The Malaysia-US defence agreement: Malaysia’s calculated move

For decades, Malaysian have been carried out training and military drills with U.S. For example, year 2024 marked 30th anniversary of Cooperation Afloat Readiness and Training (CARAT). In addition, U.S. forces have also been training in dense tropical terrain in Malaysia as a primary location for jungle warfare training. This partnership endured political changes on both sides, based on professionalism rather than ideology.

The recent signing of the Malaysia–United States Defence Cooperation MOU marks a breakthrough in this long but informal relationship. Malaysia has chosen to institutionalise this defence engagement with Washington, transforming decades of ad-hoc cooperation into a structured framework. More importantly, this document does not create a military alliance but providing a clear structure for future collaboration in various areas. In essence, it ensures the cooperation continues with transparency, consistency, and mutual respect.

In fact, Malaysia is not the first country in ASEAN that formalising its defence cooperation with Washington.

Compared to other ASEAN countries, Kuala Lumpur stressed that this deference agreement does not imply deviation from its ‘neutral and non-aligned’ policy.

The terms neutral and non-aligned carry very different meanings in international relationship. A neutral state commits to abstain from participation in any armed conflict between other nations and bounded by international law to treat all equally; while Non-alignment is a political choice rather than a legal status. A non-aligned nation does not pledge to any major power, yet it reserves the right to cooperate with all, according to its national interests.

So, why this agreement now?

The South China Sea is no longer a geopolitical debate; instead, it is a day-to-day operational challenge for Malaysia’s maritime security forces. Chinese coastguard and militia vessels have been repeatedly entering waters claimed by Malaysia, especially around Luconia Shoals off Sarawak, it produces a pattern of close-in presence that complicates economic activities such as fishing, exploration activities and sovereign patrols.

These encounters have not been limited to benign shadowing, but also risky manoeuvres. Kuala Lumpur has publicly acknowledged these challenges, calling for sustained dialogue while stressing the urgency to strengthen defence posture and awareness in maritime domain to deter coercive behaviour and protect economic interests in EEZ of Malaysia.

Beyond these frictions, the South China Sea sits at the main stage of a larger Indo-Pacific strategic contest. The U.S. has been recalibrating its strategy to prioritise the Indo-Pacific and deepening its partnership across the region, while China has been expanding its maritime presence.

For Malaysia this means two things: First, the country must protect its sovereign rights and economic lifelines, from the Strait of Malacca surrounding, sea-lanes remain vital to the trading and energy security of Malaysia. It requires continuous surveillance, logistics and interoperability with different partners. Secondly, as regional security architectures escalated through bilateral pacts, AUKUS-style arrangements, and deeper U.S. partnerships across Southeast Asia, Malaysia faces a strategic risk of being sidelined if important channels to coordinate incident-management, information sharing, and joint responses not institutionalised. Hence, this MoU can be interpretated as a hedging instrument – it is not a formal alliance, but a move to ensure the capability to deter, respond, and maintain freedom of navigation, while continuing to engage ASEAN processes and diplomacy.

One of the most tangible benefits of Malaysia in this MoU lies in the potential access to advanced U.S. defence technology, training, and maintenance systems, which were previously out of reach due to regulatory.

The U.S. has some of the world’s most sophisticated communications, maritime surveillance and logistics systems. Hence, Institutionalisation of the defence cooperation creating both legal and technical channels for Malaysia to tap into this unique ecosystem, strengthening the interoperability of the Malaysian Armed Forces (MAF) to work more seamlessly with regional partners during humanitarian, peacekeeping, or maritime security operations.

In addition, this cooperation could also expanded participation in Foreign Military Sales (FMS) and Excess Defence Articles (EDA) programmes, facilitating access to military spare parts, aircraft upgrades, or coastal-surveillance systems. Training exchanges, for example pilot programmes, cyber-defence workshops, or officer-level staff courses, can accelerate skill development and improve operational readiness of MAF. The collaboration not only limited to hardware alone, it may also extend further.

U.S. defence engagement often emphasises on systems management, maintenance discipline, and doctrine development, which are important elements in Malaysia Future Force 2050 initiative.

Through collaboration, Malaysia can modernise its armed forces without compromising the policy of non-alignment, ensuring elevation of technical capability while national sovereignty is preserved.

The Malaysia–U.S. defence MoU is important to Washington too.

Malaysia occupies strategic geography and political space that are central to the U.S. conception of Indo-Pacific security.

Control of logistics in the Straits of Malacca and the South China Sea affects global trade and the projection of naval power. A formal partnership with Kuala Lumpur helps the U.S. to build a more resilient regional network of interoperable partners and forward logistics flexibility.

Such agreements meant a lot to U.S. It does not only enable routine intelligence-sharing, joint maritime domain awareness, access arrangements for replenishment and maintenance, and smoother coordination during crises, more strategically to reassure allies without extending treaty guarantees to every partner.

As most ASEAN countries trading heavily with China while leaning on U.S. technology and security, the U.S. policymakers increasingly view the economic dependence as a strategic vulnerability that can be exploited.

The U.S. will press for deeper economic and technological alignment where its own interests are involved, offer incentives to reduce dependence on China, and nudge partners toward resilience through diversified supply chains, standards alignment and etc.

The Malaysia–U.S. defence MoU is a pragmatic step, not a policy shift.

Far from an abandonment of its non-alignment policy, it is a pragmatic move that signals Malaysia is serious about defending its sovereign rights while plugging capability gaps it cannot afford alone.

The agreement allows Malaysia to strengthen maritime surveillance, logistics and crisis response in various ways without significant increment in defence budgets.

Next, the government should couple this institutionalised cooperation with transparency, parliamentary oversight, and exit clauses. Managed well, this agreement will be less about taking sides, but ensuring Malaysia remains secure and sovereign in a contested Indo-Pacific.

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Phar Kim Beng, PhD, Professor of ASEAN Studies, Director of Institute of Internationalization and ASEAN Studies (IINTAS), International Islamic University of Malaysia