



Tommy Thomas
Published: Nov 20, 2025 9:30 AM
Updated: 12:30 PM
COMMENT | The agreement between the United States and Malaysia on “reciprocal trade” signed by the two heads of government in Kuala Lumpur on Oct 26 is undoubtedly the worst agreement that independent Malaya/Malaysia has entered into since Merdeka.
This is whether one considers from the legal perspective or the political, economic, or geo-strategic viewpoint.
Before its heavy lopsidedness in favour of the US is discussed, a brief historical survey of US/Malaysia relations is warranted.
There have been 14 US administrations headed by 13 presidents between 1957 and 2025. Presidents Dwight Eisenhower and John Kennedy pressed our first prime minister, Tunku Abdul Rahman, to join the US-led alliance, Seato, to assist the US in its Cold War activities in South East Asia.
Tunku declined. Despite president Lyndon Johnson visiting Kuala Lumpur in 1965, Tunku refused to support the US in the Vietnam War.
Until the Anwar Ibrahim administration took office in 2022, every prime minister kept the US at arm’s length. Malaysia has always been friendly with the three superpowers: the US, Russia, and China, without showing partiality to any.

Prime Minister Anwar Ibrahim welcomes Trump
So why did Anwar make a fundamental shift in our foreign policy, which has worked well for us for 68 years? Why the tilt to the US? The superficial explanation is that, unlike any of his post-World War II predecessors, Donald Trump is a bully and the global “wrecking ball”.
Anwar was in awe of Trump. Anwar did not deal with Trump as an equal head of government during their negotiations. Malaysia’s bargaining power was further diminished because Anwar desperately wanted to host Trump in Kuala Lumpur on the pretext of an Asean Summit.
Trump deigned a flying stop, but completely on his terms. Principally, a trade agreement with Malaysia, and for Trump to claim credit for brokering a truce between Thailand and Cambodia arising from their recent border skirmish.
Perhaps there may be a profound explanation for Anwar’s conduct: time will tell.
Even the title given to the agreement is Orwellian. There is nothing “Reciprocal” about it: simply stated, the US demands, Malaysia caves in. Nearly all the obligations are imposed on Malaysia: all the rights devolve to the US.
It appears as if the Malaysian negotiating team - presumably from the Prime Minister’s Office (PMO), Wisma Putra, the Investment, Trade, and Industry Ministry (Miti), and the Attorney-General’s Chambers (AGC) - did not negotiate at all.

The spirited Rafidah Aziz, perhaps our most effective Miti minister, would never have agreed to this agreement. The US handed them their draft. And it was signed lamely by Anwar, who had Trump’s pen to show for, and a ride in Trump’s car.
The agreement
Even the online edition of the agreement manifests US domination. It is on the White House masthead. Doesn’t Wisma Putra publish it? A review of the entire agreement discloses the frequent use of the following 19 expressions:
“Malaysia shall apply…”;
“Malaysia shall not…”;
“Malaysia shall not apply…”;
“Malaysia shall allow…”;
“Malaysia shall accord…”;
“Malaysia shall facilitate…”;
“Malaysia shall ensure…”;
“Malaysia shall provide…”;
“Malaysia shall only protect or recognize…”;
“Malaysia shall not restrict…”;
“Malaysia shall prioritize…”;
“Malaysia shall adopt and implement…”;
“Malaysia shall coordinate…”;
“Malaysia shall not impose…”;
“Malaysia shall cooperate…”;
“Malaysia shall explore…”;
“Malaysia shall enter into…”;
“Malaysia shall refrain from providing…”; and
“Malaysia intends to purchase…”.
There are hardly any similar obligations on the US; hence, the terms “reciprocal” and “complementary” are wholly inappropriate. It is doublespeak.
Any impartial reviewer of this agreement, when reminded of these obligations imposed upon Malaysia without any mutual obligations on the US, will conclude that it is a gross example of a one-sided bargain.
When one is then referred to five specific articles, any doubt is removed that the agreement as a whole is against our interests, and is wholly detrimental to our status as an independent, sovereign nation.
What does “sovereignty” mean? Like many words describing concepts, it is multifaceted. I suggest that part of a nation’s sovereignty is its ability and freedom to decide and determine its own policies, whether foreign, military, economic, political, or otherwise, and to pass laws.
When that freedom is impinged upon by its agreeing to act or not to act in a particular way in the future, its sovereignty is compromised.
Applying that yardstick, this agreement undoubtedly diminishes our freedom to operate, and thus it compromises our sovereignty. Simply stated, our hands have become unnecessarily tied. And now to the five articles.

Signing of the US-M’sia trade deal
Five obnoxious articles
1. Article 2.3 Agriculture
“Malaysia shall provide non-discriminating or preferential market access for US agricultural goods as set forth in this Agreement. In doing so –
(b) Malaysia shall not enter into agreements or understanding with third countries that… or otherwise disadvantage US exports.”
(My emphasis)
First, the US does not have to provide “non-discriminatory or preferential market access” for Malaysian agricultural goods. Secondly, Malaysia is prohibited from entering into similar agreements or understanding with the 200-odd countries in the world, excluding the US.
Of course, the US is not prohibited in like manner. The critical test is that Malaysia must refrain from taking such action if it “disadvantages US exports”. And of course, the US determines that. How is this article in Malaysia’s interests?
2. Article 2.12 Border Measures and Taxes
“2. No party shall contest at the WTO a measure adopted by the other party to rebate or to refrain from imposing direct taxes in relation to exports from that party”.
(My emphasis)
The US, Malaysia, and more than 190 countries subscribe to the WTO international regime, which includes an agreed dispute resolution mechanism to resolve disputes between member states.
Why has Malaysia given up this right if the US adopts measures “to rebate or to refrain from imposing direct taxes in relation to exports” from Malaysia?
3. Article 3.3 Digital Trade Agreements
“Malaysia shall consult with the US before entering into a new digital trade agreement with another country that jeopardises essential US interest”.
(my emphasis)
“Digital trade” is not defined in the agreement, and will be given a wide and general meaning in the rapidly evolving scientific and technological world. Why should Malaysia consult the US before it can enter into digital trade agreements with the 200 countries across the globe?
The key words are “jeopardises essential US interest”. Obviously, the US will determine the scope and extent of its interests: the US will dictate what they are, and Malaysia will have to comply. Does this not result in a serious inroad into our freedom to operate independently?
4. Article 5.3 Other Measures
“3. If Malaysia enters into a new bilateral free trade agreement or preferential economic agreement with a country that jeopardises essential US interests, the US may, if consultations with Malaysia fail to resolve its concerns, terminate this Agreement and reimpose the applicable tariff rate set forth in Executive Order 14257 of April 2, 2025.”
(my emphasis)
This targets Malaysia’s liberty to enter into “bilateral free trade agreements” and “preferential economic agreements” with the rest of the world. Does this not severely prejudice our freedom to negotiate with, and enter into trade and economic agreements with any country we wish?
If we do so, the US can take retaliatory measures - terminating this agreement and restoring the original Trump tariff specified in his executive order of April 2. We become subject to blackmail and threats by the US.
(v) “4. Malaysia shall not purchase any nuclear reactors, fuel rods or enriched uranium from certain countries, except where there are no alternative suppliers on comparable terms and conditions.”
(my emphasis)
In recent years, there has been public discussion about whether Malaysia should build nuclear plants to provide another alternative energy source; that is, to diversify our sources of energy and to comply with climate change obligations.
If, as a nation, we decide to go on that route, our freedom is again impinged because we cannot purchase any “nuclear reactors, fuel rods or enriched uranium” from any country except the US unless “there are no alternative suppliers” to or “comparable terms and conditions” with US manufacturers.
And of course, the US will decide how suppliers “alternate” to the US will offer terms and conditions “comparable” to those offered by the US. Again, there is no parity between the two countries: Malaysia will succumb to US wishes.
The annexes
Malaysia’s obligations multiply in the four annexes to the agreement. Annex I deals with tariff and customs matters. Annex II is the “market access list” relating to the import into Malaysia of American cheese and meat.
Annex III refers to specific commitments; it is lengthy, running to 42 separate matters on diverse subjects. Let me cite a few examples.
By Article 1.2 in Annex III, Malaysia agrees to exclude US imports of agricultural and seafood products from our sales and service tax (SST). This is highly discriminatory in favour of the US. Under Article 2.9, Malaysia shall allow any US halal certifier designated by Jakim as meeting our halal requirement, without additional requirements.

By Article 2.17, Malaysia shall fully implement eight international agreements and ratify or accede to five other international conventions.
Finally, by Article 6.2, Malaysia commits to the expedient development of its rare earth and critical minerals sector in partnership with US companies, and we agree to supply rare earth magnets to the US. In sum, all these specific commitments are made by Malaysia; hardly any by the US.
Annex IV deals with purchases and investments. Again, hopelessly lop-sided. The small developing nation that is Malaysia is obliged to purchase from and invest in the richest nation in world history, with the largest economy ever. And the US has no reciprocal duties.
Thus, we have to purchase 60 aircraft and LNG valued at approximately US$2 billion (RM8.3 billion) per annum for five years from 2025 to 2029. Our multi-national companies must purchase US$150 billion (RM623 billion) worth of semiconductors, aerospace components, and data centre equipment from US companies.
TNB has to purchase coal valued at US$42 million (RM174 million) per year, and Telekom Malaysia has to purchase US products and services worth US$119 million (RM494 million). Finally, we must make a capital investment of US$70 billion (RM291 billion) over the next 10 years (US$7 billion annually). Taken together, if this is not a “sell-out”, one does not know what is?
Although the British made their appearance in Penang in 1776 and Singapore in 1819, their intervention into the Malay States only occurred in 1874 with the Treaty of Pangkor. Malaya was thus under direct British rule for some 80 years.
Never under the British Empire did the colonial and imperialist power exercise such a degree of direct control and influence over Malaya’s economy. Hence, we will be much worse off after 68 years of Merdeka.
The US trade treaty is far more sinister and insidious: it is neo-imperialism at its worst. And to think that Malaysians freely and voluntarily agreed to this.
From a geo-strategic perspective, Malaysia has moved very much into the US sphere of influence, a development that would be detrimental to our independence.
The US immediately flexed its muscles when its ambassador, Edgard Kagan, warned early this month that Trump “has been very clear about what some red lines are and the political consequences that would come from crossing those”. What audacity; a temerity never manifested by the US previously.

Edgard Kagan
Moving forward
Against this background, it is impossible to contend that this agreement is in our interests. The government must immediately take action to ensure that we are not bound by it. We must abandon this agreement as soon as possible.
Fortunately, there are two escape clauses within its terms which assist Malaysia, viz, Articles 7.2 and 7.5.
Articles 7.2 : Entry into Force
“This Agreement shall enter into force 60 days after the date on which Parties have exchanged written notifications certifying completion of their applicable legal procedures or on such other date as the Parties may agree”.
This is usual in agreements between nations, which are invariably signed by the executive branch, but require approval by their legislative branch, or their domestic laws have to be amended to harmonise with the requirements of any agreement.
Hence, there is a time-lag between the signature (which was Oct 26) and its coming into force.
Fortunately, both Malaysia and the US must agree under this article - it is mutual, and not one-sided, before it comes into force.
Under the express terms of Article 7.2, Malaysia must “exchange written notifications” or agree on when the agreement comes into force. By declining to take either positive measure on the part of Malaysia, this agreement cannot come into force, in which event it lapses and will never be binding.
If this agreement has already come into force (which would be very surprising since it was only executed three weeks ago), then we can resort to Article 7.5, which reads:
Article 7.5 : Termination
“Either Party may terminate this Agreement by written notification to the other Party. Termination shall take effect 180 days after the date of the notification.”
Obviously, this article only becomes applicable if the agreement comes into force. In that contingency, Malaysia can terminate by simply issuing a termination notice in writing. No reason or explanation for termination is required to be included in the notice.
If Anwar wants to save face with his hero, Trump, the prime minister can allow a free vote, that is, without the whip being enforced, of the 222 members of the Dewan Rakyat who will have to decide based on their conscience and feedback from their constituents. Of course, indirectly, the voters at the next general election are thus brought into the discussion.
A defeat in Parliament would give sufficient political reason for Anwar to maintain his deep friendship with Trump, despite the agreement not coming into force. After all, the US Congress often vetoes treaties entered into by the US government: the League of Nations in the 1920s is a famous example.
Whatever it is, Malaysia should renounce this agreement as soon as possible. It is disastrous and an insult to our dignity as a sovereign, independent nation.
TOMMY THOMAS is a former attorney-general.