Malaysia secures strategic trade wins with US ART, advances Asean economic agenda - Miti

KUALA LUMPUR - Malaysia has reinforced its economic sovereignty and protected its key export markets through the Malaysia-United States (US) Agreement on Reciprocal Trade (ART), while also achieving notable milestones as the 2025 Asean chair.

These accomplishments were highlighted in the Investment, Trade and Industry Ministry's (Miti) Third Quarter 2025 Performance Report, which was tabled on Nov 13.

The report emphasised Malaysia’s strategic trade and regional economic progress, showcasing the country’s proactive efforts to safeguard its trade interests and advance economic integration within Asean.

Safeguarding Malaysia’s No 1 export market

The signing of ART was described as a strategic move that protects Malaysia’s trade with the US, valued at RM325 billion, including RM200 billion in exports and safeguards 1.1 million jobs and approximately 7,000 small and medium enterprises (SME) in critical sectors such as electrical and electronics (E&E), aerospace, pharmaceuticals, palm oil, rubber and cocoa.

"On balance, the agreement achieved the best deal without giving up everything, protecting Malaysia from potential tariff hikes of 24 to 50 per cent while securing a 19 per cent reciprocal tariff exemption for 1,711 tariff lines worth RM22 billion," the report stated.

The agreement also ensured that Malaysia retained full control over its laws and policies, with no forced sanctions, consultations required before action and decisions based on national interests.

Article 5.1 of ART protects Malaysia’s sovereignty, promotes diplomatic engagement and maintains a neutral foreign policy.

Miti warned that without ART, Malaysian exports could face steep tariffs, including RM56.2 billion in semiconductor exports under investigation for Section 232, potentially disrupting the industrial ecosystem and affecting gross domestic product (GDP), household incomes and investments.

ART also promises long-term market access, expansion of the US supply chain footprint, increased investor confidence, technology collaboration and opportunities for SMEs, upskilling and job creation in advanced manufacturing sectors.

Asean chairmanship and economic milestones

As 2025 Asean chair, Malaysia has completed 12 of 18 Priority Economic Deliverables (PEDs) under the Economic Pillar, with remaining deliverables on track for completion by year-end.

Key accomplishments include advancing the Asean Digital Economy Framework Agreement (Defa), establishing the Asean MSME Green Transition Centre and Inclusive Business Forum and upgrading the Asean Trade in Goods Agreement (ATIGA 3.0) and the Asean–China Free Trade Area (ACFTA) to strengthen trade facilitation and supply-chain integration.

The report also highlighted the signing of the Malaysia–Korea FTA (MKFTA) and ART, as well as the accession of Timor-Leste as Asean’s 11th member, reinforcing inclusivity and regional unity.

Other Asean Economic Community milestones include 76.5 per cent completion of the Asean Economic Community (AEC) Strategic Plan 2026–2030, with 2,960 out of 3,867 activities completed, adoption of key outcome indicators and compliance monitoring of 66 Asean Economic Agreements.

Malaysia also convened the fifth Summit of the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Asean Trade and Investment Dialogue (Tid), further cementing its role in regional economic integration.

Miti highlighted that these developments strengthen Malaysia’s global reputation, foster predictable trade conditions, attract foreign direct investment and drive technological and industrial advancements, solidifying the country’s status as a resilient, innovative and dependable trading partner.

The Third Quarter 2025 Performance Report was presented by Miti Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz at Menara Miti on Nov 13.