Malaysia–US Trade Pact seen as strategic move to bolster industry and market access

MALAYSIA’S business community has welcomed the Malaysia–United States Agreement on Reciprocal Trade (ART) as a sign of the government’s careful negotiation strategy to safeguard national interests while positioning the economy for deeper participation in global supply chains.

The Federation of Malaysian Manufacturers (FMM) said the new framework provides much-needed clarity and stability to investors, while encouraging collaboration between Malaysian and American firms in high-value manufacturing and digital industries.

“The agreement gives Malaysia’s manufacturing sector breathing space, continuity of market access and a stronger foundation for investment,” the FMM said.

“The challenge now is to turn these terms into concrete results. Industry and government must work together to accelerate capacity building, move up the value chain and fully leverage the exemption and implementation package to enhance Malaysia’s competitive position.”

The association noted that the agreement shields Malaysian exporters from potential fallout arising from Washington’s broader strategy to reshore manufacturing and impose higher costs on foreign producers. It said this ensures continued access to the US market under stable and predictable conditions.

Malaysia and the United States signed the ART on Sunday, on the sidelines of the 47th ASEAN Summit and Related Summits in Kuala Lumpur. The deal includes a US commitment to maintain a 19 per cent tariff on Malaysian-origin goods, with exemptions granted for 1,711 tariff lines.

The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) said the agreement could strengthen trade and economic ties between both nations.

Its president, Datuk Ng Yih Pyng, said the exemptions would improve market access and competitiveness for Malaysian products in the US market.

He cautioned, however, that greater liberalisation for US goods and services would bring both opportunities and challenges.

“While preferential market access for US industrial goods like chemicals, machinery parts, electrical and medical equipment, and software would lower production costs for Malaysian businesses, local small and medium enterprises might face stiffer competition due to lower tariffs,” he said.

Ng added that Malaysian consumers would benefit from lower prices of imported goods such as fruit, food and dairy products.

“While we hope the ART will strengthen bilateral and investment relations between Malaysia and the US, it must be structured to ensure a balanced and mutually beneficial outcome, while preserving our trade sovereignty and regulatory autonomy,” he said.

Ng also called for greater clarity on easing stringent US regulatory requirements and ensuring reciprocal commitments in market liberalisation, expressing confidence that the government would continue to review these matters before the agreement comes into effect.

ASEAN and the World Bank

Meanwhile, ASEAN is intensifying cooperation with the World Bank to address the region’s employment challenges amid the rise of artificial intelligence (AI) and the rapid expansion of the gig economy.

Deputy Minister of Investment, Trade and Industry, Liew Chin Tong, said that globally, the world is facing a “jobs crisis” as more people shift towards gig work.

“In countries such as Malaysia and Indonesia, many are involved in gig work, and society now faces a situation where AI is taking over some jobs,” he told Bernama after a bilateral meeting with World Bank Vice-President for East Asia and the Pacific, Dr Carlos Felipe Jaramillo.

Also present were the World Bank’s Regional Director for the Philippines, Malaysia and Brunei, Dr Zafer Mustafaoglu, and Country Manager for Malaysia, Judith Anne Elizabeth Green.

Liew said the World Bank has shown strong interest in employment issues, publishing several recent studies on the topic.

“ASEAN must work closely with the World Bank to leverage its expertise in creating more quality employment opportunities,” he said. “We need to create better jobs, higher wages and a greater sense of social mobility.”

He added that such efforts are essential to ensuring the region remains prosperous before its population begins to age over the next two decades.

The bilateral meeting took place on the sidelines of the 47th ASEAN Summit and Related Summits, hosted by Malaysia from 26 to 28 October at the Kuala Lumpur Convention Centre. - October 28, 2025