The Impact of the European Deforestation-Free Regulation on Trade Relations With Southeast Asia

As political and trade ties deepen between the European Union (EU) and Southeast Asia, new challenges have surfaced where EU trade laws and extraterritorial regulations intersect with social and environmental concerns. The EU must balance these with the development goals of its interregional partners. Notably, the EU’s sustainable forest policies have strained relations with palm-oil producers like Indonesia and Malaysia. The upcoming 2023 European deforestation-free regulation adds further tension, as its broad scope and benchmarking have sparked opposition in the forest sector. Examining these challenges highlights the existing and significant conflicts raised by the EU’s unilateral approach to climate mitigation. For the sake of the European environmental strategy’s effectiveness, as it extends beyond economic ambitions, it becomes necessary for the Union to develop a joint and suitable cooperation with its partners, to achieve political consensus while limiting trade disruptions in the forest agricultural sector.