Malaysia, Indonesia Aids Philippines To Settle Palm Oil Dumping

Palm Oil
FILE PHOTO: A worker collects palm oil fruits at a plantation in Bahau, Negeri Sembilan, Malaysia January 30, 2019. (Photo: REUTERS/Lai Seng Sin/File Photo)

The Philippines finds aid from Malaysia and Indonesia as the country fights further dumping and smuggling of the Product. The two nations are the main sources of palm oil imports of the Philippines.

Philippines' Department of Agriculture intensified its actions against imports of palm oil to the country. Malaysia and Indonesia answered the call of the department by agreeing to cooperate to address the dumpling of palm oil in the country.

Secretary Emmanuel Piñol said on his Facebook post on Thursday that the Philippines, Malaysia, and Indonesia agreed to form a tripartite technical working group to deal with the problem.

The officials from the Philippines and their counterparts from Malaysia and Indonesia met on Wednesday. During the meeting, Secretary Piñol said that he suggested keeping palm oil exports from these two countries at a level that would not affect the country's own coconut and palm oil industries. The Philippines is one of Malaysia and Indonesia's importer of palm oil. The secretary said that too much of the product is getting into the country causing the local prices of palm oil to drop that affects the coconut farmers.

Piñol said that importation data gathered by the DA showed that exports of palm oil to the Philippines by both Indonesia and Malaysia have increased by 100% over the last 3 years. He also added that since palm oil is cheaper than coconut oil, the increase in palm oil exports was cited [as] one of the reasons behind the collapse of copra prices.

The secretary also asked Malaysia and Indonesia to check the alleged smuggling of crude and refined palm oil into the Philippines. The secretary also requested the two governments to open up their markets to the products of the Philippines especially the coconut-based goods to balance the trade of the goods.

According to Piñol, the Philippine government can only increase tariffs on palm oil to deter its entry in the domestic market. Currently, imports of palm oil from Asian nations are tariff-free. According to the World Trade Organization's Safeguard Article 12, members need to notify the organization if they want to impose a special safeguard investigation or initiate policies related to import surge.

The World Trade Organization said that a member may take a safeguard action [i.e., restrict imports of a product temporarily] only if the increased imports of the product are found to be causing, or threatening to cause, serious injury.

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