The move comes after the EU was unable to meet the deadline to adjust its palm oil–related policies in line with the panel’s recommendations.

Indonesia considers this situation as providing a legal basis to seek authorization to suspend concessions under WTO dispute settlement rules.

Indonesian Trade Minister Budi Santoso stated that the measure is part of the dispute settlement mechanism provided by the WTO and aims to safeguard Indonesia’s trade rights.

“The suspension of concessions will focus on the goods sector, but it remains open to other sectors. We will carefully calculate the scale of losses and handle the case effectively while maintaining bilateral relations with the EU,” Budi said in an official statement received by on Sunday (March 8, 2026).

According to Budi, the measure aligns with Article 22.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), which allows an affected party to request authorization to suspend concessions if the other party fails to comply with the panel’s ruling.

In the palm oil dispute case (DS593), the EU was previously found to have failed to align its palm oil policy with the WTO panel’s decision and had not provided balanced compensation to Indonesia.

“The step taken by Indonesia is in accordance with commitments under WTO dispute settlement rules. Indonesia may seek authorization from the DSB to suspend concessions to safeguard its rights should the EU continue to disregard the panel ruling,” Budi added.

Supported by Palm Oil Industry

The government’s move has been coordinated across several ministries and institutions and has received support from Indonesia’s palm oil industry players.

Industry associations such as the Indonesian Palm Oil Association (GAPKI) and the Indonesian Biofuel Producers Association (APROBI) expressed their support for the government’s legal efforts at the WTO.

APROBI Vice Chairman Catra De Thouars said the EU’s non-compliance with the WTO ruling has caused significant losses for Indonesia’s palm oil sector.

“The losses are substantial each year due to the loss of export potential. We appreciate the Indonesian government’s efforts and support further legal steps to ensure business certainty for the national palm oil industry,” Catra said.

Industry players argue that EU policies restricting the use of palm oil, particularly in the energy and biodiesel sectors, have affected market access for Indonesian palm oil products in the region.

Maintaining Trade Relations

Despite the legal action, the government stressed that the move is not intended to damage Indonesia’s trade relations with the EU.

Indonesia remains committed to maintaining bilateral ties while continuing constructive dialogue with its trading partner.

For Indonesia, the palm oil industry is a strategic sector contributing significantly to national exports, employment, and regional economic growth.

Therefore, the government believes it is essential to ensure Indonesian palm oil products receive fair treatment in international trade, in accordance with WTO principles.