World

Malaysia could face trade sanctions: PM Mahathir

KUALA LUMPUR: Malaysian Prime Minister Mahathir Mohamad said yesterday that his exports-reliant country could be hit with trade sanctions amid rising protectionism highlighted by the United States-China tariff war.

Dr Mahathir did not mention the source of possible sanctions, but said he was disappointed that proponents of free trade were now indulging in restrictive trade practices on a "grand scale".

"Unfortunately, we are caught in the middle," he told a conference in Kuala Lumpur, referring to the US-China trade war.

"Economically, we are linked to both markets and physically, we are also caught in between for geographical reasons.

"There are even suggestions that we ourselves would be a target for sanctions."

The US and China were two of the three biggest export destinations for Malaysia between January and August this year. Singapore was the top destination.

To cushion the impact of the collision between the two superpowers, Dr Mahathir said Malaysia was collaborating more with its regional neighbours.

He also complained of being bullied by powerful nations, referring to a campaign by European countries against Malaysia's agricultural mainstay of palm oil.

The edible oil contributed 2.8 per cent of the country's gross domestic product last year and 4.5 per cent to total exports.

"Having cleared most of their forests and refusing to reduce their noxious emissions, they now try to impoverish the poor by preventing them from clearing their forest for living space and earning a living," he said.

The European Union had passed an act earlier this year to phase out palm oil from renewable fuel by 2030 due to deforestation concerns. - REUTERS

BUSINESS & FINANCE