Malaysia Can Terminate Trade Agreement with US
- Kuala Lumpur - Malaysia possesses the unilateral right to terminate the Agreement on reciprocal Trade (ART) with the United States at any time, provided it delivers written notice.
- The ART will officially take effect 60 days after both Malaysia and the US exchange written notifications confirming the completion of their respective domestic legal procedures.
- Before either party can take action against the other regarding implementation, the ART mandates good-faith consultations between Malaysia and the US. Though, both nations, as members of the...
Malaysia Retains Right to Terminate US Trade Agreement, AGC Confirms
Table of Contents
– Updated November 3, 2025, 20:08:45 PST
Agreement Details and Termination Rights
Kuala Lumpur – Malaysia possesses the unilateral right to terminate the Agreement on reciprocal Trade (ART) with the United States at any time, provided it delivers written notice. This right is explicitly outlined in Article 7.5 of the ART and does not require US consent, according to a statement released by the Attorney-General’s Chambers (AGC) on October 27, 2023. The AGC emphasized that the agreement’s protections are designed to uphold Malaysia’s sovereignty and national interests.
The ART will officially take effect 60 days after both Malaysia and the US exchange written notifications confirming the completion of their respective domestic legal procedures. Malaysia’s implementation of the agreement remains subject to all applicable domestic laws and procedures.
Consultation and WTO Compliance
Before either party can take action against the other regarding implementation, the ART mandates good-faith consultations between Malaysia and the US. Though, both nations, as members of the World Trade Organization (WTO), will continue to abide by the rights, obligations, and protections established under the WTO agreement for international trade, as per Article 7.1 of the ART. The WTO provides a framework for global trade rules.
Background of the Agreement
The ART was signed on October 26, 2023, during the 47th Asean Summit in Kuala Lumpur. The agreement stems from a US proposal to renegotiate tariffs on Malaysian goods, reducing them from 25% to 19%, under Executive Order 14257, issued by former US President Donald Trump on april 2, 2021.
Negotiations where led by Malaysia’s Investment, Trade and Industry Ministry, with the US represented by the Office of the United States Trade Representative. The Ministry collaborated with relevant Malaysian ministries and agencies, and the Cabinet ultimately approved policy decisions related to the ART after considering economic, political, and legal factors.