Malaysia minister accuses EU of palm oil 'trade war'

Cyclists ride past palm oil trees during the third stage of the Malaysian Le Tour de Langkawi cycling race from Muar to Putrajaya in Muar on April 8, 2019.
Cyclists ride past palm oil trees during the third stage of the Malaysian Le Tour de Langkawi cycling race from Muar to Putrajaya in Muar on April 8, 2019.PHOTO: AFP

BRUSSELS (AFP) - Malaysia on Monday (May 6) accused the EU of launching a "trade war" over a plan to curb the use of palm oil in biofuels and threatened retaliatory action at the WTO.

The South-east Asian country is the world's second-biggest palm oil producer after Indonesia and would be hit hard by the EU's plan to phase out its use in biofuels by 2030.

Ms Teresa Kok, the Malaysian minister responsible for palm oil, is beginning a tour of European capitals to press her case, but vowed that her government would fight back if the EU did not back down.

"We see this as a form of trade war by the EU against Malaysia and Indonesia as palm oil-producing countries," she told AFP.

"We will definitely look at what are the kind of trade items that we import from Europe and we will be looking at other countries (to source them)."

Ms Kok said Malaysia would consult with Indonesia before looking what action could be launched at the WTO.

Palm oil is a a major ingredient in a wide range of products from food to cosmetics, but it has long been controversial as environmentalists say it drives deforestation, with huge swathes of rainforest logged in recent decades to make way for plantations.

Its use in food and cosmetics has already dropped in Europe, partly due to pressure from green groups on major corporations, but has been increasing in biofuels.

Ms Kok doubled down on a threat by Malaysian Prime Minister Mahathir Mohamad to retaliate over palm oil by buying new fighter jets from China instead of France's Rafale jet or the Eurofighter Typhoon.

"Our Prime Minister say he likes the fighter jets of China, but our Defence Minister two weeks ago had gone to Russia to look at their weapons and planes," she said.

"And Russia is willing to buy more palm oil from Malaysia. So we're looking at all these options."