U.S. Government Inks Trade Deals With Cambodia And Malaysia

In late October, President Donald Trump announced that his administration had reached trade agreements with Cambodia and Malaysia and is making progress in talks with Thailand and Vietnam. According to the White House proclamation, key terms of the agreement with Cambodia include:

• A commitment by the Cambodian government to eliminate tariffs on 100 percent of U.S. industrial goods exported to Cambodia;
• A commitment by the U.S. government to maintain reciprocal tariffs at 19 percent for originating goods from Cambodia;
• A commitment by both countries to address Cambodia’s non-tariff barriers that affect bilateral trade in priority areas;
• A commitment by Cambodia to protect internationally recognized labor rights, to adopt and maintain high levels of environmental protection, and to effectively enforce its environmental laws; and
• A commitment by both countries to strengthen economic and national security cooperation and to enhance supply chain resilience and innovation through complementary actions to address duty evasion and cooperating on investment security and export controls.

The proclamation also said the U.S. government may “positively consider the effect that the agreement has on national security, including taking the agreement into consideration when taking trade action” on Section 232 tariffs. The agreement with Malaysia, outlined by the White House at this link, calls for:

• The Malaysian government to join the Global Forum on Steel Excess Capacity and to take effective actions to address global excess capacity in the steel sector;
• The Malaysian government to provide significant preferential market access for U.S. products exported to Malaysia across goods sectors, including metals, chemicals, machinery and electrical equipment, passenger vehicles, and more;
• The U.S. government to maintain a 19 percent reciprocal tariff rate for imports of Malaysia except for identified products from the list set out in Annex III to Executive Order 14346, which will receive a zero percent reciprocal tariff rate;
• The Malaysian government to address a range of non-tariff barriers, including by streamlining import licenses for U.S. alloy steel and pipe products, and steel-containing goods and removing restrictions on imports of remanufactured goods;
• The Malaysian government to expedite the development of its critical minerals and rare earths sectors in partnership with U.S. companies;
• The governments of both countries working together to increase supply chain resilience, including by taking complementary actions to address unfair trade policies of third parties, cooperating on export controls and investment security, and addressing duty evasion;
• The Malaysian government strengthening efforts to protect internationally recognized labor rights and maintaining high levels of environmental protection in order to effectively enforce its own environmental laws; and
• The Malaysian government addressing the distortionary behaviors of its state-owned enterprises when engaging in commercial activities and the distortions caused by domestic manufacturing subsidies.

The Office of the U.S. Trade Representative has more information at this link.