Malaysia is proceeding with a trade agreement with the United States. Critics have raised concerns that the deal may impact Malaysia’s control over some of its domestic politics. The agreement is intended to boost American investment in the Southeast Asian country. In addition to signing offers, Malaysia’s exports to the United States will have easier access in the American market.
The agreement was signed during President Trump’s visit to Kuala Lumpur
Malaysia will have a preferred position on its goods to the United States while agreeing to lower its market access barriers to American industrial and agricultural products.
They also predict a net positive impact on Malaysia’s balance of trade with the United States. Supporters call it a strategic win, but the critics have produced a number of trade policy reasons suggesting that it may over-embed Malaysia into the United States’ trade policy regime.
Sanctions were only applied if they would harm Malaysia’s security or economy. He said the deal was fully negotiated to defend Malaysia’s interests while obtaining tariff reductions and investment opportunities.
One controversial aspect is the alignment of Malaysia’s relationship with the US and US trade sanctions with third countries.
Tengku Zafrul stated,
“Malaysia is not required to copy U.S. sanctions unless they affect our own security or economy.”
The government’s response to the Malaysia deal
Accountability has been requested from politicians from all angles, expressing concern that the agreement might undermine Malaysia’s ability to autonomously control its trade.
Prime Minister Anwar Ibrahim rejected claims of surrendering sovereignty. Anwar made this comment regarding the signed documents, which included exit clauses that “protected” Malaysia’s rights.
“We signed this because we need American investments. I will not apologize for that.”
Anwar also says:
“Our decisions must protect the country’s image and serve the national interest-economically, in terms of investment, and most importantly, in bringing benefits to the people.”
He added that Malaysia is still free to engage with other allies such as China.
Malaysia signed a separate deal on economic cooperation with Beijing just after Trump’s visit, which signed Malaysia’s declaration of balanced foreign policy.
Tengku Zafrul Abdul Aziz, the Trade Minister, would also defend the pact by saying that Malaysia does not need to enforce US sanctions unless they impact Malaysia’s security or economy. He would then highlight that the agreement was negotiated for Malaysia to keep its safeguards while getting access to investments and tariff cuts.
Criticism of the deal: What are critics saying?
In response to these assurances, critics and lawmakers on both sides of the aisle have warned of the need for transparency.
Hassan Abdul Karim, MP for Pasir Gudang, referred to the deal as a ‘quiet surrender’ and claims this will end up costing Malaysia billions in revenue. A parliamentary committee will respond by looking into the deal and its potential implications on November 12. Due to increased U.S. tariffs and global risk trade tensions, Malaysia tries to remain competitive and attract foreign investment.
The lack of trust is understandable. There have been calls from all sides of the political spectrum for transparency and for the agreement not to compromise Malaysia’s capacity for independent trade regulation. However, this controversy underscores Malaysia and many countries in Southeast Asia even more: trying to grow economically without having to cede some degree of control to the superpowers of the U.S. and China.
As Anwar stated, their decisions must protect the country’s image and serve the national interest economically in terms of investment, and most importantly, in bringing benefits to people. Whether the benefits outweigh the costs in the eyes of people is still a question. This, in many ways, still holds an unresolved debate.