KUALA LUMPUR: As Malaysia is an open economy, the government cannot impose a blanket ban on trade with the European Union (EU), but it can collaborate with government-linked companies to determine where to buy and sell goods amid the economic bloc’s threat to ban import of palm oil, said International Trade and Industry Minister Mustapa Mohamed.

He said a total ban on trade with the EU would be complicated as many European companies were present in Malaysia and vice versa.

“That (total ban) will result in a lot of disruption to the world (including Malaysia) because there are many EU companies with businesses in Malaysia, including German, Dutch, French, British and Swedish companies, hundreds of them.

“But when it comes to government purchases, we have 100% leverage on where we want to buy, such as the purchase of defence equipment. The same goes for the government-linked companies,” he said after officiating the launch of the Sime Darby Plantation Operational and Productivity Excellence Summit here today.

As for the private sector, Mustapa said, with Malaysia as an open economy, the government could not control the private sector.

The proposal for a trade ban on EU was put on the table following the EU parliament’s decision last month to exclude the use of palm oil in biofuels by 2021.

So far France, Sweden and the majority of UK Members of European Parliaments (especially those from the Conservative Party) have opposed the EU palm oil resolution.