Kuala lumpur: Thousands of jobs in Malaysia are likely to be safeguarded following the signing of the Agreement on Reciprocal Trade (ART) between Malaysia and the United States.
According to BERNAMA News Agency, this agreement was a priority for Malaysia in its negotiations with the US to reduce tariffs that were announced earlier this year on Liberation Day. As an export-oriented nation, Malaysia aims to lower business costs and continue its robust export activities. The ART, signed on October 26, successfully reduced tariffs from a steep 24-25 percent to 19 percent, putting Malaysia on a more competitive footing with neighboring countries that have similar export profiles.
Malaysia’s negotiating team, led by Minister of Investment, Trade and Industry Datuk Seri Tengku Zafrul Abdul Aziz, approached the negotiations with a clear focus on objective analysis. The business sector expressed a need for certainty to effectively plan and strategize their operations, and the ART is seen as providing the much-needed stability.
Malaysia remains one of the US’s largest trading partners, consistently recording trade surpluses, although the surplus has narrowed in recent years. The US is Malaysia’s largest export market, with semiconductors leading the export economy. Bilateral investments are substantial, with the US having invested RM225 billion into Malaysia since the 1980s, making it the largest investor, even surpassing China.
The economies of both nations are deeply interconnected, and the ART represents a continuation of this relationship. Thousands of jobs in Malaysia are likely dependent on trade and investments with the US. Engagement with the US is crucial, especially given that other major economies like the European Union, Japan, and South Korea are also engaging in negotiations with the US.
A clause in the ART specifies that Malaysia should not act against US interests in its dealings with other parties. For instance, if Malaysia engages with countries like Russia or China on nuclear energy deals, the US expects to be given a fair opportunity. However, Malaysia retains the right to deal with any country offering the best terms.
Critics comparing Malaysia’s ART to Cambodia’s agreements overlook the differences in their economic status and international relations. Cambodia, classified as a least developed country, receives preferential treatment from the World Trade Organization. In contrast, Malaysia is recognized as a strategic partner to the US, reflecting its status as a trusted ally.
The ART underscores the necessity for Malaysia to diversify its economy and reduce reliance on traditional markets. Economic sustainability is vital to ensure widespread benefits across society and industries. Although such trade agreements may attract criticism, the long-term objective is to bolster Malaysia’s economic health and benefit its population.