Kuala Lumpur, El Sky News — Controversy is rising over the Reciprocal Trade Agreement (ART 2025) between Malaysia and the United States after several NGOs led by the Malay Economic Action Council (MTEM) under the Secretariat Kesatuan Melayu publicly called for the deal to be revoked, claiming it is “imbalanced” and threatens Malaysia’s sovereignty.
The demand for cancellation emerged shortly after the government confirmed that ratification procedures were underway following the signing of the agreement.
What Is ART 2025?
The Reciprocal Trade Agreement (ART) was officially signed on 26 October 2025, during the 47th ASEAN Summit in Kuala Lumpur.
Unlike a Free Trade Agreement (FTA), ART is described by the government as a limited reciprocal trade mechanism, designed to reduce tariff pressure from the US while preserving Malaysia’s legal autonomy and domestic policy control.
Key Points of the Agreement
Tariff rate for Malaysian exports to the US set at 19%, down from previous rates reaching up to 25%. 1,711 tariff lines exempted covering products such as:
- Palm oil
- Rubber
- Cocoa
- Aerospace components
- Pharmaceuticals
Estimated export value protected: RM22 billion
Under the agreement, Malaysia retains the right to withdraw from ART atany time via written notification a clause cited by the government as proof that sovereignty remains intact.
Major Concerns Raised by NGOs and Critics
Several NGOs, led by MTEM, argue that ART 2025 may impose long-term constraints on Malaysia’s policymaking autonomy. Their main concern is that the concept of “reciprocal commitments” could eventually pressure the government to align domestic regulations with US standards, limiting the nation’s freedom to develop independent economic strategies. Critics also warn that small and medium enterprises (SMEs), traditional agricultural sectors, and Bumiputera-led industries may struggle to compete if foreign companies gain broader access to local markets. While the agreement offers tariff reductions, many fear that hidden non-tariff commitments including regulatory standards, import rules, and market access provisions could introduce indirect external influence over Malaysia’s economic direction.
Government Response
The Ministry of Investment, Trade and Industry (MITI) firmly denied claims that ART threatens national sovereignty. Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz emphasized that Malaysia is “not blindly submitting to any foreign demands”, and no domestic law will be altered because of ART.
Government’s Main Arguments:
- ART is defensive, not aggressive intended to protect exports against US tariff hikes.
- No legal amendments have been required for implementation.
- A public FAQ & document archive on ART has been launched to maintain transparency and accountability.
- Parliament retains oversight, and Malaysia legally reserves the right to terminate the deal at any time.
What Comes Next?
As the issue gains political traction, several outcomes are now possible:
- Parliament debates and potential scrutiny of ART’s long-term implications.
- Monitoring mechanisms may be introduced to evaluate impacts on SMEs, agriculture, and export sectors.
- Public trust will depend on how clearly and consistently the government communicates ART’s real benefits.
NGO pressure suggests this will not be a short-lived controversy ART could become a major political flashpoint in the coming months. ART 2025 offers economic protection and export stability, but also raises legitimate questions about sovereignty, policy freedom, and long-term impact on local industries.
