Jakarta. The European Union, or the EU, remains upbeat that the bloc’s now-delayed anti-deforestation law will not affect its blooming trade with ASEAN despite the region being home to the world’s largest palm oil suppliers.

Palm oil producers have been keeping a close eye on the EUDR, the EU's regulation on deforestation-free products. This policy will require exporters of palm oil and other commodities linked to forest destruction to submit due diligence statements that their products do not come from deforested land. The rule has rattled Indonesia and Malaysia, which collectively make up 85% of the global palm oil supply. The Jakarta Globe recently asked EU Ambassador to ASEAN Sujiro Seam on whether the EUDR would weaken Europe’s trade with the Southeast Asian club.

“ASEAN-EU trade is extremely large. Palm oil, products concerned by deforestation, are a fraction of that trade,” Seam said in an exclusive interview with the Globe on Monday. 

The diplomat went on to say that trade pacts — be it the bilateral or region-to-region level — cover a wide range of goods, not only palm oil. The EU to date already has trade agreements with two ASEAN members, and another one with Indonesia is waiting lawmakers' approval.

The 27-strong grouping has delayed the EUDR by a year until end-2026 for large operators and traders. The phase-in period for small traders lasts until June 30, 2027. Seam said that this postponement should give extra time to “address any difficulties” related to the EUDR.

“But we should focus on the big picture that nowadays, trade has become more unpredictable, with some of the ASEAN partners. The EU is the reliable, predictable, and trustworthy partner,” Seam told the Globe, alluding to the double-digit US reciprocal tariff hitting Southeast Asia.

The EU reported that it ranked as the third-biggest trading partner within ASEAN, after major powers China and the US. In 2024 alone, the EU-ASEAN trade volume amounted to EUR 258.8 billion or around $307.5 billion. Indonesian data showed that the country’s trade with the EU totaled $30.4 billion over the said period, and an upcoming trade pact is set to almost triple the numbers within a few years of its implementation. This comprehensive economic partnership agreement will also grant greater market access for Europe-bound Indonesian palm oil.

A 2019 EU report showed that Indonesia's palm oil market share within the region remained the largest at 47%.

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