“This is not a surrender of sovereignty. It is a recognition that we’re moving into a new phase in the relationship,” Edgard D Kagan told reporters here today.
He said Malaysia made a “sovereign decision” to enter into the agreement.
“The deal protects Malaysia’s sovereignty by making clear that Malaysia is choosing a closer relationship with the US,” he said.
Kagan also described as “normal” some of the provisions that critics took issue with, saying that if it were to impact the interest of one party, both governments would be expected to raise the issue through proper diplomatic channels.
“This is what you do between close partners,” he said.
Earlier today, Perikatan Nasional secretary-general Azmin Ali claimed that the Malaysia-US Reciprocal Trade Agreement undermined the country’s economic sovereignty.
The former international trade and industry minister said the most damaging clauses of the agreement required Malaysia to copy any US trade restrictions or sanctions against other countries.
The wide-ranging reciprocal trade deal, signed on the sidelines of the 47th Asean Summit and Related Summits yesterday, is aimed at strengthening bilateral economic ties, expanding market access, and bolstering supply chain resilience.
Under the agreement, Malaysia has committed to providing significant preferential market access for US industrial goods exports, including chemicals, machinery and electrical equipment, metals, and passenger vehicles, as well as for agricultural exports such as dairy products, poultry and rice.
The US, meanwhile, will maintain a 19% reciprocal tariff on Malaysian goods, with certain products receiving a 0% tariff rate under a list of aligned partners.
Kagan said the agreement marked a shift towards a more balanced trading relationship after years of what he called “lopsided” trade favouring Malaysia.
“US markets have long been far more open to Malaysians than the Malaysian market has been to Americans,” he said, adding that the agreement was designed to make trade “as open to the other as we can make it”.
Despite concerns about transition delays and tariff structures, he said, the deal would ultimately create mutual opportunities and economic benefits for both sides.
Kagan said trade figures showed the agreement’s early success, with Malaysia’s exports to the US increasing significantly this year despite tariff adjustments, while US exports to Malaysia also rose.
He also noted the long-term role of American companies in Malaysia’s economy, saying they “pay twice the average Malaysian wage”, and that their investments had helped build Malaysia’s semiconductor and technology ecosystem.