Tit-for-tat action on EU will not help

THE European Union appears to be standing firmly by its decision to ban the use of palm oil for biodiesel.

In response, there were suggestions by certain quarters for the Malaysian Government to take reciprocal action on EU exports to Malaysia.

Even though these suggestions are relevant to show our commitment in protecting the palm oil industry, there are many things to take into consideration before executing any plan.

The fact remains that Malaysia is a trading nation and our economy relies largely on foreign direct investment and trading activities.

Based on statistics from Matrade, the total value of trade between Malaysia and the EU from January to November 2017 was RM157.56bil, with Malaysia enjoying a trade surplus of about RM16.32bil.

Furthermore, in terms of FDI, the EU is the largest investor in Malaysia with total investments from January to September 2017 amounting to RM5.77bil.

With that in mind, a wrong decision would damage the country’s reputation and affect other major export products such as gloves. Malaysia currently controls almost 65% of the world market in gloves.

As a small nation with a small population, Malaysia should continue to negotiate with the EU while showing full commitment at improving the palm oil production process, which is deemed to contribute to deforestation and its associated problems.

It’s also high time for Malaysia to explore new markets especially in the Middle East, Africa and the BRICS group.