M'sia will respond with trade restrictions if EU limits use of palm oil in biodiesel

KUALA LUMPUR: Malaysia will respond with a trade restriction if the European Union (EU) proceeds with its plan to limit the use of palm oil in biodiesel, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong (pix).
"Currently, Malaysia is still using the diplomatic channel to resolve the issue, however, if these suggestions are not in Malaysia's favour, we are ready to respond, including limiting the purchase of certain goods from the EU," Mah told the Dewan Rakyat on Wednesday.
He was responding to Datuk Seri Irmohizam Ibrahim (BN- Kuala Selangor) on the strategic measures taken to address the import ban on palm oil to the EU market and the contingency plan if a comprehensive solution cannot be achieved.
Mah said the EU 's move to ban the use of palm oil in biofuels is a form of "crop apartheid", which is discriminatory and is against the World Trade Organisation's (WTO) commitment to achieve a progressive higher level of trade liberalisation.
He added Malaysia has taken proactive measures by engaging in negotiations with several EU countries and educating stakeholders on the impact to the palm oil industry should the EU proceed with the plan.
"I have spoken to several EU countries and some of them also think that the EU Parliament draft is a form of discrimination and goes against the WTO's principles," he said.
The EU in mid-January approved draft measures to reform its power market and reduce energy consumption to meet more ambitious climate goals.
The draft includes banning the usage of palm oil in motor fuels from 2021.
Mah said the EU's proposal is a "poverty trap" for 650,000 farmers and some other 3 million Malaysians who are depending on the palm oil industry to make a living.
He added the palm oil industry is a significant contributor to the nation's GDP where the industry has exported RM77.8 billion palm oil products, or 8% of the nation's exports last year.