Malaysia, US face big task as free-trade talks kick off
AFP | Sun Jun 11, 2006
Malaysia, US face big task as free-trade talks kick off
KUALA LUMPUR (AFP) — The United States and Malaysia are to embark on free-trade talks in the resort island of Penang, which are being fast-tracked with the goal of striking a deal by the end of the year.
The first round of negotiations is expected to run for four days, with the US delegation led by assistant trade representative for the Asia-Pacific Barbara Weisel who is also handling stalled talks with neighbouring Thailand.
Washington has said it is "very optimistic" about clinching a free trade agreement (FTA) with Malaysia, as well as another mooted deal with
South Korea, but admits there are some troublesome issues to thrash out.
The US government is rushing to complete the talks before July 1 next year when Congress will regain the right to amend any pact negotiated by the administration.
But among likely sticking points with Malaysia are its reluctance to throw open its automobile and banking sectors, and US queasiness over Malaysia’s performance on protecting intellectual property rights.
"Trade and investment liberalisation will benefit both countries if it can be achieved... but there are obstacles to overcome," said RAM Consultancy Services chief economist Yeah Kim Leng.
"One of those is the difference in expectations of intellectual property standards. I think it is going to be a thorny issue," he said.
Malaysia has made efforts to shore up its anti-piracy efforts, announcing it will sign up to treaties protecting inventions and research, and set up a special court to handle complaints on infringement of copyright and trademark.
But despite government crackdowns, illegal movie and software discs are freely available in Malaysian street markets and even up-market shopping malls.
US ambassador to Malaysia, Christopher LaFleur, has praised Malaysia’s efforts but said intellectual property protection would be a "big component" in the talks.
"Both sides want to benefit from an increasingly free and open exchange of intellectual property, and the basis for that has to be confidence that, for both of us, our intellectual property is going to be protected," he said.
Washington has also said it will expect significant access for its cars into Malaysia’s sensitive auto market, just as national carmaker Proton struggles to survive in a newly competitive environment.
Malaysia’s automobile sector has been partially liberalised under a Southeast Asian region-wide trade deal, but stiff import duties are still imposed on foreign vehicles to protect the nation’s car industry.
The trade talks cap a transformation in the relationship between the two countries since the departure three years ago of Prime Minister Mahathir Mohamad who was renowned for his anti-Western rhetoric.
The US says that an agreement will help Malaysia, its 10th biggest trading partner, cement its most important economic relationship.
Analysts have also welcomed the development as a positive step for Malaysia’s economy that will help it attract more direct investment from the United States.
However, activists and consumer groups said an FTA could undermine job and food security and the nation’s economy.
An alliance of workers, farmers, health activists, human rights groups and others will present a protest memorandum to the negotiations venue in Penang on Monday.
"We ask the government to stop negotiations, or at least do a cost-benefit analysis for the country," said coalition spokesman Mohamed Nizam Mashar from the Consumers’ Association of Penang.
Advocacy groups representing people with HIV/AIDS have raised concerns an FTA would block access to cheaper, generic versions of drugs used in treatment of the disease.
