Ideas Malaysia Us Trade Pact A Blemish On Asean Chairpersonship

---

 


A think tank has likened the Malaysia-US reciprocal trade agreement, which has garnered much backlash from certain quarters, to a blemish on Malaysia’s Asean chairpersonship this year.
As anxieties surrounding the deal continue to mount, the Institute for Democracy and Economic Affairs (Ideas) warned that Malaysia’s pursuit of the deal prioritised national interests over Asean solidarity.
In a statement today, Ideas said that while Malaysia was not alone in pursuing a bilateral deal with Washington, doing so prioritised individual over collective interest and diverted diplomatic resources away from securing deeper partnerships with countries that are more closely aligned with Malaysia’s economic development interests.
“Malaysia’s otherwise strong leadership of Asean this year was dented by a deal that undermines Asean centrality and hurts regional partners that lack the platform and resources to secure their own deals, or have chosen to walk away from similarly lopsided agreements,” it added.
ADSIt also cautioned that the deal marks a “worrying departure” from Malaysia’s trade and foreign policy principles of Asean centrality and non-alignment, as it explicitly ties Malaysia’s trade and investment policies to US strategic interests.
The deal was signed by Prime Minister Anwar Ibrahim and US President Donald Trump on Oct 26 during the 47th Asean Summit in Kuala Lumpur, with the agreement maintaining Malaysia’s reciprocal tariff rate at 19 percent.
A broad list of goods exempted from reciprocal tariffs under Trump’s executive order in April will also remain in place, including semiconductors and other electronic components that are major Malaysian exports to the US.
Pro-US commitments
Various quarters have criticised Article 5.1 of the agreement, which commits Malaysia to take “complementary actions” when the US restricts a third country - widely read as a reference to China, whose economic activities had previously been targeted by Trump.
The clause 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.
Echoing previous criticisms, Ideas said the deal’s outcomes and process could undermine Malaysia’s regional partnerships and non-aligned foreign policy while offering limited gains.
It added that while the agreement is framed as a “partnership of equals”, in reality, it compels only Malaysia to make substantive policy commitments while allowing Washington full flexibility in its trade policy.
Noting that the deal lacks dispute settlement provisions and includes sweeping clauses allowing future trade remedies, Ideas described the agreement as part of the Trump administration’s “power politics” approach that undermines international trade governance.
The “unusually fast and opaque” negotiation process, it said, also sets an unwelcome precedent that raises questions on whether the short- and long-term impacts were properly assessed.
“Ultimately, the agreement has not been subject to public accountability processes, undermines Malaysia’s regional and global economic interests, and ties Malaysia’s economic policies to the US’ strategic interests while validating a 19 percent tariff on most Malaysian exports,” Ideas deputy director of research Stewart Nixon was quoted as saying.
ADSHandicapping M’sian trade policy
While the agreement may have gained Malaysia temporary political goodwill with Washington, Ideas said it constrains the country’s ability to pursue wider trade partnerships and diverts diplomatic resources from strengthening ties with nations aligned with its development interests.
“While the agreement provides no certainty surrounding future tariff policies, policymakers are counting on this goodwill to translate into preferential treatment under future punitive tariffs, particularly on semiconductors.
“Conversely, the agreement… ties future trade and investment policies to America’s strategic interests and guarantees equivalent trade policy treatment for the US in future industries such as digital services,” it said.
It pointed to another major concern in Malaysia’s requirement to recognise US regulatory approvals - including from the Food and Drug Administration and Department of Agriculture - for pharmaceuticals, medical devices, and food safety, including halal certification.
Such deep alignment with US systems, Ideas highlighted, comes at a time when American administrative and legal institutions are under strain, raising doubts over their reliability in safeguarding Malaysian health, safety, and religious standards.
In a separate statement, Perikatan Nasional chairperson Muhyiddin Yassin said that while Trump’s administration has described the agreement as an achievement of “mutually beneficial bilateral diplomacy”, such a conclusion is highly inaccurate, misleading, and far from the truth.
“In reality, this agreement contains various hidden traps and time bombs that could harm Malaysia in the future.
“It is laden with economic colonisation agendas that threaten Malaysia’s independence and sovereignty,” the Bersatu president said. 
In listing several provisions of the agreement which he took issue with, Muhyiddin asserted that the deal is likely to transform Malaysia into a “proxy or satellite state” of the US in Southeast Asia.
“I deeply regret the harmful implications arising from this agreement. These concerns are now being widely and comprehensively analysed by local, regional, and international experts. 
“This indicates that the consequences (of the agreement) are extremely dangerous to Malaysia’s survival as an independent and sovereign nation,” he said.
As such, he urged the government to undertake a comprehensive review of this agreement, stressing that it must be carried out at multiple levels and involve all stakeholders to safeguard the nation’s independence and sovereignty. - Mkini

---