Kuala lumpur: Malaysia has sent a delegation to China to provide information and clarification regarding the Agreement on Reciprocal Trade (ART) between Malaysia and the United States, stated Minister of Investment, Trade, and Industry Tengku Datuk Seri Zafrul Abdul Aziz today. The move comes in response to China’s concerns over the geopolitical implications of the ART, considering the strategic trading partnership between Malaysia and China.
According to BERNAMA News Agency, the Malaysian delegation met with China’s Ministry of Commerce last week. The discussions aimed to address any potential burden the ART might impose on the trade relationship between the two nations. Tengku Zafrul emphasized that China sought to record their concerns due to the geopolitical issues involved. He highlighted that the discussions also paved the way for China’s efforts to enhance trade cooperation through a new memorandum of understanding (MoU), despite existing frameworks like the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN-China free trade agreement.
Tengku Zafrul further explained Malaysia’s decision to sign the ART earlier than other ASEAN countries, citing the country’s export structure’s vulnerability to US tariffs. He shared that discussions with the US Trade Representative (USTR) indicated Malaysia would receive favorable treatment, particularly in the electronics and semiconductor sectors, due to their strategic partnership in these areas.
He added that Malaysia negotiated the ART under challenging circumstances, facing a looming 25 percent tariff on nearly all US exports. Without the ART, Malaysia’s GDP growth risked a decline of approximately 1.2 percentage points, amounting to nearly RM30 billion annually. Tengku Zafrul remarked that he prioritized saving factories and jobs over being criticized for swiftly negotiating the agreement.
Tengku Zafrul also addressed concerns that the ART might affect bumiputera rights, asserting that Article 7.1 of the ART respects Malaysia’s rights and obligations under the World Trade Organization (WTO). This includes measures to protect national security and manage trade effectively. Moreover, he noted that Article 7.5 allows for the agreement’s termination with written notice after 180 days.