MPs Urge RCI to Probe Malaysia–US Reciprocal Trade Agreement

14 November 2025

KUALA LUMPUR: Three Members of Parliament have called for a Royal Commission of Inquiry (RCI) to be set up to investigate the signing of the United States-Malaysia Reciprocal Trade Agreement.

They called for the RCI to examine claims that Malaysia was “forced” into negotiations, why an agreement was signed instead of a Memorandum of Understanding (MOU) or framework, and to recommend stronger governance and consultation mechanisms for future trade deals.

In a joint statement, Wong Chen (Subang), Nik Nazmi Nik Ahmad (Setiawangsa) and Rafizi Ramli (Pandan) said their review of the agreement, signed on 26 October, showed it to be “heavily lopsided in favour of the United States”.

The MPs pointed to remarks by Deputy Investment, Trade and Industry Minister Liew Chin Tong on 3 November, where he reportedly said Malaysia had been “forced” into negotiations and that the process did not reflect an equal partnership.

“Additionally, we are convinced, based on the official responses and lack of clarity of the text, that the signing of the agreement was done without comprehensive cost-benefit analysis and adequate public consultations,” they said.

They added that Articles 5.1, 5.2 and 5.3 of the agreement could constrain Malaysia’s sovereign rights if exercised by the United States, potentially forcing Malaysia to align with US national security and economic interests

The MPs said if this scenario happens, it would be a major departure from Malaysia's long-standing foreign and trade policy of active neutrality and Asean centrality.

Despite these concerns, they acknowledged that Malaysia retains legal avenues to protect its interests, including seeking amendments under Article 7.3 or terminating the agreement under Article 7.4.

“We agree with Prime Minister Anwar Ibrahim, who on 30 October 2025, asserted in Parliament that Malaysia has an “exit clause” and can terminate the Agreement as a way out of the sovereignty question.

"We also note with deep concern that the agreement could carry direct and indirect negative implications for Malaysia, including impacts on the trade balance, fiscal exposure, investment flows and possible conflicts with existing Free Trade Agreements (FTAs),” they said.

At the same time, they noted potential benefits in areas such as digital trade, semiconductors, pharmaceuticals, labour rights and environmental protection.

The MPs proposed several recommendations to the government, beginning with their call for an RCI to probe the negotiation process.

They also urged the government to appoint reputable international trade lawyers to review and clarify the agreement’s provisions, advise on obligations and assess overlaps with existing FTAs and multilateral agreements.

Additionally, they called for the formation of a task force of international trade experts and economists to conduct a comprehensive cost-benefit analysis of the agreement and report its findings to Parliament.

The MPs further recommended the creation of a high-level advisory team to evaluate geopolitical implications for Malaysia’s foreign policy.

They also urged MITI to establish a dedicated division to coordinate with other ministries and keep investors and industry stakeholders informed on issues arising from this agreement.