KUALA LUMPUR (April 16): The European Union's (EU) planned restriction on the use of palm oil in biofuel is a factor that led to the suspension of negotiations on the proposed Malaysia-EU Free Trade Agreement (FTA).

Malaysia's International Trade and Industry Ministry Deputy Secretary General Datuk Seri Norazman Ayob said Malaysia does not preclude the possibility of taking other measures that will have far reaching implications on trade relations between Malaysia and the EU. 

“Relations have to be based on reciprocity, not one way," Norazman said in his speech here today at the EU-Malaysia Trade and Investment Forum.

Norazman said Malaysia and Indonesia have appealed to other Asean member countries to not elevate the Asean-EU strategic level partnership, and that a working group has been developed by the EU to iron out issues between the two blocs. 

French Ambassador to Malaysia Frédéric Laplanche said in his keynote address the EU will continue to buy Malaysian palm oil. Laplanche said he is convinced that the palm oil dispute will be resolved.

Laplanche said the EU is Malaysia's second-largest export destination for crude palm oil. 

“I am convinced we will find a positive outcome [for the palm oil dispute]. We should not wait any longer to restart negotiations on that agreement [the Malaysia-EU FTA],” said Laplanche. 

During a press conference later, Laplanche said the trade relationship between Malaysia and the EU is dynamic and varied against the current backdrop.

He said today that total trading volume between Malaysia and the EU in 2018 stood at some €40 billion (about RM186.18 billion) from  about €28 billion ten years ago.

Today, Laplanche said this in response to a query on whether the tone of the trade relationship between Malaysia and the EU had changed as result of the palm oil dispute.