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Intervention of the Veblen Institute in palm oil disputes at the WTO

Mathilde Dupré, 26 April 2022

[English] [français]

The Veblen Institute presented on April 25 and 26 two amicus curiae briefs (i.e. voluntary interventions from non-party organisations) in the context of the dispute at the World Trade Organization (WTO) opposing on the one hand Indonesia and elsewhere Malaysia, to the European Union and to France.

Indonesia has indeed opened a procedure through the WTO dispute settlement mechanism in December 2019 against European and French rules concerning agrofuels and in particular the treatment reserved for palm oil and oil palm crop-based biofuels. And Malaysia in January 2021.

The intervention of the Veblen Institute aims to provide the members of the Panel of the dispute settlement body (DSB) with an analysis of the main legal elements and their interpretation to resolving this dispute in a way that respects the scope of the regulatory autonomy of WTO Members and strike an appropriate balance between trade interest and environmental issues and climate.

The Veblen Institute does not directly address in this analysis the question of the relevance of the use of agrofuels in climate change policies. Our objective is to defend a principled stance (based on the applicable legal provisions):
- a measure which is not protectionist shall be deemed prima facie consistent with GATT Article III, and
- a measure genuinely aimed at mitigating climate change should be justified under GATT Article XX.

In particular, the Veblen Institute supports that such a measure which differentiates between products on the basis of their processes and production methods should be deemed consistent with the GATT if it has been established that such a differentiation is legitimate.

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