It is "justified" for small, developing nations to enjoy some form of protectionism because they cannot compete on equal footing against large trading countries, Malaysian Prime Minister Mahathir Mohamad said on Monday.

Speaking at a conference in Tokyo, he said that countries that are still growing need some "privileges." In fact, small countries like Malaysia find difficulty in competing in a free trade world, he said.

"We have to recognize: Just as there are infant industries, there are infant nations, nations which are just beginning to grow. They need to have some privileges, some protection for themselves, because they are not in position to compete with the great trading nations, the great manufacturing nations of the world."

Moreover, Mahathir declared, countries have been paying "lip service" to free trade, while "most countries practice some kind of restriction."

For instance, he said, Malaysia has an ambition to produce vehicles, but has hit roadblocks in entering the markets of other countries, which attach conditions to the import of cars. Germany exports a lot of vehicles to Malaysia, he said, but "Malaysia cannot export even one single car to Germany."

Although Malaysia originally joined the Trans-Pacific Partnership (TPP) trade agreement, the prime minister said he "was not very keen on it" because he thought it would affect his country adversely. Mahathir added that the U.S., which pulled out of the original agreement, "no longer espouses free trade."

"When the world today talks about free trade, it is quite obvious that even the developed countries find that free trade is not so acceptable, especially now in America, where it is actually indulging in protected trade. And if America, a huge country with the biggest economy in the world, the richest country, believes in restriction of trade, it is not justified," he said.

"But for small countries, it is justified because small countries cannot compete on the same terms as the big countries," the Malaysian leader added.