Malaysia Us Trade Agreements

Malaysia and the United States have a long-standing trade relationship that has been codified through numerous trade agreements. These agreements have helped to promote economic growth and cooperation between the two countries, and have facilitated the exchange of goods and services across borders. In this article, we will explore the history of Malaysia-US trade agreements, their importance, and the challenges they face.

The History of Malaysia-US Trade Agreements:

The United States has been a key trading partner for Malaysia for many years. As early as 1955, Malaysia and the US signed a trade agreement that laid the foundation for future trade relations. Since then, many other agreements have been signed, including the Generalized System of Preferences (GSP), which provides preferential tariff treatment for certain products imported from developing countries, including Malaysia.

In 2006, the US and Malaysia signed the US-Malaysia Free Trade Agreement (FTA), which was meant to further strengthen bilateral trade relations. However, the FTA was never ratified by the US Congress due to concerns over labor rights and transparency issues in Malaysia.

Despite the lack of a formal FTA, trade between Malaysia and the US has continued to grow. In 2019, bilateral trade between the two countries totaled $59.5 billion, with Malaysia exporting primarily electronics, rubber, and chemicals to the US, while the US exported mainly machinery, aircraft, and medical instruments to Malaysia.

The Importance of Malaysia-US Trade Agreements:

Trade agreements between Malaysia and the US are crucial for promoting economic growth and creating job opportunities in both countries. These agreements reduce barriers to trade and investment, increase market access, and ensure a level playing field for businesses in both countries. For Malaysia, the US is an important market for its exports, particularly electronics and petroleum products. For the US, Malaysia is an important gateway to the broader Southeast Asian region, which is home to over 600 million people and a rapidly growing middle class.

Challenges Facing Malaysia-US Trade Agreements:

Despite the importance of trade relations between Malaysia and the US, there are several challenges that must be addressed. One of the biggest challenges is the US-China trade war, which has had spill-over effects on many other countries, including Malaysia. As China and the US seek to reduce their dependence on each other, Malaysia could potentially benefit from increased demand for its exports. However, the ongoing dispute has also created uncertainty and volatility in global trade, which could negatively affect Malaysia-US trade relations.

Another challenge is Malaysia`s labor rights record, which has been a sticking point in previous attempts to ratify a formal FTA. While Malaysia has made progress in recent years on issues such as forced labor and human trafficking, there are still concerns over the treatment of workers in certain industries. Addressing these issues will be important for enhancing trust and cooperation between Malaysia and the US.


Malaysia-US trade agreements have been instrumental in promoting economic growth and cooperation between the two countries. While there are challenges to be addressed, the potential benefits of a strong trade relationship are significant. As both countries look to navigate a complex and rapidly changing global economy, continued cooperation and dialogue will be essential for ensuring the success of their trade agreements.