KUALA LUMPUR (Reuters) -Malaysia will not cross certain “red lines” in its negotiations with the United States, its trade minister said on Wednesday, as the country continues talks with Washington to lower a 25% tariff imposed on its exports.
Investment, Trade and Industry Minister Tengku Zafrul Aziz declined to go into detail about what those limits were, citing non-disclosure agreements, but he said the U.S. had made demands that encroached on Malaysia’s national interests and sovereignty.
The demands involved Malaysian domestic policies and laws in areas including digital taxes, e-commerce, medical standards, halal certification and government procurement, he said.
“We don’t want to reach a deal for the sake of reaching a deal,” he told reporters.
“If the deal does not benefit Malaysia, we should not have a deal… We have to be firm on that.”
Tengku Zafrul had earlier told the Reuters NEXT Asia summit in Singapore that Malaysia had no plans to retaliate against a 25% tariff levied on its exports to the United States and was “still optimistic” about reaching a trade deal before Aug. 1, when the tariff was set to come into effect.
The United States is Malaysia’s second-largest trade partner after China, as well as its top export destination, particularly for semiconductors and electronic goods.
At a later press conference, he said he did not know why the U.S. tariff on Malaysia was increased from an initial 24% to 25%, but said the country was committed to balancing trade with Washington and was confident any outstanding issues in the talks could be resolved.
“If you ask me… I lean towards more than a 50% (chance) of concluding it. But the timeline is key,” he said, referring to the August 1 implementation date, an extension from an initial deadline of July 9.
Tengku Zafrul said Malaysia’s negotiating team had engaged with U.S. counterparts on at least 25 separate occasions, and made commitments to improve environmental and labour protections and encouraging digitalisation and secure cross-border data flows.
Malaysia’s offer to the United States also includes purchasing at least 30 new Boeing aircraft for state carrier Malaysia Airlines, as well as deals in semiconductors and tech, he added.
(Reporting by Rozanna Latiff and Mandy Leong;)
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