KUALA LUMPUR — PN secretary-general Datuk Seri Mohamed Azmin Ali has strongly criticised the newly signed Agreement on Reciprocal Trade (ART) between Malaysia and the United States, describing it as a “surrender” of the country’s economic sovereignty.
In a press statement released today, the former International Trade and Industry minister argued that the deal places Malaysia in a position where it is forced to relinquish significant control over its economy while the United States retains the freedom to serve its own interests.
“What is being described as a ‘reciprocal partnership’ is, in truth, the loss of our economic sovereignty and policy space,” Azmin said.
The former minister pointed to Article 5.1 of the agreement, which mandates that Malaysia follow any US trade sanctions or restrictions imposed on other countries.
He stressed that should the US decide to block imports from nations like China or Russia, Malaysia would be obligated to do the same, even if it negatively impacts the country’s economy. “This clause forces Malaysia to take sides in other people’s conflicts and destroys the neutrality that has long been our strength,” Azmin added.
He also highlighted the risks of Malaysia’s position as a neutral player in the region being undermined by the agreement. “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,” Azmin warned.
Furthermore, Azmin criticised provisions of the agreement that limit Malaysia’s ability to regulate its own markets. The deal compels Malaysia to accept US standards in various sectors, including food, medicine, and vehicles, and even undermines Malaysia’s halal certification system by recognising foreign certifiers. Additionally, it prohibits the country from taxing global tech firms or requiring them to store data locally, effectively handing control of the digital economy to foreign interests.
Azmin concluded by stating that while there may be some short-term benefits from the agreement, they are far outweighed by the long-term harm. “Implementing the ART would not make Malaysia stronger; it would mark the surrender of our sovereignty, our neutrality, and our economic future,” he said.
The ART, which was on Sunday, will see 1,711 Malaysian export products to the United States benefit from 0% tariffs.
These products, including palm oil, rubber, cocoa, and selected pharmaceuticals, make up approximately USD5.2 billion, or 12% of Malaysia’s total exports to the US.
The US has also agreed to maintain a 19% tariff on goods originating from Malaysia. Despite some lingering tariffs, the agreement was hailed by Malaysia’s current Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz as a positive development, improving access to the US market for key Malaysian exports.
In addition, the agreement includes provisions for the US to consider Malaysia’s semiconductor exports under Section 232 of the US Trade Expansion Act.
However, critics like Azmin argue that the trade pact comes at a significant cost to Malaysia’s long-standing neutrality and economic autonomy. – October 27, 2025