LETTER | The European Union appears to be standing firm with its decision to ban Malaysian palm oil for biodiesel, due to the process said to promote deforestation.

In return, there were suggestions by certain quarters for Malaysian government to take reciprocal action against EU products to Malaysia.

Even though these suggestions are relevant to show our firmness to protect the industry, there are many things to take into consideration before executing any plan.

The fact remains Malaysia is a trading nation and our economy relies largely on foreign direct investment and trading activities.

Based on Matrade statistics, the total value of trade between Malaysia and EU from January to November 2017 was RM157.56 billion, of which Malaysia enjoyed a trade surplus of approximately RM16.32 billion.

On top of that, in terms of FDI, EU emerged as a largest investor in Malaysia with the total investment influx from January to September 2017 being RM5.77 billion.

With that in mind, any wrong decision taken by Malaysian government will ruin the country’s reputation, and affect other major export products, such as gloves where Malaysia currently controls almost 65 percent of the world market.

In this situation, as a small nation with small population, Malaysia should continue negotiations with EU, and show full commitment to improve the production process in a better way to lift the ban.

Furthermore, it is high time for Malaysia to explore new untapped markets in the near future especially in the Middle East, Africa and BRICS countries. By doing so, we would be able to secure the industry as we do not put all the eggs in one basket.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.