MALAYSIA’S commitments on trade in services under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership are not automatically extended to United States firms without protections, the Senate was told on Monday.
Responding to a question from Senator Tan Sri Low Kian Chuan, Deputy Investment, Trade and Industry Minister Liew Chin Tong explained that Article 2.7 of the Malaysia–United States Reciprocal Trade Agreement operates within clearly defined parameters and does not undermine Malaysia’s strategic interests.
“This Agreement incorporates, mutatis mutandis, any commitment concerning trade in services that Malaysia has made or hereafter makes in a trade agreement to any third country, jurisdiction, or economy,” the minister said, quoting the provision directly.
He clarified that the clause applies with “mutatis mutandis”, or necessary modifications, and excludes commitments made under ASEAN agreements. In practice, the article functions as a most-favoured-nation clause for services, ensuring Malaysia does not accord more favourable treatment to another trading partner without extending similar consideration to the United States.
The minister said this mechanism formed part of a broader negotiation package designed to secure reciprocal benefits for Malaysia, including tariff certainty at a 19 per cent rate, exemptions covering 1,711 tariff lines for Malaysian exports, and due consideration by the United States in the imposition of additional tariffs on the semiconductor sector.
He added that commitments under CPTPP and RCEP are not blanket concessions, as both agreements contain conditions, limitations and exclusions that continue to protect Malaysia’s strategic sectors.
These safeguards ensure national interests remain preserved even as Malaysia engages in wider market access arrangements.
The explanation was aimed at addressing concerns that Article 2.7 could result in unilateral advantages for American firms, with the government reiterating that the provision is part of a reciprocal framework rather than an automatic extension of market access without corresponding benefits.
Trade Missions Generate Nearly RM494 Billion in Potential Investments
Meanwhile, overseas trade and investment missions undertaken by the government since 2023 have generated potential investments totalling RM493.6 billion across 181 proposed projects, the Ministry of Investment, Trade and Industry told the Dewan Negara on Monday.
Responding to a question from Senator Datuk Wira Koh Nai Kwong, Liew said that trade and investment missions, including official overseas visits led by the Prime Minister, form part of a long-term strategy to strengthen diplomatic ties, attract high-quality investments and reinforce domestic supply chains, particularly for small and medium-sized vendors and suppliers.
The ministry clarified that the term foreign direct investment, as cited by the senator, is used by the Department of Statistics Malaysia to describe financial transactions in terms of inward and outward investment flows.
By contrast, the ministry applies the term foreign investment to refer to proposed investment projects submitted by investors.
Between 2023 and 2025, a total of 37 trade and investment missions and official overseas visits were carried out. These engagements produced proposed investments amounting to RM493.645 billion involving 181 projects. Of this total, 52 projects valued at RM123.8 billion have already received approval.
A further 38 projects worth RM48.9 billion are targeted for finalisation in 2025, while the remaining RM320.9 billion is expected to be concluded between 2026 and 2028.
Addressing concerns over whether overseas missions deliver meaningful benefits beyond headline figures, the ministry acknowledged feedback from domestic industry players who have questioned the extent of economic spillover from foreign investments.
To address this, the Malaysian Investment Development Authority is undergoing a transformation to strengthen its role beyond investment promotion.
The focus is being expanded to include closer monitoring of approved investments to ensure investors comply with stipulated conditions and deliver tangible economic benefits, in line with the New Investment Incentive Framework.
The ministry also said it is in the process of drafting an Industrial Development Bill and improving the Malaysian Investment Development Authority Act to enhance enforcement, monitoring and oversight, with the aim of ensuring that foreign investments contribute more effectively to domestic industries and the wider economy. - - December 15, 2025
