Malaysia Stands Firm on “Red Lines” in US Trade Talks
Ongoing trade negotiations between Malaysia and the United States face potential roadblocks as Malaysia asserts its non-negotiable “red lines,” prioritizing national interests over a quick agreement.
Key Sticking Points
Tengku Zafrul emphasized that Malaysia will not compromise on matters of national interest or agree to a deal simply for the sake of reaching an agreement. He noted “There were specific red lines that we would not compromise on.”
These “red lines,” according to Tengku Zafrul, encompass policies and laws, including government procurement policy, designed to safeguard Malaysia’s national interests, particularly regarding digital trade.
Specifically, Tengku Zafrul cited the ability to impose a digital tax, currently at 6 percent on foreign digital service providers, as a crucial red line. Further discussions are underway with relevant agencies and ministries that “also have their red line”.
Halal Certification Hurdles
Discussions also involve industrial and agricultural products, non-tariff barriers, and digital trade. Tengku Zafrul highlighted sensitivities surrounding halal certification as another potential barrier.
The United States seeks to export agricultural products, like beef and poultry, to Malaysia. Tengku Zafrul suggested “Maybe when we talk about halal certification, we can look at ensuring that the halal standards that they (the US) have are at par with our standards.”
Trade Balance Considerations
Achieving consensus extends to economic security, the purchase of US-made products, and increasing investments in the US to help balance Malaysia-US trade. These discussions occur against a backdrop of increasing trade between the two nations; in 2022, Malaysia’s exports to the U.S. were valued at $47.3 billion (US Census Bureau).
According to Tengku Zafrul, Malaysia has engaged extensively with its US counterparts, having “cumulatively engaged with our US counterparts at least on 25 separate occasions”
while negotiating in good faith, but standing firm on crucial matters.
