Washington: Malaysia has committed to the expedient development of its critical minerals and rare earths sectors in partnership with United States companies, including granting extended operating licences to create certainty for businesses to increase production capacity.
According to BERNAMA News Agency, the Joint Statement on the US-Malaysia Agreement on Reciprocal Trade announced that Malaysia will refrain from banning or imposing quotas on exports of critical minerals or rare earth elements to the US. Furthermore, Malaysia has pledged not to restrict the sale of rare earth magnets to US companies.
The statement also highlighted commitments from both Washington and Putrajaya to bolster economic and national security cooperation, enhance supply chain resilience and innovation, address duty evasion, and collaborate on investment security and export controls.
Commercial deals between American and Malaysian companies were noted, including the procurement of 30 aircraft with an option for 30 more, and purchases of semiconductors, aerospace components, and data centre equipment valued at USD150 billion. Additional agreements include the purchase of up to five million tonnes of liquified natural gas annually, valued at up to USD3.4 billion per year, and the purchase of coal and telecommunication products and services worth USD204.10 million. Capital fund investments in the US are expected to reach USD70 billion.
The joint statement underscored the Agreement on Reciprocal Trade, which aims to strengthen the bilateral economic relationship by providing exporters unprecedented access to each other's markets. This builds on the US-Malaysia Trade Investment Framework Agreement signed in 2004.
The White House stated that Malaysia will offer significant preferential market access for US industrial goods exports, including chemicals, machinery, electrical equipment, metals, and passenger vehicles, as well as agricultural exports like dairy, horticultural products, poultry, and more. The US will maintain reciprocal tariffs at 19 per cent, with certain products receiving a zero per cent tariff rate.
Malaysia has also committed to addressing non-tariff barriers impacting bilateral trade in priority industrial areas and preventing such barriers for US food and agricultural products in the Malaysian market.
Finally, discussions between the US Department of the Treasury and Bank Negara Malaysia are ongoing to finalise mutual understanding on currency policy. Both countries will undertake domestic formalities in the coming weeks before the agreement comes into force.