Malaysia to respond with ‘might and tact’ if EU proceeds with palm oil curbs

KUALA LUMPUR: Malaysia will respond with “might and tact” if the EU proceeds with a plan to limit use of palm oil in biodiesel, a cabinet minister said on Tuesday.
“Malaysia does not want a trade war with Europe but if one is foisted on us, we will respond with might and tact,” said Mah Siew Keong, Malaysia’s minister for plantation industries and commodities, speaking at an industry conference in Kuala Lumpur.
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 Malaysia, the world’s second-biggest producer of the oil used in everything from soap to foodstuffs, would withhold cooperation on trade talks if the E.U. move is confirmed. A significant portion of the palm oil exported to the EU is used as feedstock to make biofuel, leaving Malaysia’s producers fearing overall demand will fall.
“There will be no trade negotiations until we solve the palm oil issue,” Mah said, describing the EU’s plan as “discrimination.”