Government, business and lobbyists: The politics of palm oil in US-Malaysia relations

• Main Author: Shakila Parween, Y.
• Format: Conference or Workshop Item
• Published: 2016
• Subjects: H Social Sciences (General); HC Economic History and Conditions
• Online Access: http://eprints.um.edu.my/15967/

In the early twentieth century, Malaysia-U.S. economic relations were dominated by resource trading in rubber and tin. Post World War II, these commodities became the source of irritants between the two countries when the US government disrupted market prices by releasing their large rubber and tin stockpiles into the world market. When British companies began to diversify into palm oil in the early twentieth century Malaya, post-colonial Malaysia secured, and continues to retain, its position as one of the world’s largest exporters of palm oil. The similarity between palm oil, rubber and tin as trading commodities is limited to the development of Malaysia-U.S. economic relations. Unlike rubber and tin, which mainly involved government to government transactions, palm oil became fraught with controversy owing to involvement of the Congress and lobby groups representing government and corporate interests. Both these stakeholders have been persistent in their resistance to the import of palm oil on the basis of the commodity’s negative reputation and publicity. The smear campaign against palm oil ranged from the initial health concerns to issues of environmental degradation. As a result of the inordinate influence of the soybean and corn constituencies on the US Congress, all efforts to debunk the myths and counterbalance the propaganda against palm oil by the Malaysian government, public agencies and corporate personalities fail to transform the political attitude. Lobby groups, by virtue of their representation of big business, influence the policy-making process and shape policy outcomes, which in this context define attitude towards and acceptability of palm oil. Thus, the convergence of these stakeholders – corporate and political entities in the US – against trade in palm oil has contributed to an undercurrent of tension in US-Malaysia bilateral relations. This study provides insights into the realities of trilateral relations between governments, big businesses and lobbyists and their impact on economic ties between the two countries.