Friday, 12th MAY

Economic geography perspectives on internationalization, trade, and trade policy negotiations:

Asia, palm oil and multi-stakeholder bargaining

Instead of analyzing company strategies solely, economic geography research often casts attention to the interplay between the company and its surrounding environment. It also aims to understand international trade as a multi-scalar and multi-stakeholder phenomenon. The questions posed could concern, for example, the impact of trade policies on firms in a specific institutional environment, or the participation of companies in global production networks as a constituent to international trade. The relationship between firms and the state, as well as sustainable development issues and responsible business are more and more in the core of this research. An example are the trade policy negotiations between the EU and Asian countries, such as Indonesia, with which free trade talks became difficult due to the palm oil issue.

Palm oil is a commodity used in the production of food ingredients, non-food consumer products and biofuels. Most of the world’s palm oil is produced in Indonesia where oil palm cultivation gives a living to 16 million smallholders and workers. At the same time, oil palm monoculture farming results in deforestation, biodiversity loss, climate change, and social problems arising from violations of human rights and indigenous land rights – all of which the EU has strongly criticized. The Russian attack to Ukraine and the ensuing global food crisis have, however, turned the attention to global food security. The problem is multifaceted. In our Kone Foundation funded project “Good and bad palm oil: Food security, paradigm shift and bargaining among stakeholders in Indonesia and the EU” (2023-2027), we study the contested issue of palm oil production, policy, and ethics. We will explore the “good and bad” of palm oil in the arguments and negotiations of key stakeholders, and aim to 1) contextualize the paradigm shift in the palm oil narrative, 2) understand its impacts on the power relations and negotiations between the stakeholders, and 3) analyze the impacts on primary producers in Indonesia, and more broadly, on global food security.

Erja Kettunen-Matilainen, Senior Research Fellow in Economic Geography, University of Turku, erja.kettunen-matilainen(AT)utu.fi