THE COOPERATION BETWEEN INDONESIA AND MALAYSIA IN FACING NON-TARIFF BARRIERS ON PALM OIL BY THE EUROPEAN UNION (2009-2019)

Abstract

Palm oil has had many challenges and non-tariff barriers in the past decade, mostly done by the European Union. The accusations were that palm oil is not sustainable and causing deforestation of rainforest. The two biggest palm oil producing countries, Indonesia and Malaysia had done their best to overcome those issues. Both countries practiced economic diplomacy towards the EU through their cooperation. Question raised: How did Indonesia and Malaysia cooperate in facing non-tariff barriers on palm oil by European Union from 2009 to 2019? The objectives of this study are to find how Indonesia and Malaysia cooperate in facing non-tariff barriers done by the EU, analyzing how both countries use economic diplomacy towards the EU, what has changed and how it affects the EU’s policy towards palm oil. The significance of this study is to understand how the two biggest palm oil producers in the world, Indonesia and Malaysia, face the non-tariff barriers towards palm oil done by the global leader of renewable energy, the EU. This study focuses on the cooperation between Indonesia and Malaysia in the palm oil sector and how they face the non-tariff barriers done by the EU from 2009 to 2019. The methods used is qualitative methodology. This study found Indonesia and Malaysia have done their best to act as the service provider of economic diplomacy to facilitate the business enterprises to compete smoothly in the international arena. However, the task is not as easy as it looks. Several European countries' exports of palm oil were decreasing. Indonesia and Malaysia economic diplomacy in the palm oil sector still has a long way to go. The EU itself is the global leader in renewable energy which is actually a formidable opponent for Indonesia and Malaysia to compete with.