Malaysia-US rare earths deal sparks parliamentary clash over sovereignty
A landmark trade agreement under which Malaysia waived its moratorium on exports of unprocessed rare earth materials to grant the United States preferential access to critical minerals has triggered heated debate in Parliament. Trade and Industry Minister Tengku Abdul Aziz defended the deal against claims it compromises national sovereignty and circumvents domestic export restrictions.
The official Bernama news agency said the controversy erupted when Dewan Rakyat Speaker Johari Abdul issued a stern warning to members of parliament against insulting civil servants during debates over the Malaysia-US Reciprocal Trade Agreement, as tensions flared following the minister’s briefing on the pact signed during President Donald Trump’s visit this week to Kuala Lumpur.
Under the agreement, Malaysia committed to refrain from banning or imposing quotas on exports to the US of critical minerals or rare earth elements, effectively waiving the country’s January 2024 ban on rare earths exports that was designed to encourage domestic processing and downstream industries. Malaysia will partner with American firms ‘to create certainty for businesses to increase production capacity’.
Defending the deal, Aziz said it could not be compared to a standard free trade agreement, describing it as a response to an ‘unprecedented, unilateral tariff situation imposed without consultation’ by the United States. He explained the agreement was necessary to avert steep US tariffs on over 1,700 Malaysian export items, including palm oil, rubber and pharmaceuticals, which Washington had imposed unilaterally amid escalating trade tensions.
Refuting that his country had kneeled to Washington, he said, ‘Malaysia is not a country that obeys any power. We are a respected nation capable of standing on our own, defending our sovereignty, and protecting the interests of our people.’
Malaysia officially has an estimated 1.6 million metric tonnes of rare earth element deposits.
Azmin Ali, a former international trade and industry minister and head of Malaysia’s main opposition Perikatan Nasional alliance, attacked the deal, saying it will undermine the country’s economic sovereignty, according to local reports. He said among the most damaging clauses was one requiring the Malaysian government to copy any US trade restrictions or sanctions against other countries.
‘If Washington decides to block imports from China or Russia, Malaysia must do the same, even if it harms our economy,’ he noted.
The agreement also commits Malaysia to explore the establishment of a mechanism to review inbound investment for national security risks, including in connection with critical minerals and critical infrastructure, and to cooperate with the US on matters related to investment security.
