LANGKAWI, Malaysia: The European Union risks opening up a trade war with Malaysia over its “grossly unfair” policies aimed at reducing the use of palm oil, Prime Minister said on Thursday.
This month, the European Commission concluded that palm oil cultivation results in excessive deforestation and its use in transport fuel should be phased out by 2030.
Malaysia, the world’s second biggest palm oil producer after Indonesia, relies on the crop for billions of dollars in foreign exchange earnings and hundreds of thousands of jobs.
Mahathir, 93, said the EU’s increasingly hostile attitude towards palm oil, a commodity used in everything from chocolate spread to lipstick, was an attempt to protect alternatives that Europe produced itself, like rape seed oil.
“To do that kind of thing to win a trade war is unfair,” Mahathir told Reuters in an interview on Langkawi, a tropical resort island 30 km off Malaysia’s mainland.
“Trade wars are not something we like to promote but on the other hand it is grossly unfair for rich people to try and impoverish poor people.”
Mahathir, an architect of modern Malaysia and a trained physician, swept to power in a stunning election victory last year on a promise to revive a flagging economy and end the corruption that plagued the tenure of former leader Najib Razak.
Najib is facing numerous corruption charges over the alleged misuse of billions of dollars from Malaysian state fund 1Malaysia Development Berhad (1MDB), some of which was raised by U.S. investment bank Goldman Sachs through bond sales.
Najib is due in court next week in the first trial relating to 1MDB. He has pleaded not guilty and denies wrongdoing.
Goldman Sachs is facing charges in Kuala Lumpur over its role in helping raise $6.5 billion for 1MDB. Goldman denies wrongdoing and says officials under Najib’s administration lied to mislead its staff.
