Indonesia's Strategy in Dealing with The European Union Green Protectionism in The Palm Oil Trade

Abstract

The presence of palm oil in the international market is relatively competitive. As a producer of 59% of global palm oil, Indonesia faces green protectionism in the EU market. It is used for environmental protection, anti-deforestation, and global warming control. Therefore, this study analyzes Indonesia's response to EU market protectionism. The study uses the perspective of protectionism and the dynamics of state adjustment behavior in conflicts of national interest. The country's adjustment strategy theory is complemented by the behavioral choice strategy theory in facing international sanctions. The authors use qualitative methods, with literature study, observation, and supplemented interviews. In dealing with palm oil trade barriers, Indonesia initially utilized the domestic offensive strategy to deal with the restrictions, changing domestic palm oil management policies, including forest moratorium, terminating palm oil permits, adopting the ISPO certification system, and downstream the domestic palm oil industry. However, it was ineffective, and various restrictions became more vigorous, so Indonesia implemented an international offensive strategy, encouraging changes in international regulations and eliminating protectionism against palm oil. Nevertheless, the resistance has yet to be very successful. Therefore, Indonesia must perform proactive conformance to find new markets for Indonesian palm oil.