Azmin Trade Deal May Force Malaysia To Side With Us Against China

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Former trade minister Azmin Ali has warned that the new Malaysia-US trade deal threatens the country’s ties with China, its largest trading partner, where exports accounted for 11 percent of gross domestic product (GDP) in 2024.
While the deal helped secure Malaysian trade with the US and avoid heftier reciprocal tariffs, Azmin highlighted that one clause would force Putrajaya to align with Washington against the latter’s economic enemies.
“One of the most damaging clauses is Article 5.1, which requires Malaysia to copy any US trade restrictions or sanctions against other countries.
“If Washington decides to block imports from China or Russia, Malaysia must do the same, even if it harms our economy. This clause forces Malaysia to take sides in other people’s conflicts and destroys the neutrality that has long been our strength.
“By aligning Malaysia’s policies with US decisions, the agreement risks driving away investors who value Malaysia’s role as a neutral and stable partner in this part of the world,” the Perikatan Nasional secretary-general said in a statement today.
US President Donald Trump and Prime Minister Anwar IbrahimArticle 5.1 states that if the US imposes any tariffs, quotas, prohibitions, or other trade measures against another country to protect the US’ economic and national security, Malaysia must take similar actions or agree on a timeline to do so.
Putrajaya is also expected to crack down on companies owned or controlled by other countries operating in Malaysia that export below-market price goods to the US, or whose actions harm US exports.
US now M’sia’s biggest export market
The wording of Article 5.1 seems primarily aimed at China, whose economic activities US President Donald Trump claimed have hurt his country.
In 2024, total trade between Malaysia and China amounted to RM484 billion, of which Malaysian exports accounted for RM187.67 billion.
The forced trade compliance under the deal with the US is one of many commitments Malaysia has to undertake, which also includes unrestricted exports of rare earth to the US.
In return, reciprocal tariffs from the US were locked in at 19 percent, while a slew of exports, including semiconductors, remained exempted.
The US became Malaysia’s largest export market in 2024, with a total value of RM198.65 billion that year. Of this amount, RM60.6 billion was from semiconductor exports.
Investment, Trade and Industry Minister Tengku Zafrul Abdul Aziz said yesterday the government is satisfied with the deal and was glad that they did not have to backtrack on previous agreements while getting more than previously discussed.
‘We gave away too much’
Azmin, however, viewed the deal as a surrender that gave away too much of Malaysia’s control over its economy.
“The (agreement) also strips Malaysia of its ability to regulate its own markets.
“It forces our agencies to accept American standards for food, medicine, and vehicles, and it even weakens our halal certification system by recognising foreign certifiers,” he said.
Azmin warned that any short-term benefits would be outweighed by the long-term damage.
The full agreement and its annexes and appendix is attached below.
- Mkini

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