Malaysia Faces Scrutiny Over New Trade Deal with the US
A recently signed trade agreement between Malaysia and the United States, finalized during Donald trump’s visit to Kuala lumpur last week, is sparking debate and raising concerns about potential compromises to Malaysia’s sovereignty. While the government touts the deal as a catalyst for increased investment and expanded trade, critics argue it heavily favors the US and could force malaysia to align its economic policies with Washington’s.
The agreement,which sees Malaysia removing or cutting tariffs on some US goods,maintains US tariffs on Malaysian products at 19%,with exceptions for items receiving a zero percent reciprocal tariff rate. Though, a key point of contention lies in a clause requiring Malaysia to align itself with US economic restrictions or sanctions against third countries.
Opposition politician Azmin Ali, a former international trade and industry minister, warned this could compel Malaysia to mirror US import blocks on countries like China or Russia, even if detrimental to its own economy. He stated the clause would force Malaysia to “take sides in other people’s conflicts and destroy ‘the neutrality that has long been our strength.'”
The concerns extend beyond the opposition. Politicians across the political spectrum,including members of Prime Minister Anwar Ibrahim’s ruling coalition,analysts,and civil society groups have voiced similar anxieties. Elina Noor, Senior Fellow at the Carnegie Endowment for International Peace, agreed with political rival Mahathir Mohamad that the agreement is “extremely one-sided,” though she doesn’t believe it violates constitutional provisions. Noor cautioned that Malaysia will need to “work extra hard to ensure it isn’t ensnared in other countries’ restrictions” and remain “diligent about not sleepwalking into long-term, strategic alignment against its own interests.”
Further criticism comes from the Center to Combat Corruption and Cronyism (C4 Center), which expressed concerns the agreement could bypass procurement laws and limit oversight of investments. “It gives away our right to decide on things,” said Pushpan Murugiah, C4 Center’s chief executive officer. “There are certain clauses that mandate that if we take actions that will affect US interest, we have to essentially ask permission first.”
In response to the growing criticism, the investment, trade and industry ministry launched a microsite and released a 15-page Frequently Asked Questions document. The government’s chief legal adviser also asserted that Malaysia retains the right to unilaterally terminate the agreement at any time.
A special parliamentary committee is scheduled to review the bilateral agreement next week, signaling a continued and thorough examination of its implications for Malaysia’s economic independence and foreign policy.
