BANGKOK – As the United States and China tussle over tit-for-tat tariffs, another trade spat between West and East is quietly playing out, one pitting Malaysian palm oil against European fighter jets. When the European Union announced in March that it would phase out the use of palm oil as a transport biofuel by 2030 over environmental concerns, the world’s two largest palm oil exporters — Indonesia and Malaysia — were quick to react, threatening to lodge complaints with the World Trade Organization. Malaysian Prime Minister Mahathir Mohamad told Reuters that the EU risked starting a trade war over “grossly unfair” policies that smacked of protectionism, then named the first potential casualty. He said that if the EU went through with the phase-out, Malaysia would turn away from European defense contractors and look to China to fill its order for new fighter jets, a deal likely worth upwards of $1 billion. It remains to be seen how Malaysia’s brinkmanship will play out. The Malaysia Palm Oil Council warns that the new EU rules could deliver a “significant” blow to the industry, which it says contributed 6% to the country’s GDP in 2017. Upwards of 12% of the palm oil it… Read full this story
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