Malaysian PM urges Britain to 'break with Europe' on palm oil: Bloomberg

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[August 19, 2019]  KUALA LUMPUR (Reuters) - Malaysian Prime Minister Mahathir Mohamad on Monday called on Britain to engage with palm oil growers to incentivise sustainable production, rather than pursuing boycotts after its scheduled exit from the European Union (EU) on Oct. 31.

Malaysia's Prime Minister Mahathir Mohamad speaks during the opening ceremony of the 20th Asia Oil & Gas Conference in Kuala Lumpur, Malaysia June 24, 2019. REUTERS/Lai Seng Sin

Mahathir's comments, carried in on opinion column for news agency Bloomberg, follow a move by the EU to phase out palm oil usage in biofuels. Top growers Indonesia and Malaysia have said they would file a complaint to the World Trade Organization to challenge the move.

"A fresh attitude toward palm oil, unencumbered by influential special-interest groups, could lead to even better trade terms between the U.K. and the (Southeast Asia) region than it currently enjoys," Mahathir wrote in a column carried on Bloomberg's terminals and website.

"We hope to avoid a trade war with Europe," he wrote. "But if one transpires, that doesn't mean the U.K. has to get caught in the crossfire."

In March, the European Commission had determined that palm oil cultivation had resulted in excessive deforestation and it should no longer be considered a renewable transport fuel, albeit with some exemptions.

While Mahathir acknowledged the importance of environmental sustainability and deforestation in trade talks, he said, "The answer is not to single out one commodity and ban it" and called the EU's move "a form of modern colonialism that has no place in today's world".

(Reporting by Emily Chow; Editing by Kenneth Maxwell)

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