Sabah Sarawak Left Out Again As Us Trade Deal Favours Peninsula Leaders

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Sabah leaders have poured cold water on Malaysia’s new trade pact with the US, warning that it delivers no real benefit to East Malaysia, while enriching industries in the peninsula.
ADSFormer chief minister Yong Teck Lee and Warisan information chief Azis Jamman said the agreement, which covers tariff exemptions and large-scale imports of US gas, coal, and technology products, once again exposes how federal policies overlook Sabah and Sarawak’s economic role.
Under the deal, Malaysia will import up to five million tonnes of liquefied natural gas (LNG) from the US each year, worth more than US$3 billion (RM12.5 billion), alongside US$204 million in purchases of aircraft, energy and telecommunications products, including coal.
Yong (above) pointed out that the new pact would make little difference to Sabah’s economy because the state’s key exports, such as wood products, copper foil, oil and gas, seafood, and palm oil, are already tariff-free under existing arrangements.
“Sabah’s direct trade with the US is only one percent of its total trade, roughly RM1 billion out of RM100 billion. Malaysia’s total exports to the US amount to RM183 billion,” he said in a statement.
The Sabah Progressive Party (SAPP) chief added that most of the gains from the new zero-tariff list would go to pharmaceutical, aerospace and high-tech manufacturers in Peninsular Malaysia, not to small exporters or resource-based industries in Borneo.
“It is no surprise that Sabah businesses do not share the national euphoria over the so-called zero tariff on 1,711 Malaysian products.
“The deal benefits big manufacturers in Peninsular Malaysia more than any sector in Sabah or Sarawak,” Yong lamented.
Why buy abroad if East M’sia has it?
In a separate statement, Azis criticised the government’s decision to purchase gas and coal from the US, noting that Sabah and Sarawak already operate world-class LNG facilities in Kimanis and Bintulu.
Warisan info chief Azis Jamman“Instead of strengthening the capacity of these states, Putrajaya has chosen to buy gas from the US. This defies logic and undermines the contribution of Sabah and Sarawak, whose resources have sustained the nation for decades,” he said.
The former deputy home minister said the move would create jobs abroad, not at home, and warned that East Malaysia would again be left out of major contracts and downstream opportunities.
“The money spent will benefit American industries, while Sabahans and Sarawakians lose out on employment, contracts and investments that could have been generated locally,” he added.
ADSAzis also questioned Malaysia’s commitment to regional solidarity, saying the country could have strengthened Asean cooperation by sourcing coal from Indonesia, a closer and cheaper option.
READ MORE: KINIGUIDE | What High Court's 40pct revenue ruling means for Sabah
Government-linked companies (GLCs) commitments to purchase US goods, including Boeing planes, LNG, coal, and data centre equipment - in addition to investments Malaysia promised to make in the US - were outlined in the annexes to the trade agreement Prime Minister Anwar Ibrahim and US President Donald Trump signed on Sunday.
In Parliament today, Investment, Trade, and Industry Minister Tengku Zafrul Abdul Aziz reiterated that the companies had announced some of the purchases even prior to Trump's tariff announcement, such as Malaysia Aviation Group’s purchase of Boeing aircraft, which was announced in March.
On criticisms of Petronas' LNG purchases from the US, he cited existing long-standing supply strategies.
Zafrul further stressed that a sovereign nation must have diverse energy sources and options to ensure energy security and not dependency.
Decisions made without Borneo states
Yong and Azis said the agreement reflects a deeper pattern of centralised decision-making that sidelines Sabah and Sarawak from national economic planning.
Azis accused the federal government of using the natural wealth of the two states as bargaining chips in international negotiations while excluding them from the discussions.
“If the government can afford billion-ringgit purchases from foreign powers, it can certainly afford to fulfil its legal and moral duty to Sabah and Sarawak,” he said.
Yong said the government’s upbeat tone over the trade pact should mean it is now in a position to pay Sabah its 40 percent revenue entitlement.
“With such economic gains, the federal government should immediately fulfil its constitutional duty to pay the 40 percent entitlement and not appeal the High Court ruling on the matter,” he added.
On Oct 17, the Kota Kinabalu High Court found that the federal government had acted unlawfully and beyond its powers under the Federal Constitution by failing to honour Sabah’s 40 percent share of federal revenue for nearly five decades.
The court directed Putrajaya to conduct a new revenue review with the Sabah government under Article 112D of the Constitution and agree on the state’s 40 percent entitlement for each financial year from 1974 to 2021.
Yong and Aziz both stressed that the federal government should honour the Malaysia Agreement 1963 (MA63) and settle Sabah’s constitutional revenue share before pursuing new international commitments.
“Until Putrajaya fulfils its obligations to Sabah and Sarawak, no trade deal can be called progress,” Azis added. - Mkini

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