Malaysian exporters may face scrutiny as the US expands trade investigations under Section 301 of the Trade Act of 1974 covering labour practices and pricing.
PETALING JAYA: Malaysian exporters to the United States (US) must ensure that their supply chains are free from forced labour and comply with global labour standards as Washington expands trade investigations that could affect nearly 60 countries.
Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said the probe, conducted under Section 301 of the Trade Act of 1974, would examine labour practices, export pricing, environmental protections and government subsidies.
He said companies exporting to the US must meet standards set by the International Labour Organisation (ILO) and ensure that forced labour is not used anywhere in their supply chains.
“So this is not only an investigation into Malaysia but also into 60 countries. As a trading nation with the US and with exports worth RM233 billion annually, we must comply.
“Therefore, all our companies exporting to the US must ensure that they comply with these conditions.”
Johari said the investigation would examine several aspects, including the possibility of export price-dumping, compliance with international labour standards, environmental protection and government subsidies.
He said investigators are examining whether countries sell goods to the US at prices far lower than what they charge in their own domestic markets, a practice that could harm American industries.
Malaysia could face trade action if the probe finds that international trade rules have been violated. Under Section 122 of the Trade Act of 1974, the US government can impose a temporary tariff of up to 10% while investigations continue.
Johari said the temporary measure could only remain in place for about five months before Washington decides whether to proceed with further investigations involving nearly 60 countries that run trade surpluses with the US, including Malaysia.
The probe is part of a broader move by the Office of the United States Trade Representative to examine alleged unfair trade practices among several economies, including Malaysia, China, Japan, India, South Korea and European Union members.
It focuses on issues such as “structural excess capacity” in manufacturing sectors where large production output and persistent trade surpluses may distort global markets and burden US commerce.
Reuters reported that the investigations could potentially lead to new tariffs if the US determines that certain countries’ policies or practices unfairly disadvantage American industries.
According to US trade officials, the investigations will also examine whether countries have taken adequate steps to prohibit the importation of goods produced with forced labour and whether failure to address such practices gives foreign producers an unfair cost advantage over American firms.
Johari said Malaysia would provide clarification to the US regarding allegations of overcapacity and the use of forced labour which are among the issues under investigation under Section 301.
He added that the government would continue engaging with US authorities to ensure Malaysian exporters remain compliant with global trade rules while safeguarding the country’s trade interests.
The Sun Malaysia
