Malaysia could call off several trade deals with EU countries, including the purchase of new fighter jets for its military, if the European bloc goes forward with its planned phase-out of palm oil biodiesel.
Malaysia had been looking to replace its older Russian MiG-29 aircrafts with up to 18 new ones, but Defense Minister Datuk Seri Hishamuddin Hussein said the negotiations, which involved at least France and the UK, could be put on ice if the EU palm oil ban was implemented, The Edge Markets reported on 8 March.
Hussein said that bilateral relationships involved all aspects of the negotiating countries and could not be detached from economic considerations.
“Let the negotiation take its course, but I would like to see our bilateral partners being genuine and not see us as a country they can sell assets to,” Hussein said.
Malaysia was considering several options for the fighter jets, including a US$2bn deal for Rafale fighters manufactured by French Dassault Aviation and the Eurofighter Typhoon planes by a consortium of Airbus, Aleniea Aermacchi and BAE Systems.
The country’s Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong also stressed that the EU-Malaysia free trade agreement negotiations could not be picked up again until the palm oil case was resolved.
“Palm oil is our most important export. In this free trade agreement, this issue must be resolved first. There will be no conclusion on EU trade talks without a resolution on palm oil,” said Mah.
The European Parliament voted in favour of a proposal to remove palm oil-based biodiesel from the EU’s list of sustainable renewable fuels by 2021 in January.
Malaysia sees the proposal as unfair and discriminatory and likens it to crop apartheid.