Malaysia had requested a WTO arbitration panel back in January, charging that the EU, and in particular member states France and Lithuania, had imposed restrictive measures on the use of palm oil that violate international trade agreements.
Brussels blocked the initial demand for a panel, but the second request was granted Friday during a meeting of the organisation’s Dispute Settlement Board, according to a Geneva-based trade official.
Under WTO regulations, parties in a dispute can block a first request for the creation of an arbitration panel, but if the parties make a second request, it is all but guaranteed to go through.
Malaysia, the world’s second-largest producer of palm oil, initially filed a complaint with the WTO last July, balking at EU efforts to phase out its use as a biofuel.
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