Malaysia faces US trade action if violations found, warns Johari

 The investment, trade and industry minister reminds Malaysian firms that exports to the US must comply with international labour standards.

Investment, trade and industry minister Johari Ghani said Malaysia is among 60 countries that have a trade surplus with the US.

PETALING JAYA:

 Malaysia faces trade action by the US if its investigations under its domestic laws, which allow the imposition of import tariffs, find violations of international trade rules, says investment, trade and industry minister Johari Ghani.

Johari said the investigations will be conducted under Section 301 of the US Trade Act of 1974. Additionally, Section 122 of the same Act allows a temporary tariff rate of 10% to be imposed on imported goods.

“This (tariff) measure can only be implemented within a period of about five months, before further investigations are conducted on nearly 60 countries with a trade surplus with the US, including Malaysia,” he said in a statement.

Johari said the investigations will focus on several aspects, including the possibility of export price dumping, compliance with international labour standards, environmental protection, and government subsidies.

The investigations will also look into whether a country is exporting products to the US at prices far below domestic market prices, thereby harming the country’s industry.

He said companies exporting to the US need to comply with international labour standards set by the International Labour Organization (ILO), which include zero usage of forced labour.

“They are not just investigating Malaysia but also 60 other countries. So, as a country that wants to trade with the US and has an export value of RM233 billion per year, of course we need to comply (with these conditions).

“(All) of our companies that export to the US need to ensure that they comply with these conditions,” he said.

Yesterday, Johari said Malaysia will give an explanation to the US regarding allegations of structural excess capacity and production as well as the use of forced labour.

He said that even if Malaysia has excess production capacity, it does not mean Malaysia is dumping the products exported to the US, Bernama reported.

This comes after the US on Wednesday began investigations into the acts, policies, and practices in 15 trade partners, including Malaysia and the European Union, under Section 301(b) concerning structural excess capacity and production in the manufacturing sector.

Most recently, the US, through trade representative Jamieson Greer, on Thursday launched investigations into 60 economies under the same section of the Act, which was created, among other things, to address failures to take action against forced labour. - FMT