The world needs free trade, now more than ever

The trade policy of the United States changes on almost a daily basis, but the crux of the approach remains consistent: the Trump administration is hostile to free trade. President Trump believes other countries are punishing America with tariffs and other trade barriers. Unfortunately, he is trying to fight fire with fire by erecting harsh new barriers of his own.

Free trade benefits everyone. Centuries of history demonstrate making it easier for people around the world to buy and sell their wares leads to more jobs, more opportunities, more choices for consumers, and more prosperity. Keeping tariffs low is a big part of that, but just as important—if not more so—is keeping regulatory barriers in check so that the rules don’t inadvertently end up harming the people they were intended to protect.

European import rules are a prime example of this phenomenon. Countless companies buy products from elsewhere and bring them into Europe. It is especially applicable when those products are ingredients rather than finalized products in themselves. Take palm oil, for example. Used in a wide range of food products and toiletries, palm oil imported into Europe is subject to aggressive scrutiny from Brussels regulators, and price increases indirectly hit consumers’ wallets, even if most people don’t buy it directly, instead buying products that use it as an ingredient, like chocolate or soap.

There are simple steps regulators in the EU can take to lower trade barriers, keep prices low for consumers, and maintain free trade. Malaysia, one of the world’s top producers of palm oil, should be designated a ‘low-risk country’ for palm oil imports. This would be easy to do. The EU should recognize the MSPO certification scheme, the first nationally mandated environmental standard of its kind in the world, as compliant with EU deforestation regulations.

Mutual recognition of regulations and trading standards in this way is a great way to keep trade barriers low. The Malaysian authorities are already going out of their way to do background checks on palm oil producers and certify their exports’ environmental credentials. There is little sense in the EU duplicating that work by expecting reams more paperwork and endless extra European red tape.

Luckily for Brussels, the MSPO already meets EU deforestation standards in full. It includes stringent traceability requirements across the entire supply chain. It covers 80% of the Malaysian palm oil industry, and counting, including the smallholders who account for more than a quarter of Malaysian plantations.¹

The MSPO’s results are plain to see, and the European Union should take note of the fact that it has achieved real-world change on a substantial scale. Malaysian deforestation from palm oil has been trending down for a long time, with Global Forest Watch research showing a reduction in ‘primary forest loss’ of 57% per 2022.²

What’s more, Malaysia seems to have gone far beyond the minimum requirements to ‘green up’ its palm oil industry. It has prioritized environmental concerns ahead of expanding production. Since 2019, Malaysian palm oil production has not breached a ceiling of 20 million tons.

That comes alongside a 4.2% drop in the land coverage of palm oil plantations, as well as significant reductions in the expansion of other EU-highlighted commodities like rubber, timber, and cocoa. If even that is not enough for the EU to designate it a ‘low-risk country’ for imports, then nothing is.³

Beyond the industry specifically, there have also been encouraging developments in conservation efforts more broadly. Malaysia recently announced it has blown its target to plant 100 million trees by 2025 out of the water. It has also kept to a 1992 commitment to keep well over half of its total land area covered in forest, and it has restored biodiversity and mitigated climate change impacts across tens of thousands of hectares of forest.⁴

The EU’s role in facilitating global trade should not only focus on compliance and regulation but also on fostering international cooperation. By designating Malaysia as a ‘low-risk country,’ the EU would not only streamline trade but also show the world that economic growth and environmental protection can go hand in hand. This recognition could set a powerful precedent, encouraging other nations to adopt similar sustainable practices and demonstrating that environmental progress should be a central consideration in trade policy. Moreover, fostering such cooperation can create long-term partnerships, ensuring that both economic prosperity and environmental sustainability are prioritized, benefiting consumers and businesses alike. The EU must seize this opportunity to promote a smarter, more inclusive trade strategy that encourages mutual growth and responsible environmental stewardship.

This litany of costly actions shows more than a little goodwill. Companies that export products into the EU want nothing more than to trade freely with their European customer businesses. The EU should recognize that and clear their path, rather than pursuing the Trumpian path of putting up walls and closing themselves off to free trade, at the expense of their own people and their wallets. Europe must not copy Trump. It should lower trade barriers, not raise them.