【By Observer News, Xiong Chaoran】In late October, the United States and Malaysia reached a trade agreement, with several clauses sparking controversy. Among them, so-called "poison pill" provisions were widely interpreted as being set by the United States to prevent Malaysia from signing a trade agreement with China alone, which has led to criticisms of "violation of national sovereignty."

"Nikkei Asia" reported on November 14 that although the agreement text did not specify a particular country, it was generally believed to target China. For days, Malaysian opposition parties have continuously criticized their government for accepting this clause as a "surrender." Azmin Ali, a member of parliament from the United Malays National Organisation (UMNO), accused the agreement of being "completely non-reciprocal" and said, "This is a surrender," stating that Malaysia had given up too much control over its own economy.

In response, Malaysian Prime Minister Anwar recently explained during a parliamentary session: "This is not a surrender, nor a betrayal, nor a new form of colonialism."

According to Malaysian media, on the 13th, a group of MPs signed a letter requesting the establishment of a royal commission to review the trade agreement between Malaysia and the United States.

During the 47th ASEAN Summit, Trump met with Malaysian Prime Minister Anwar IC Photo

"Nikkei Asia" pointed out that the term "poison pill" originated from corporate anti-takeover strategies. Simon Evenett, professor of geopolitics and strategy at the International Institute for Management Development (IMD) in Lausanne, Switzerland, compared the US's attempt to prevent Malaysia from getting closer to China to a company's defensive measures against a takeover.

He believes these clauses are equivalent to "loyalty tests" and should be viewed in the context of the growing global influence competition between the US and China.

The report stated that many Southeast Asian countries pursue "neutral diplomacy," but the US is trying to prevent regional countries from getting closer to China, and this clause may also be included in trade agreements with Thailand and Vietnam.

Indeed, the US has long been concerned about the deepening relationship between its trade partners and China, and has sought to include similar clauses in previous trade agreements.

In 2018, under Trump's first term, the US-Mexico-Canada Agreement (USMCA) contained similar provisions. The report suggests that this clause prevented Canada from signing a free trade agreement with China, which likely explains Canada and Mexico's hesitation in allowing China to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

"Nikkei Asia" emphasized that China is the largest trading partner of ASEAN, and many ASEAN member states try to develop relations with both China and the US simultaneously. Any wording that might anger Beijing could disrupt this delicate regional balance.

At the same time, China is seeking to strengthen its relations with Southeast Asia. Recently, ASEAN and China signed the China-ASEAN Free Trade Area 3.0 Upgrade Protocol, consolidating the $771 billion trade volume between the two sides in 2024. Additionally, China has applied to join the CPTPP, and countries such as Malaysia and Vietnam are members of this multilateral agreement.

Samirul Ariff Othman, senior advisor at Global Asia Consulting, believes that the US "poison pill" clause is akin to an "embedded deterrent," designed to prevent these countries from "hedging" through newly signed agreements with China, but the enforcement of these clauses may depend on how the US implements the trade agreement.

"I think we need to observe whether trade tensions will further ease to determine how the US will implement the agreement with Malaysia," said Adib Zalkapli, head of the geopolitical consulting firm Viewfinder Global Affairs.

On October 26 local time, the White House announced the conclusion of a reciprocal trade agreement (ART) with Malaysia. At the time, Malaysian MPs noted that the agreement included provisions requiring Malaysia to comply with US sanctions and unilateral export controls, questioning this move as damaging to national sovereignty.

In response, the Malaysian Ministry of Investment, Trade and Industry issued a statement on November 3 clarifying that the country's sovereignty "was not compromised" and was not subject to US sanctions. The Office of the Attorney General also mentioned that the country had the right to unilaterally terminate the agreement at any time.

On November 6 local time, the Financial Times reported that the Trump administration had added "poison pill" provisions to new trade agreements with Malaysia and Cambodia, two Southeast Asian countries, and threatened that if either country signed a competitive agreement that harmed "the fundamental interests of the US" or posed a substantial threat to "US security," the US could terminate the agreement based on this provision.

According to the Malaysian newspaper "The Star" on November 13 local time, several Malaysian MPs have issued a joint statement calling for the establishment of a royal commission to investigate claims that Malaysia was forced into negotiations and to examine why Malaysia and the US signed a formal agreement rather than a memorandum of understanding or framework agreement.

They also believe that if the US exercises the relevant dispute clauses, it could limit Malaysia's sovereign rights, forcing Malaysia to align with the US's "national security and economic interests," thus deviating from Malaysia's neutral stance and ASEAN centrality.

This article is an exclusive piece by Observer News. Unauthorized reproduction is prohibited.

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