Malaysia and ASEAN push for UN Security Council veto power reforms
Foreign Minister Datuk Seri Mohamad Hasan highlighted that while resolutions on Gaza receive majority support in the UN General Assembly, their execution is often stalled due to vetoes by China, France, Russia, the UK, and the US.
'Unfortunately, this veto power was used even though the resolution was unanimously approved at the UN General Assembly.
'That is why we are proposing that this veto power be overhauled and changed,' Mohamad said during a Dewan Rakyat session.
The proposal follows Malaysia's diplomatic success at the ASEAN-GCC Summit, where a joint statement on Gaza was issued for the first time.
'Previously, it was difficult to get a joint statement among ASEAN countries. But now we have succeeded in doing so,' he added.
Malaysia is also collaborating with Japan and Korea to address Gaza's humanitarian crisis. - Bernama
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PETALING JAYA: As Malaysia pledges to invest, including with purchases, over US$240bil in the United States to reduce its trade gap with Washington, economists and analysts generally think it is a necessary step that needs to be taken to secure a competitive tariff rate. That being said, some experts acknowledge that the amount of capital involved means that the commitment could be a significant bill to foot, especially over the short term. Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz reported yesterday that Malaysia would be investing up to RM1.02 trillion – over variable time frames on different deals – which he said helped lower the country's tariff rate from 25% to 19% with President Donald Trump's administration. 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'While the 19% rate means we lose the comparative advantage of having the lowest tariff in the region, it at least ensures we are not worse off than some of our regional peers. 'It is important to remember that zero tariffs are not an option – any agreed rate would be higher than what was in place before Liberation Day. The focus, therefore, is on securing the lowest possible rate,' she told StarBiz. Goh said the ideal or optimal rate of investments that Malaysia should commit to in striking the trade deal likely depends on the share of US exports and Malaysia's trade surplus, and as such, Putrajaya's commitment needs to be substantial enough to reflect that. She noted that securing a lower tariff rate could lead to cost savings and reduced tariff access for US suppliers would benefit both local firms and multinational corporations that source from the United States for domestic assembly, testing or manufacturing. 'Moreover, not all committed investments originate directly from the government. Many of the purchases are driven by commercial considerations,' she said. Looking from the perspective of the last three years, Asia Pacific chief economist at credit insurer Coface, Bernard Aw, observed that Malaysia's goods trade surplus with the United States averaged US$15bil to US$16bil from 2022 to 2024. Meanwhile, he said Malaysia's imports from the United States rose sharply in 2024 to nearly US$30bil, before estimating from Tengku Zafrul's statement yesterday that Malaysia is offering at least US$33bil worth of purchases each year across various sectors. 'If realised, these deals could turn Malaysia's goods trade surplus with the United States into a deficit,' he cautioned. Aw explained that the key American products that Malaysia imports are integrated circuits, computers, semiconductor manufacturing equipment, engines and aircraft, all of which the United States is already a dominant source, especially in aircraft and engines. 'This puts forth the question as to whether Malaysia can import more from the United States. 'In Malaysia's imports of electronic integrated circuits where the United States accounts for 14%, is Malaysia able to reduce imports from other key sources such as Taiwan, Singapore, China and Japan to increase US-originated imports? 'This may be possible in the long term as supply chains evolve, but a tall order in the short term,' said Aw. To meet its investment commitment, Aw further approximated that Malaysia is to invest US$7bil each year in the United States over the next 10 years. Citing the country's balance of payments data, he reported that Malaysia's direct investment abroad in 2024 totalled to around US$13.9bil. 'This means half of the country's foreign direct investment must go to the United States (from here on in), which seems quite challenging to achieve,' he said. Doris Liew, an economist specialising in South-East Asian development, opined that Malaysia's investments in the United States could give the former a stake in the latter's industrial development, with the hope that deeper economic integration will follow. Ideally, she said such integration will be two-way, encouraging American firms to invest in Malaysia as both markets become more interconnected. Liew said the latest round of tariff reductions placed Malaysia on more equal footing with regional neighbours by neutralising previous tariff advantages or disadvantages. 'As a result, investment decisions are now more likely to hinge on fundamentals rather than preferential trade treatment. Countries with trade agreements in place, including Malaysia, will enjoy a more level playing field compared to those without such deals, although that group is shrinking over time,' she said. She added that sectors such as semiconductors and data centres may particularly benefit, especially if they can leverage their foreign involvement to foster stronger technological integration with the US economy. This means aligning and linking both countries' supply chains to enable knowledge and technology transfer back home, as outward foreign direct investment also plays a role here by allowing domestic firms to acquire capabilities abroad and upgrade their operations locally based on global best practices. Head of dealing at Moomoo Malaysia Ken Low concurs with Liew, remarking that Malaysia's 'significant investment' could positively impact its economy by enhancing technological capabilities, driving industrial upgrading, creating new employment opportunities and attracting foreign investment through improved global market perceptions. In addition, he said the reduction of Washington's tariffs on Malaysia partly validated the strategic reasoning behind such a sizeable investment. Nonetheless, he said although the immediate tariff reduction provided some short-term economic clarity and relief, the longer-term benefits for Malaysia will depend primarily on the effectiveness of technology transfer, domestic productivity enhancements, and export growth stemming from these agreements. Of particular interest, economist Geoffrey Williams notably believes that Malaysia could have been given a larger tariff reduction. He commented that the number of planes to be bought by MAG is smaller than other countries, and it is not clear if the purchase is a normal replacement of the fleet, substitution of Boeing in place of Airbus, or an actual new net investment. 'It is also clear that orders of Boeing planes around the world are rising so delivery will be delayed and the new orders may not appear until long after President Trump has ended his second term. The orders could then be cancelled. 'So it may be smoke and mirrors and this would explain in part why the tariff reduction was small,' said Williams. His sentiment was perhaps reflected by the performance of the FBMKLCI yesterday, which dropped 6.37 points to close at 1,526.98 points, as losers edged gainers 463 to 356. Head of equity sales at Rakuten Trade Vincent Lau added that investors in the local bourse could also be cautious over US job prospects, which reports said were 'weakening', as well as dips in regional bourses over the past week. 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