Malaysia-US talks on forced-labor trade action conclude

Malaysia says one difficult chapter in its trade discussions with the United States has ended. Talks over US action linked to imports made with forced labor are complete, according to Investment, Trade and Industry Minister Johari Abdul Ghani.

The focus has now shifted to excess capacity. Johari said the United States is close to completing an investigation involving Malaysia and expects to announce the findings in three to four weeks, after legal review and approval.

Malaysia’s concern is the way Washington defines excess capacity. Johari said the definition also takes capacity in third countries into account, an issue that remains under discussion. “They are close to finalizing the investigation into excess capacity. I think the forced-labor issue has been resolved,” he said. “On excess capacity, this is the matter we need to negotiate. I will continue explaining to them that we do not have excess capacity.”

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They are close to finalizing the investigation into excess capacity. I think the forced-labor issue has been resolved.

Malaysia is among 60 trading partners facing US tariffs of between 10% and 12.5% after the countries failed, according to previous reports, to implement and enforce bans on imports made with forced labor. The Office of the US Trade Representative said Malaysia faces a 10% tariff under Section 301 of the Trade Act of 1974.

Johari said Malaysia has held numerous discussions with Washington to explain its position. “Imagine, we were imposed a 10% rate and we have held many negotiations,” he said. “We negotiated with the US and explained to them that we do not have excess capacity.” For now, he said, the current situation remains in place.

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On excess capacity, this is the matter we need to negotiate. I will continue explaining to them that we do not have excess capacity.