Agreement on Reciprocal Trade (ART)

What is Agreement on Reciprocal Trade (ART)

AI Brief

The ART agreement aims to stabilise Malaysia-US trade, protect exports, and ensure fair treatment in tariffs and market access.
It focuses on targeted cooperation in sectors like semiconductors, green tech, and agriculture, without being a full FTA.
The deal supports Malaysia's industrial goals and boosts investor confidence amid global protectionism.

The Agreement on Reciprocal Trade (ART) is a bilateral trade arrangement between Malaysia and the United States designed to ensure fair, balanced, and mutually beneficial trade relations between the two countries.

It was officially signed on 26 October 2025 by YAB Prime Minister of Malaysia and The Honorable President of The United States of America.

Purpose of the Agreement - The ART aims to:

Stabilize trade relations between Malaysia and the U.S., especially after the U.S. introduced higher tariffs on countries with large trade surpluses.

Protect Malaysian exports and jobs by securing continued access to the U.S. market — Malaysia’s third-largest trading partner and a key destination for electrical & electronics (E&E), palm oil, rubber, and manufactured goods.

Promote fair treatment — ensuring that both sides apply tariffs, market access, and trade rules in a reciprocal (balanced) way.

How It Works

Unlike a full Free Trade Agreement (FTA), the ART is more targeted and flexible. It focuses on:

Tariff adjustments: Reducing or stabilizing import/export tariffs to prevent sudden hikes.

Sectoral cooperation: Covering specific industries like semiconductors, green technology, agriculture, and pharmaceuticals.

Regulatory cooperation: Aligning standards (where possible) without compromising national laws or sovereignty.

Mutual market access: Encouraging business and investment flows in both directions.

Why It Matters - For Malaysia:

It secures better trade terms amid rising global protectionism.

It strengthens investor confidence by showing that Malaysia can negotiate strategic deals with major economies.

It supports Malaysia’s New Industrial Master Plan 2030 (NIMP 2030) — especially in positioning Malaysia as a trusted global manufacturing and supply-chain hub.

This article is republished from www.miti.gov.my