Indonesia’s efforts in opposing the European Union’s Deforestation Regulation (EUDR), which is detrimental to the country’s palm oil industry, has inspired but also garnered support from a bipartisan group in the United States (US) and other countries united under the Like-Minded Countries (LMC) group.
“Recently, both the Republican and Democratic parties in the US have questioned the EUDR. So, the LMC has been inspired by what Indonesia and Malaysia have done,” Coordinating Minister for the Economy, Airlangga Hartarto, said as quoted on Thursday, July 18, 2024.
Airlangga added that Indonesia has continuously expressed the concerns of many countries regarding the EUDR to various relevant parties, including mobilizing the LMC to issue two joint letters in response to the EUDR to EU leaders on July 27, 2022 (with 14 LMC members), and on September 7, 2023 (with 17 LMC members).
The US is among the countries criticizing the EUDR. On May 30, 2024, the US Government sent a letter to European Commission Vice-President Maros Sefcovic, signed by Agriculture Secretary Thomas Vilsack, Commerce Secretary Gina Raimondo, and US Trade Representative (USTR) Katherine Tai.
In the letter, the US Government emphasized that the implementation of the EUDR according to the proposed timeline by the end of the year would have a negative economic impact on producers and consumers in both the US and the EU. The US urged the European Commission to delay the implementation of the EUDR.
The letter identified three major challenges for US commodity producers in understanding and adapting to the EUDR: lack of an information system, insufficient guidelines from the European Commission, and the provisional country benchmarking classification, which places all producer countries in the standard risk category regardless of their forestry practices.
Some producer countries, like the US, which consider their forestry practices advanced and sustainable, see the standard risk classification as unfair.
The US’s letter to the EU followed a letter from US senators to USTR Katherine Tai on March 8, 2024, which highlighted the potential business losses, estimating that the EUDR would restrict market access for US forestry products to the EU by US$3.5 billion (Rp56.7 trillion) per year.
The US Government’s request for the EU to delay the EUDR implementation adds significant pressure on the European Commission. Besides the US, some EU member countries, like Austria, have also criticized the EUDR.
The deforestation regulation is viewed as having a negative impact on small-scale and sustainable agricultural and forestry practices within the EU. They support calls to exclude smallholders and delay the EUDR implementation.
