Jakarta: Indonesia’s trade ministry publicly called on the European Union on Thursday to follow a global trade ruling and remove taxes on Indonesian biodiesel. The ministry also expressed disappointment that the EU is challenging the decision, reports Global Banking & Finance review.
The dispute centers on a recent ruling from the World Trade Organization (WTO) that supported Indonesia’s position. The WTO panel agreed that the EU’s taxes on Indonesian biodiesel broke international trade rules. The EU, which is a major buyer of Indonesian palm oil products, announced it would appeal the ruling last week.
In a official statement, Indonesian Trade Minister Budi Santoso questioned the logic of the EU’s appeal. He noted that the WTO’s top appeals court has been unable to function since 2019.
“By choosing to appeal, the EU is making a move that has no practical effect,” Minister Santoso said. He added that the action “looks like a strategy to delay resolving this matter.”
The EU first put these taxes, which are between 8% and 18%, in place in 2019. At the time, the EU argued that Indonesian biodiesel producers had an unfair advantage because of government financial support and access to cheaper raw materials.
This conflict over biodiesel is one of several between the two regions concerning trade and environmental issues. It comes even as the EU and Indonesia recently completed talks on a new agreement to increase trade between them.
