Former prime minister Dr Mahathir Mohamad has issued a strong warning over the Agreement on Reciprocal Trade (ART) between Malaysia and the United States, claiming that the deal places the country at a disadvantage and risks undermining long-established Bumiputera interests. His remarks were triggered by a recent challenge from Investment, Trade and Industry Minister Tengku Zafrul Aziz, who had asked the former leader to prove his assertion that American companies could override Bumiputera preferences as a result of the agreement.
Mahathir responded by drawing attention to Clause 6.2(1) of the ART, which he argued removes Malaysia’s ability to provide non-commercial assistance, subsidies, or preferential treatment to government-linked companies when dealing with American entities. He suggested that such restrictions effectively block the government from enforcing Bumiputera-related quotas and policies that give local firms an advantage.
He added that Tengku Zafrul later pointed to an exception within the clause—one that allows subsidies or support provided the assistance falls under what is termed public service obligations. The minister implied that this would still allow Malaysia to protect Bumiputera interests. Mahathir, however, rejected this interpretation, viewing the existence of that exception as confirmation that the broader clause does, in fact, prohibit Bumiputera-focused preferential treatment unless the situation fits narrowly defined criteria.
The former prime minister questioned what public service obligations actually entail, noting that the agreement does not clearly define whether Bumiputera-related protections fall under that category. He further argued that decisions on such obligations would not lie solely with Malaysia but would involve the United States as well, given the nature of the bilateral agreement.
Mahathir claimed that the wording throughout the ART overwhelmingly favours American commercial interests. He also said Zafrul himself had earlier admitted that Malaysia had no choice but to sign the deal. The former leader questioned the minister’s assertion that Malaysia had set firm boundaries to defend Bumiputera concerns, insisting that the real red lines were drawn by the Trump administration, as previously remarked by the US ambassador to Malaysia. Mahathir pointed out that neither Zafrul nor Prime Minister Anwar Ibrahim had denied this.
He urged the government to stop defending a deal he believes threatens national sovereignty and to begin efforts to reverse the agreement. Mahathir also advised the minister to acknowledge any missteps in approving the arrangement instead of dismissing criticism. According to him, numerous experts share the same concerns and believe the ART compromises Malaysia’s long-term interests.
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