KUALA LUMPUR, Oct 29 — Minister of Investment, Trade and Industry Datuk Seri Tengku Zafrul Abdul Aziz today delivered a fiery defence of Malaysia’s new trade agreement with the United States, rejecting claims that Putrajaya was “selling out” and insisting the deal was the “best case scenario” negotiated under difficult circumstances.

Speaking in the Parliament building, Tengku Zafrul accused detractors of ignorance regarding the intense, behind-the-scenes negotiations. 

Earlier, critics including Opposition lawmakers claimed that the agreement would make Malaysia subservient to American interests.

“We had no choice but to negotiate,” he said. 

“So, whether we like it or not, we need to defend our access to the US markets, even when under pressure.”

Outlining the stakes, he explained that Malaysia was initially hit with a 24 per cent tariff, which was later increased to 25 per cent, despite bilateral trade amounting to RM325 billion in 2024. 

Through six months of negotiations, Malaysia successfully secured a reduced tariff of 19 per cent, the lowest among Asean nations, and exemptions for over 1,700 product categories.

Crucially, the new exemptions include major exports to the US such as pharmaceuticals, cocoa, and aircraft components, worth approximately RM22 billion. This was on top of the previous exemption secured for semiconductors.

“This agreement ensures continuous access for Malaysian goods to the US market,” Tengku Zafrul warned. 

“Without it, we could have faced tariffs as high as 40 or even 100 per cent. If that happens, it’s not the government that suffers; it’s Malaysian workers and exporters who lose jobs and income.”

Addressing specific criticisms head-on, Tengku Zafrul sought to correct what he called public misconceptions about Article 5.1 of the agreement, which critics claimed would force Malaysia to follow US trade actions against third countries. 

He clarified that the clause compels Malaysian action only in matters of shared economic and security interests, which he said acted as a protective “guardrail” rather than a “blank cheque” for US demands.

“Article 5.1 gives Malaysia space to avoid acting against other countries; we only need to negotiate with the US.

“This is not a licensc for America to demand Malaysia to act the same,” he said when explaining the protective nature of the clause.

On concerns that Malaysia’s halal integrity could be compromised, he was unequivocal. 

“The halal standards of Malaysia are determined by Malaysia, verified by Jakim, and maintained by Muslims in this country. Full stop,” he said, clarifying that certification authority remains fully with the Department of Islamic Development.

He also clarified that Petronas’ decision to import liquefied natural gas (LNG) from the US was a commercial one aimed at ensuring “long-term energy security,” not a political concession tied to the deal. 

“This is not a political order from Washington; it is a commercial decision by Petronas to ensure stable supply,” he said.

“The country must have various energy sources and options, that is called energy security not dependency.”

Regarding rare earth elements (REE), Tengku Zafrul firmly rejected claims that Malaysia was opening its doors to exporting unprocessed minerals. 

He said that the nation’s ban on raw REE exports remains intact and that any development, including tripartite partnerships with countries like Australia, must involve local processing to create high-skilled jobs and build industrial capacity in Malaysia.

Tengku Zafrul maintained that the agreement could not be compared to a standard Free Trade Agreement (FTA), as it was a response to an “unprecedented, unilateral tariff situation imposed without consultation.” 

The minister also commended the civil servants and the negotiation team for their work under extraordinary circumstances.

Looking forward, he said that the government is actively diversifying trade ties with partners like South Korea, the UAE, and through the Asia-Pacific Trade Agreement (APTA). 

He reiterated that Malaysia is a sovereign nation that is not bound to any other country.

“Malaysia is not a country that obeys any power,” he said. “We are a respected nation capable of standing on our own, defending our sovereignty, and protecting the interests of our people.”

 Malay Mail – Malaysia