Colonialism Beneath Protectionism: The Trade Disputes Between Indonesia and the European Union

Author: Daniel Situmeang

Since the mid-20th century, many developing countries have been freed from the shackles of European colonial rule. Indonesia itself has been recognized as an independent state by the Netherlands since 1949. However, nearly eight decades after that event, the shadow of colonialism still haunts in the form of European Union (EU) trade policies, which have recently become increasingly protectionist against non-European products, including Indonesian ones. Indonesia is not standing idly by and is fighting back.

The discrimination of EU trade laws

In 2019, Indonesia initiated a dispute with the EU at the World Trade Organization’s Dispute Settlement Body (WTO DSB) over the implementation of Renewable Energy Directive II (RED II), which categorizes palm oil biofuel, one of Indonesia’s most significant exports to the EU, as a high-ILUC-risk commodity due to its association with mass deforestation (Heriani, 2025). Indonesia argued that the regulation was discriminatory because RED II did not apply to canola and sunflower oil products produced by the EU itself. Furthermore, the EU was deemed to have failed to review the data used to determine high-risk biofuels and to implement procedures for certifying low-ILUC-risk commodities. Consequently, the WTO DSB agreed with Indonesia’s arguments and ordered the EU to immediately evaluate the regulation. At the same time, the WTO’s DSB also ruled that Indonesia’s anti-dumping and countervailing duties on stainless steel products were inconsistent with WTO rules, particularly the Agreement on Subsidies and Countervailing Measures (Cicilia & Riswan, 2025). Unfortunately, the EU appealed the ruling, prolonging the dispute with Indonesia.

This dispute seems to demonstrate that the EU is paying little attention to, and even hindering, the efforts of developing countries to grow their economies. Indonesia is not the only developing country to have a trade dispute with the EU. Malaysia, Brazil, and Colombia are three of a number of countries experiencing the same fate. Although the EU asserts that its established rules are intended to protect consumers and encourage the implementation of ethical capitalism, it cannot be denied that, behind this narrative, there are hidden motivations to fulfill self-interests that are not only mercantilist but also colonial in nature (Israel, 2025). This controversial observation is too realistic to be dismissed as mere opinion.

A form of neo-colonialism?

Despite the EU’s attempts to dismiss these arguments, there is ample evidence to the contrary. First, EU trade regulations, such as RED II, which purportedly “protect environmental sustainability,” force developing countries to adopt EU environmental standards that are difficult to implement due to their limited economic and technological capabilities. While the EU has developed large-scale green technologies and has an integrated environmental policy, Indonesia still relies heavily on fossil fuels. Complicated requirements, expensive certification processes, and ambiguous legal definitions also hinder developing country industries from accessing the EU single market. Furthermore, differing principles also hinder the equivalence of environmental standards. For example, when the EU asserts that there is no sustainable palm oil on the market, Indonesia claims that palm oil is the most sustainable alternative (Hinkes in Kinseng et al., 2022). These two cases highlight the biased and ‘Eurocentric’ nature of EU trade requirements for Indonesia. In this situation, the EU clearly believes that its standards are far superior to those of Indonesia and other developing countries.

Secondly, at the same time, the process of economic liberalization in developing countries paved the way for renowned European products and industries to dominate, generally at the expense of local industries. From automotive (Volkswagen and BMW) to fashion (H&M and Zara), European products have long dominated the Indonesian market. Meanwhile, Indonesian products, such as biodiesel and palm oil, are banned from entering the European market.

“In Indonesia, local products are not necessarily traded as much as European products, let alone exported to Europe.

Hence, it can be concluded that there is an unequal power relationship between the EU and Indonesia caused by the double standards of EU protectionism. It seems that the EU is looking for a way to balance the need to protect its regional industries from foreign competition with the continued ambition to reap abundant profits from its former colonies. In his book entitled “Neo-Colonialism: The Last Stage of Imperialism,” Kwame Nkrumah (1965) emphasized that colonial nations still seek to control their former colonies by influencing economic, monetary, and cultural aspects with the aim of creating dependency on their former colonizers. This view has proven accurate, at least in the case of Indonesia. The fact that Indonesia has repeatedly sued the EU at the WTO demonstrates that exports of national products to Europe, such as palm oil and stainless steel, are highly valuable (€17.5 billion in 2024) to Indonesia, making it powerless to implement policy changes or find alternative export destinations (Amrin, 2025). This observation is certainly in line with the structuralist perspective that explains how core countries, including European countries, use protectionist policies to advance their ambitions and maintain their power relative to developing countries.

Dilemma between two choices

The EU has changed. What began as a free and competitive trade project has evolved into a system that suppresses competition, stifles innovation, alienates trading partners, and perpetuates a culture of colonialism. This trend must be halted. Otherwise, the EU will inevitably enter a downward spiral that will weaken its competitiveness and image in international trade. Thus, the EU has only two choices: maintain excessive protectionist policies, potentially facing resistance from other countries, or return to the EU’s original vision of an open and inclusive market, allowing Indonesia and other countries access, investment, and fair competition with European industries. For the author, the second option is now clear.

The EU has recently demonstrated a shift in its policy direction by agreeing to the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU CEPA), a partnership agreement aimed at facilitating investment, trade, and technology transfer for both parties. This is commendable given the increasingly tense global trade situation, particularly following the imposition of high tariffs by the United States government. However, the EU remains steadfast in its environmental policy by appealing the WTO ruling. This further reveals that the EU is still far from being ‘anti-colonial.’

In his speech to the European Parliament, Jacques Delors, President of the European Commission (1985-1995) and architect of the modern European Union, outlined three visions that underpinned the organization’s founding: stimulating competition, strengthening cooperation, and uniting solidarity. In the coming years, everyone will ask: Will this vision remain intact, or will it become meaningless jargon?

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Nkrumah, K. (1965). Neo-Colonialism: The Last Stage of Imperialism. Thomas Nelson & Sons, Ltd.

Unveiling Power Politics Behind Najib’s “Red-Carpet” Legal Treatment

Author: Aldi Haydar Mulia

Photo by Bernd Dittrich on Unsplash

In Malaysia, another twist to the tale of the convicted ex-Prime Minister, Najib Razak, has developed yet again. The Court of Appeal ruled that Najib’s house arrest bid should be heard in the High Court, which was previously dismissed in July 2024 (Bedi, 2025). The Court of Appeal views that the Titah Addendum (Addendum Decree) purportedly given by the previous King, Sultan Abdullah (16th Yang Dipertuan Agong (YDPA)) in addition to the Royal Pardon which halved his sentence from 12 years to 6 years—plus financial penalty reduction—in January 2024 and had been the basis of Najib’s case to serve the remainder of his sentence at home, shall be considered and heard in trial scheduled to begin on January 13 (Ramayah, 2025). Although Sultan Abdullah had stated he would not give any official comment on the decree, he urged everyone to stop with the speculation and respect the established laws and procedures (“Pahang Sultan wants end,” 2025). Previously, the opposition bloc, Perikatan Nasional (PN/National Alliance) had pressured the government to be transparent regarding the whereabouts of the decree (Koya, 2025).

The Decree has undeniably caused a stir in Malaysian politics. Firstly, house arrest is not legally inscribed in the Malaysian federal law, moreover coming from such an arbitrary process that oversteps the Federal Law (Faruqi, 2025). The closest Malaysia has to a house arrest is Section 3 and 5 of the Prisons Act 1995, which enables the Minister of Home Affairs to gazette any places for detention and imprisonment lawfully in custody (Faruqi, 2025). Secondly, and more importantly, the decree exemplifies the fragility of the coalition government in the aftermath of United Malay National Organisation (UMNO) remarkable downfall. In times where Malaysian politics are characterized by rising ethnic tensions, party-hopping, and political instability, it allows for “toxic alliances” where unlikely alliances could be made even by political rivals for short-term gains (McCargo & Wadipalapa, 2024; Faruqi, 2022). It includes the enhanced role of Malaysia’s Conference of Rulers (State Sultans), who lately have been involved in the executive chamber, including brokering government formation in the event of a hung parliament—the last three Prime Ministers had been selected in the Royal Palace rather than in parliament (Faruqi, 2022).

Under this political climate, aspiring politicians are open to make deals contrary to their political bases. Yet, why Najib? A popular figure in Malaysian heartlands and son of former Prime Minister, it is known that Najib has been actively campaigning for his release at least since 2018. He cultivates the image of himself as the champion of the people under the tag #Bossku, constantly persuading the people that life was better under his rule (Welsh, 2024). In the meantime, he retained influence in UMNO via his two sons, who were elected as prominent members within the party branch in Langkawi and Kedah. But even so, why is his release supported by UMNO, which suffered heavily after the 1MDB scandal was exposed; the government, which provided acquittal to some of his charges; and the opposition, whose support is seemingly out of the blue and contrary to their proclaimed visions? It requires an examination of Malaysian politics in the tales of intertwined quests: survival, revival, and opportunity. The discussion will proceed in those separate themes that resemble the dynamics each current faction—Pakatan Harapan (PH/Alliance of Hope), Barisan Nasional (BN/National Front), and Perikatan Nasional (PN/National Alliance) are dealt with. The last section attempts to illustrate the issue of the consequences of toxic alliances in Southeast Asia.

Where The Tides Clash

PH

The primary concern of Anwar’s cabinet is its survival, given the short-lived history of the previous administrations. The government does survive three years on, yet survival has put a dent in the cabinet’s reform promises, which, except for the minimum wage increase and the establishment of Parliamentary Special Select Committees to keep the ruling government in check, is far from ideal (Bedi, 2024; Ostwald, 2025). In dealing with the diverse coalition, the government cast contradictory measures to appease Malay conservatives, seen in actions such as increasing the budget of the Malaysian Department for Islamic Development (JAKIM), despite minimal results (Tayeb, 2023). In a similar vein, the High Court decided to grant Zahid Hamidi, Anwar’s Deputy Prime Minister and UMNO’s leader, discharge not amounting to acquittal to his remaining 47 corruption cases in September 2023 (“Ahmad Zahid granted,” 2023).

Anwar’s compromising stance extends to the treatment of Najib’s cases, which can be seen as a measure to keep UMNO in the coalition (Deivasagayam, 2024). Anwar may see the partial pardon as a critical middle way to bridge the political risk in trying to hold the unity government together and pertaining to the reformist stances. The urgency is heightened by PN’s repeated attempts to claw UMNO away from PH, the latest being the blatant support from the opposition leader, Dato Seri Hamzah Zainuddin, who demanded that the government uphold the Titah Addendum in due diligence to the constitutional monarch (Koya, 2025).

Anwar certainly has to assure the PH coalition and constituents, including Parti Keadilan Rakyat (PKR/People’s Justice Party) and Democratic Action Party (DAP), for whom a partial pardon contradicts the reformist ideas foundational to the coalition. Even though the government did pass a few reforms, the backlashes of political deals in Najib’s case could be detrimental to maintain cohesion in the coalition. It should be noted in particular that DAP, a long-time partner of Anwar and PH, is starting to feel uneasy about the situation, and with only two years remaining before another general election (Morden & Ting, 2025), it is imperative to avoid further cracks emerging.

BN

For BN, and particularly Zahid Hamidi, the circumstances are complicated. Despite their significant role in forming a parliamentary majority, BN and its members remain a shell of their former selves. The partnership that was once based on patronage provided by UMNO slowly breaks down as their dominance falters, prompting the Malaysian Indian Congress (MIC) and Malaysian Chinese Association (MCA) to consider an exit from the coalition due to diminishing rewards from allying with UMNO.

Amid the faltering dominance and dwindling reputation, Najib could offer hopeful aspirations for UMNO (Hamdan, 2024). UMNO members are pushing to bank on Najib’s popularity and image as a means of the party’s revival. . However, if UMNO desires a fully-fledged pardon, Najib’s comeback would be detrimental to the existing leadership, primarily for Zahid, whose seat will eventually be challenged by Najib. Najib is understood to be more popular than Zahid due to Zahid’s inability to convince party members that working with PH, particularly the Chinese DAP, is beneficial for UMNO (Sani, 2023). Thus, Zahid has to prove that the partial pardon is a symbol of progress in fulfilling the members’ desire to pardon Najib.

Furthermore, the political risk to release Najib is too grand as the recent polls have indicated UMNO’s strong association with corruptive practices that resulted in the last election, where voters instead voting for PN parties, primarily PAS who have promoted themselves as the champion of clean and Islamic voices in Malaysian politics–primarily desired among Malay youths (Chai, 2023; Mohammad & Suffian, 2023; Shukri, 2024). However, it might be possible for UMNO and BN to explore a revival of Mufakat Nasional (National Concord) with PAS, plus BERSATU, that strongly emphasises identity politics of Malays—an option that “necessitates” the removal of Zahid, who is currently embedded with the PH government (Sani, 2023).

PN

At least on paper, PN’s motive is clear: they need UMNO and BN to consolidate their claim for power. BN still holds thirty seats in the parliament, which is substantial to garner oppositional numbers. PN may realise that, at least in the short term, obtaining UMNO is crucial to establishing a winning coalition. This is particularly true for PAS, which has been in the past making close connections with Najib since he was in power to promote hudud law and strengthening Islamic law enforcement in Kelantan (Deivasagayam, 2024).

However, the practice is not so clear for two reasons. First, by aligning their ties to the corrupt image of UMNO, it will paint a confusing scenario for its supporters, who have opted for PN due to their increasing dissatisfaction with UMNO. After all, PN leaders were present at the January 6 rally, whereas they also preach anti-corruption messages to their supporters. Second, there is an internal rift within the coalition that will hinder any substantial commitment from PN. The distrust is apparent in a few occasions where PAS, BERSATU, and other parties within PN were at odds with another over a supposedly unilateral decision, such as the disunity in supporting Najib, and PAS’ decision to appoint Dr Mahathir Mohammad to become the advisor for the SG4, a group of four state governments in which PN leads (Kaur, 2025). Although it may benefit PN to show support for Najib to sway BN in the short term, they risk fracturing their constituents for an uncertain future.

The Price of Toxic Alliances The ambiguous tug-of-war between political factions in Najib’s case handling resembles a grander picture of toxic alliances normality in Malaysian politics. Najib may still have two cases awaiting (1MDB bribery and fund embezzlement worth RM2.3 billion, and SRC International fund embezzlement worth RM27 million) to add to his discharged and sentenced cases, but the focus on short-term compromises could hamper public trust towards Malaysian democracy. Instead of championing “unity” as the government claims to be, it perpetuates the alienation of voters who have been increasingly anxious and indifferent to the politicians they support (McCargo & Wadipalapa, 2024).

Furthermore, it opens a possibility for extraconstitutional measures and powerholders to step in and set a precedent for future erosion in an established political system. The increasing reliance on the Conference of Rulers in Malaysian politics to decide executive matters shall serve as a warning. Najib’s possible return and popularity amid recent circumstances shall be watched closely. Unfortunately, this toxic alliance happens across Southeast Asia. Unlikely alliances are made left, right, and centre without regard for their constituencies, except for dozens of gimmicks and electoral promises during the election. Even after the election, the deals are broken and remade to reflect the dynamism of short-term interests. Contradictory stances are the norm rather than the exception. The complicated case of the convicted Malaysian ex-Prime Minister, Najib Razak, shows that political pragmatism remains a triumphant force amid hopes for democratic reform.

Thank you to Seth Akmal, who has contributed to this article.

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Author’s Bio:

Aldi Haydar Mulia is a Bachelor of Social and Political Science from the Department of International Relations, Universitas Gadjah Mada. He is interested in the issue of international political economy and development. He is now working as a faculty staff at the Faculty of Social and Political Sciences, Universitas Gadjah Mada.