Is Australia Going Green on Trade?

Alan Oxley, Jakarta Post

Indonesian trade officials would be entitled to wonder who has a greater say in trade relations with Indonesia — the Australian government or environmental campaigners?

The environmental campaigners are currently making more noise on trade policy. They have been prodding the Australian government into taking trade actions that would effectively reduce agricultural and forestry exports from Indonesia.

This would undermine economic growth — particularly in rural regions.

Campaigns by groups such as Greenpeace, Rainforest Action Network and the Worldwide Fund for Nature (WWF) to put curbs on the commodities trade are nothing new. All have a history of opposing free trade.

The most recent example is a push by campaigners to have the Australian government hold an official inquiry into food labeling.

The aim of the push is to eventually have palm oil — but not other similar vegetable oils — discriminated against in Australian markets.

The Indonesian Trade Ministry last week made its opposition to this clear in two submissions to the Australian government.

The enquiry is the culmination of a long and orchestrated campaign to curb palm oil exports.

The campaign has also drawn in the support of three Australian zoos.

The zoos now contend that the palm oil industry has been, and remains, the leading destroyer of orangutan habitat.

They should have checked the facts before repeating everything the environmental campaigners told them.

The UN has reported that increases in land use for purposes other than palm oil expansion have been much sharper. There has been a marked rise in the expansion of urban areas, prompted by Indonesia’s high population growth.

Up until five years ago, Greenpeace was blaming commercial forestry and illegal logging for large-scale habitat loss — not palm oil.

Even then they were wrong, and consciously so. UN bodies such as the Food and Agriculture Organization and Framework Convention on Climate Change have been attesting for years that globally no more than 20 percent of deforestation is for conversion to large-scale commercial agriculture. Most deforestation is undertaken by poor people seeking food, fuel wood and shelter. Other reputable research bodies concur.

The proposal to single out Indonesian palm oil and curb its trade is rash. Like most hastily concieved ideas, it cannot work.

Such a measure is likely to fall afoul of World Trade Organization (WTO) law.

The WTO requires trade restrictions designed to protect the environment to contribute directly to combating the environmental problem.

The Greens’ measure simply aims to discourage Australian consumers from purchasing products containing palm oil.

Not one orangutan will be saved by this action. Why?

The causes of orangutan population loss are myriad. Conservation biologists have published peer-reviewed papers that that clearly state that poaching, bush meat hunting, and failure of authorities to protect conservation are more present threats to Indonesian orangutan.

Groups that have attempted to manage conservation areas in Indonesia — such as WWF — would understand that. WWF has had immense problems with local communities and enforcement in its own conservation projects in Sumatra.

It has also had problems with illegal logging — the subject of another Australian current campaign against Indonesian exports.

The current Australian government made an election promise in 2007 to take ban imports of “illegal” timber.

This is premised upon the Green assertion that most forestry within the Asia-Pacific region is illegal. The prospective ban includes paper, one of Indonesia’s major exports.

The Yudhoyono government has already acted decisively to curtail illegal logging. The Australian forests minister has even acknowledged Indonesia’s share of imports to Australia is small.

Yet advice commissioned by the Australian government stated that any hard measure against imports will do little to stop illegal logging, and raise costs for both exporters and Australian consumers.

Canberra has already indicated it will ignore this advice and implement a measure that targets products from Indonesia, Malaysia and Papua New Guinea.

Australia has already committed to work closely with these three governments to tackle the root causes of illegal logging.

Why then proceed with a trade measure that will seemingly benefit no one?

The answer is political. A national election is due by the end of the year and the Rudd government has started to look shaky. In Australia’s large, fashionable cities there are groups of Green voters that might just tip a few current parliamentarians out of office.

And in Australia’s industrial rural regions, uncompetitive paper manufacturers and unionized labour have joined the fray.

Last year they accused cheap imports from Indonesia of adversely impacting the Australian paper industry. Australia’s customs agency concluded it was the arrival of more competitive Australian paper manufacturers that was making business tougher.

They have also lobbied major Australian purchasers to cease purchasing Indonesian paper.

The Australian government response to this trade politicking has been curious.

Standing policy rejects trade measures on environmental grounds.

Australia has consistently opposed the use of environmental trade bans. It also strongly supports expansion of trade with its neighbors and has proposed new trade agreements with Indonesia, Malaysia and Papua New Guinea.

Yet on the trade restrictions aimed at important Indonesian exports, it has been silent.

If the Australian government leans towards the Green position, it would give credence to a mistaken version of environmental “protection”. This would not solve any environmental problems.

Moreover, this would undermine efforts both in Canberra and Jakarta to increase trade and economic growth — and therefore reduce poverty.

The writer is a former Australian ambassador to the GATT, the predecessor of the WTO and is chairman of World Growth.

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