Malaysia likely next victim of trade sanctions by United States

Lately, Malaysian Prime Minister, Mahathir Mohamad has expressed concerns that his exports-reliant country could be hit with trade sanctions amid rising protectionism highlighted by the Sino-US tariff war. While Mahathir did not mention the source of possible sanctions on the Southeast Asian country, he expressed disappointment the way proponents of free trade were now indulging in restrictive trade practices on a grand scale.

“Unfortunately, we are caught in the middle,” said Mahathir referring to the Sino-US 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,” he added

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 superpowers, Mahathir said Malaysia was collaborating more with its regional neighbors.

Mahathir also complained of being bullied by powerful nations, referring to a campaign by European countries against Malaysia’s agricultural mainstay, palm oil. The edible oil contributed 2.8% of Malaysia’s gross domestic product last year and 4.5% 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 passed an act earlier this year to phase out palm oil from renewable fuel by 2030 due to deforestation concerns.

There are also concerns that India, one of the biggest buyers of Malaysian palm oil, would restrict imports of the product due to a diplomatic row over comments made by Mahathir on New Delhi’s recent actions in the disputed South Asian region of Kashmir.

Moreover, countries are reeling under the pain inflicted by a trade war between the most powerful economies; there is international political turmoil; savage conflicts and widespread terrorism are killing millions; and budgets that should be devoted to helping the poor are being used to buy and maintain expensive weapons of war, he said.

“There is something wrong with our way of thinking, with our value system … we still believe that conflict between nations can be resolved with war,” added the Malaysian Prime Minister.

He went on to say that “free trade” means “no protection” for small countries and their small industries, with simple products of the poor subjected to clever barriers that prevent their sale to rich markets. At the same time, globalization, despite its benefits, has imperilled the independence of smaller countries.

Applauding the efforts of the UN to end poverty, protect the environment and bring peace to all countries, Prime Minister Mahathir, underscored the need for reform in the Organization, particularly the Security Council.

“Five countries on the basis of their 70-year-old war victories cannot claim to have a right to hold the world to ransom forever,” he said, underling the need to reform the veto rights in the Security Council.