KUALA LUMPUR: Malaysia and the United States have inked a memorandum stating the country’s commitment to expedite the development of critical minerals and rare earth elements in partnership with US companies.
Under the Memorandum of Understanding on Critical Minerals, Malaysia’s commitment includes granting extended operating licences to create certainty for businesses to increase production capacity.
“Malaysia has also committed to ensuring no restrictions are imposed on the sale of rare earth magnets to the US,” the White House said in a statement.
The memorandum was signed by Prime Minister Datuk Seri Anwar Ibrahim and US President Donald Trump on the sidelines of the 47th Asean Summit and Related Summits.
Meanwhile, the United States has stated its commitment to maintaining a 19% tariff rate for Malaysia.
This was among matters included in the historic Reciprocal Trade Agreement inked by Malaysia and the United States, upgrading their relationship to a Comprehensive Strategic Partnership.
“Malaysia has committed to providing significant preferential market access for US industrial goods exports, including chemicals, machinery and electrical equipment, metals and for US agricultural exports,” the White House said.
The new Agreement on Reciprocal Trade inked with the US saw Putrajaya agreeing to exempt US agricultural and seafood products from Malaysia’s sales and service tax (SST).
According to the agreement, this means that US-grown fruits would be exempted from the SST.
Other key terms in the reciprocal trade agreement were Malaysia’s commitment to procuring 30 aircraft plus a purchase option for 30 additional aircraft from the United States, purchase of semiconductors, aerospace components, and data centre equipment with an estimated value of US$150bil (RM633bil).
Malaysia also committed to purchasing up to five million tonnes of liquified natural gas estimated at US$3.4bil (RM14.3bil) a year.
At the same time, the White House said Malaysia committed to the purchase of coal and telecommunication products and services valued at US$204.1mil (RM861.5mil) and to have capital fund investments in the United States of US$70bil (RM295bil).
“The US may positively consider the effect that the Agreement has on national security, including taking the Agreement into consideration when taking trade action under Section 232 of the Trade Expansion Act.
“To support a fair economic relationship between Malaysia and the US, the US Department of the Treasury and Bank Negara are in discussion to finalise their mutual understanding of currency policy,” the White House said.
Other key terms in the agreement is another commitment by Malaysia to address barriers impacting digital trade, services and investment.
“Malaysia has committed to refraining from imposing digital services taxes that discriminate against US companies or requiring US social media platforms and cloud service providers to pay into Malaysia’s domestic fund,” it said.
The White House also said the United States and Malaysia have finalised commitments to address intellectual property protection and enforcement, customs and trade facilitation, and good regulatory practices.
“The US and Malaysia have committed to strengthening economic and national security cooperation, enhancing supply chain resilience and innovation, addressing duty evasion and cooperating on investment security and export controls,” it said.
Trump, who is in Malaysia to attend the 47th Asean Summit and Related Summits, is expected to leave for Tokyo today.
Meanwhile, Wisma Putra said Anwar and Trump, during a bilateral meeting, reflected on the historic nature of this inaugural meeting.
“Recognising the growing strategic and multifaceted cooperation between Malaysia and the US, the Prime Minister and President Trump announced the elevation of the bilateral relations to a Comprehensive Strategic Partnership,” it said.
“The elevation of partnership marks a historic advancement in the relations between the two countries, built upon a foundation of diplomatic engagement forged since 1957 and formalised as a Comprehensive Partnership in 2014,” said the Foreign Ministry.
