Confusion over Malaysia-US trade deal as ‘null and void’ claim retracted

Malaysia’s government has been forced onto the defensive over its much-touted tariff deal with the United States, after a minister walked back an earlier claim that the agreement had been rendered “null and void” by a US Supreme Court ruling. Prime Minister Anwar Ibrahim’s administration signed the deal in October, promising US$240 billion in investments and purchases of American goods, including beef and aircraft, in exchange for continued access to the world’s largest consumer market at a tariff rate of 19 per cent. But four months on, the deal’s status has been thrown into doubt after a February ruling by the US Supreme Court that found President Donald Trump had acted unconstitutionally by using emergency powers to impose his “Liberation Day” tariffs. The confusion came to a head on Sunday when Trade Minister Johari Abdul Ghani told reporters that the court ruling had rendered the deal invalid. “It is not on hold. It is no longer there, it’s null and void,” he was quoted as saying by local English-language daily The Star. By Sunday evening, his own ministry had issued a correction. The minister had “misspoken”, it said, offering no further explanation. Officials from Malaysia’s Ministry of Investment, Trade and Industry did not immediately respond to requests for clarification from This Week in Asia. The episode handed fresh ammunition to an opposition already suspicious of the deal. Perikatan Nasional Secretary General Takiyuddin Hassan said on Monday that Johari’s statement had done nothing to resolve unanswered questions about what commitments Malaysia had made, which of them were binding and what the fallout might be for the country’s export industries, which account for more than three-quarters of Malaysia’s annual economic output. At a time of growing global trade uncertainty, clarity in policy direction and investor confidence in Malaysia are increasingly important Takiyuddin Hassan, Perikatan Nasional secretary general “At a time of growing global trade uncertainty, clarity in policy direction and investor confidence in Malaysia are increasingly important,” Takiyuddin said in a statement, calling for a special parliamentary sitting to force an explanation. In some ways, the uncertainty had been there from the start. The trade deal, signed during Trump’s whirlwind visit to Kuala Lumpur last October, was meant to provide a measure of clarity at a time when the mercurial US leader’s tariff regime was roiling markets and supply chains. Trump justified his unpredictable tariffs as being necessary to correct what he called years of trade imbalances, accusing both allies and adversaries of taking America “for a ride”. For Anwar’s government, signing up to a deal offered a way out of the tumult. But critics said the price was too high and the deal was rushed into, warning the deal would pressure Malaysia to align more closely with US foreign policy and jeopardise ties with its largest trading partner, China. Eight government MPs issued a joint statement on Monday, urging the administration to seek clarity from Washington on the deal’s status and warning that, left unresolved, Malaysia risked being locked into worse terms than those originally agreed. “At the same time, we cannot overlook the weaknesses that occurred during the negotiation” of the deal, said the MPs, arguing that voices advising the government against rushing to sign – pending a final ruling by the US Supreme Court – had been ignored. “In the end, the agreement that was signed was seen as one-sided, disadvantageous and detrimental to the country’s sovereignty,” the statement said. ‘Wait and watch’ When the US Supreme Court struck down Trump’s emergency tariffs as an unconstitutional overreach of executive power, it upended not only Malaysia’s deal but also a string of similar arrangements signed by Japan, South Korea, Vietnam, Bangladesh, Indonesia and others. Trump’s response was the imposition of a uniform 10 per cent tariff on all trading partners, stripping away whatever preferential terms had been negotiated. And just last week, Washington launched investigations into alleged unfair trade practices by nearly 60 partner nations – Malaysia included – making it even harder to justify honouring existing trade deals. “This signals that even countries that negotiated trade arrangements remain exposed to new US investigations and potential tariffs,” said Ajay Srivastava, founder of the Global Trade Research Initiative, an Indian economic think tank. Meanwhile, the US-Israel war on Iran has weakened Trump’s negotiating position by forcing him to lift sanctions on Russian oil, according to Vivek Mishra, deputy director of strategic studies at the Observer Research Foundation. This move – done in response to Iran closing the Strait of Hormuz, through which around a fifth of global oil supply passes – limited the Trump administration’s “ability to impose costs on other actors”, Vivek said. As a result, small nations like Malaysia might find themselves in a stronger negotiating position, said Amitendu Palit, senior research fellow at the National University of Singapore’s Institute of South Asian Studies. “At this stage, all deals with the US are fluid,” he said. “So countries don’t really need to walk out of these [deals]. Most countries will now adopt a wait and watch strategy.”

Confusion over Malaysia-US trade deal as ‘null and void’ claim retracted

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}First, a minister called the deal dead. Then his ministry backtracked. Now the opposition is demanding answers

First, a minister called the deal dead. Then his ministry backtracked. Now the opposition is demanding answers