysia and Indonesia's trade ministers, said that the two Southeast Asian countries would meet at end-July to "discuss and coordinate" palm oil issues, including organising a joint mission to Europe to "engage with relevant parties and stakeholders."
The two nations will coordinate plans via the Council of Palm Oil Producing Countries (CPOPC), a joint initiative by Malaysia and Indonesia to work together in managing stockpiles and supporting prices.
"Malaysia and Indonesia will consider taking this issue to the World Trade Organisation (WTO) if the Resolution becomes an EU Directive and discriminatory in nature," said the statement, issued by Malaysia's Ministry of International Trade and Industry.
The palm oil industry has faced widespread criticism in recent years for its links to deforestation and is often accused of annual haze outbreaks in the region due to open burning being used as a cheap way to clear land.
France said earlier this month it would take steps to restrict the use of palm oil in producing biofuels.
Malaysia has called the move discriminatory and added it would review its trade with France, while Indonesia's palm oil association said it was concerned it could prompt other European nations to follow suit.