Conflicts Between Environmental and Trade Norms: A Legal Analysis of the Application of the European Union Deforestation Regulation (EUDR) to Indonesian Palm Oil Exports Based on the GATT-WTO Legal Framework

Abstract

The implementation of the European Union Deforestation Regulation (EUDR) marks a paradigm shift in global trade that integrates stringent environmental standards, but creates tensions with the principles of trade liberalization. This study aims to analyze the compatibility of the EUDR with the European Union's international obligations within the framework of the General Agreement on Tariffs and Trade (GATT) 1994, and its impact on Indonesian palm oil exports. Using a normative juridical analysis method, this study examines the due diligence mechanism, benchmarking system, and the rejection of the equivalence of national standards (Indonesian Sustainable Palm Oil/ISPO). The analysis results indicate that the EUDR has the potential to violate the Most-Favored-Nation Principle (Article I) and National Treatment (Article III) of the GATT due to the asymmetric compliance burden that discriminates against Indonesian palm oil products compared to European vegetable oils and products from "No Risk" countries. Although the EU can use the argument of the general exception of Article XX letter (g) regarding natural resource conservation, the implementation of the EUDR is deemed to fail to meet the requirements of Chapeau Article XX because it is unilateral, rigid, and contains elements of disguised trade restrictions. Furthermore, strict geolocation and segregation requirements risk excluding smallholder farmers from global supply chains. Therefore, Indonesia has a strong legal basis to file a dispute with the World Trade Organization (WTO) and urge the establishment of a special lane (Green Lane) for ISPO-certified products.