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Malaysia threatens to halt FTA talks with US after call to scrap Iran deal: report

The Associated Press | Thursday, February 1, 2007

Malaysia threatens to halt FTA talks with U.S. after call to scrap Iran deal: report


Malaysia has warned it would drop free trade talks with the United States if it is asked to scrap a multi-billion-dollar gas deal with Iran, a news report said Friday.

U.S. House of Representatives’ Foreign Affairs Committee chairman Tom Lantos has urged trade officials to suspend FTA talks with Malaysia until it halts a US$16 billion (€12.4 billion) deal to develop gas fields in southern Iran.

The United States is working to sanction Iran over what it believes is an Iranian program to develop nuclear weapons.

In an angry reaction, Trade Minister Rafidah Aziz told Washington to stay out of Malaysia’s affairs and warned the government will not bow to any threats, the Malay-language Utusan Malaysia reported.

"I am ready to advise the government to cancel the FTA discussions immediately because the U.S. doesn’t respect the preliminary terms of the discussion," Rafidah told the newspaper.

"Among the preliminary conditions for the FTA talks agreed between Malaysia and the U.S. are that there be no political agenda. The agreement focuses on markets and both countries don’t interfere in each other’s domestic policies," she was quoted as saying.

Malaysia doesn’t need the free trade deal, and Washington is the one pushing for it, she said.

Rafidah and other trade officials could not be immediately reached for comment Friday.

Malaysia is the United States’ 10th-largest trading partner, with US$44 billion (€35 billion) in two-way trade in 2005. Officials say that figure will double by 2010 if the pact is signed.

The tension over Malaysia’s gas deal with Iran comes ahead of a crucial fifth round of talks next week in Sabah state on Borneo island, where negotiators will attempt to bridge differences to conclude the pact before a July 1 deadline.

Despite her comments, Rafidah was quoted as saying she was confident the FTA talks would proceed.

Negotiators are under time pressure because the U.S. wants to get a Congressional vote on the pact before President George W. Bush’s special "fast-track" trade authority expires on July 1. That allows him to submit a deal to Congress for a straight up-or-down vote without amendments.

But the proposed trade agreement must wrap up by end of March so U.S. lawmakers have time to review it before a vote.

Deputy U.S. Trade Representative Karan Bhatia warned Wednesday the proposed pact may falter if negotiators fail next week to make firm progress over opening up Malaysia’s services and government contracts - two key hurdles to a deal.

 source: IHT