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Malaysia in transition

Malaysia threatens to freeze out EU over palm oil ban

Foreign ministry pointed to similar action taken by Indonesia

The European Union consumes 11.6% of the palm oil produced by Malaysia. Pictured here is a factory outside Kuala Lumpur that processes palm oil.      © Reuters

KUALA LUMPUR -- The Malaysian government said that a recent regional agreement to upgrade relations with the European Union should be deferred due to an ongoing trade dispute over palm oil, where the EU has been moving to ban the use of palm oil in biofuels, citing deforestation as a reason.

Malaysia and other nine members of the Association of Southeast Asian Nations, or ASEAN, and the EU issued a joint statement on Jan. 21 to upgrade their long-standing relations to a "strategic partnership," a term that usually denotes cooperation on a wider scale.

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