KUALA LUMPUR: MPs have urged the formation of a Royal Commission of Inquiry to investigate the United States–Malaysia Reciprocal Trade Agreement.
They called for the RCI to examine claims that Malaysia was forced into negotiations and investigate why an agreement was signed instead of an MoU or framework.
They said it should recommend stronger governance and consultation mechanisms for future trade deals.
They noted the pact, signed on Oct 30, 2025 in Kuala Lumpur, significantly favoured the United States.
In a joint statement, Wong Chen (PH–Subang), Nik Nazmi Nik Ahmad (PH–Setiawangsa) and Rafizi Ramli (PH–Pandan) cited Liew Chin Tong’s statement on Nov 3.
They said the Deputy Minister of Investment, Trade and Industry stated Malaysia had been compelled into negotiations, not entering on equal terms.
They pointed out that Articles 5.1, 5.2 and 5.3 could constrain Malaysia’s sovereign rights if exercised by the United States.
They said this could force alignment with US national security and economic interests, departing from Malaysia’s active neutrality and Asean centrality.
“We agree with Prime Minister Anwar Ibrahim, who on October 30, 2025 said in Parliament that Malaysia has an exit clause,” they said.
They said Malaysia can terminate the Agreement as a way out of the sovereignty question.
“Similarly, the Attorney General’s Chambers on November 3, 2025 affirmed Malaysia retains the right to terminate by written notice to the United States,” they added.
While acknowledging legal options to amend or terminate, they raised concerns over trade balance, fiscal implications and investment outflow.
They also warned of potential effects on existing free trade agreements and recognised potential benefits in digital trade, semiconductors, pharmaceuticals and higher regulatory, labour and environmental standards.
The MPs recommended five steps, including engaging international trade experts and a comprehensive cost benefit analysis.
They proposed a high level advisory foreign policy team and a special division in Miti to coordinate and update investors and industry.
The agreement between the United States and Malaysia was witnessed by Trump and Prime Minister Datuk Seri Anwar Ibrahim on Oct 26 during the Asean Summit 2025.
This agreement sets specific, stable tariff rates, such as a 19% rate on certain items, intended to provide certainty and relief for Malaysian exporters amidst broader, fluctuating US tariff regimes.
