Malaysia Didn T Surrender Sovereignty In Trade Pact Us Envoy

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US ambassador to Malaysia Edgard D Kagan has dismissed concerns that the newly signed trade deal between the two countries undermined Malaysia's sovereignty.
Further, he said that Malaysia willingly entered into the agreement that aligned it more closely with the US.
“This is not a surrender of sovereignty. It is a recognition that we’re moving into a new phase in the relationship," he was quoted as saying by FMT.
"Malaysia made a sovereign decision to enter the agreement. The deal protects Malaysia’s sovereignty by making clear that Malaysia is choosing a closer relationship with the US," he also said.
Earlier, former trade minister Azmin Ali raised concerns about Article 5.1 of the agreement, which he said undermined Malaysia's neutral stance.
Article 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.
Gunning for China?
The wording of Article 5.1 seems primarily aimed at China, whose economic activities US President Donald Trump claimed have hurt his country.
China is also Malaysia's largest trading partner, with exports accounting for 11 percent of gross domestic product (GDP) in 2024.
Kagan said the provisions raised by critics were normal and that if any move were to impact the interests of one country, it could be raised through proper diplomatic channels.
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. - Mkini

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