Malaysia, US reach agreement on reciprocal trade

Malaysia and the U.S. signed the Agreement on Reciprocal Trade on Sunday to consolidate bilateral economic ties.

The agreement was signed by U.S. President Donald Trump and Prime Minister Datuk Seri Anwar Ibrahim on the sidelines of the 47th ASEAN Summit and Related Summits.

Accordingly, the U.S. has pledged to maintain a 19% tariff for Malaysia. As many as 1,711 tariff lines, comprising key export commodities such as palm oil, rubber, cocoa, aircraft parts, and pharmaceuticals, are exempted from the 19% rate.

The exempted items are worth $5.2 billion and account for 12% of the country’s total exports.

Malaysia has committed to providing significant preferential market access for U.S. industrial goods exports, including chemicals, machinery and electrical equipment, metals, and passenger vehicles, and for U.S. agricultural exports including dairy, horticultural products, poultry, processed products, beverages, pork, rice, and fuel ethanol.

Besides, the country has pledged to address non-tariff barriers that affect bilateral trade in priority industrial areas.

The agreement also covers significant commitments related to environment, labour, intellectual property, and security cooperation.

The two sides will complete domestic procedures in the coming weeks before the agreement takes effect.

Malaysia and the U.S. have elevated bilateral relations to a Comprehensive Strategic Partnership. The announcement was made after a bilateral meeting between Malaysian Prime Minister Anwar Ibrahim and U.S. President Donald Trump in Kuala Lumpur during the US leader's official visit to Malaysia to attend the 13th ASEAN-US Summit and the 20th East Asia Summit.