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Malaysia, US free trade talks bog down

Malaysia, US free trade talks bog down

Fri Feb 9, 2007

KUALA LUMPUR (AFP) — Talks for a free trade agreement between the US and Malaysia are bogged down in sensitive issues and are unlikely to meet a crucial deadline to forge to deal, according to a senior US official.

Malaysia and the United States Friday concluded a fifth and vital round of FTA talks in eastern Sabah state during which "difficult issues" had arisen, said US Assistant Trade Representative Barbara Weisel.

"While progress was made on a number of areas, there were a few key areas where unfortunately only limited progress was made," Weisel told reporters in a video conference.

"There are strong sensitivities on both sides. We think that we can close the gap between the two positions but it is going to take some work on both sides," she said, without elaborating.

Washington has been racing to conclude the FTA by the end of March to give the US Congress the requisite time of three months to consider the deal.

The FTA must be passed before US President George W. Bush on July 1 loses his trade promotion authority which allows deals to be fast-tracked, with fears a Democrat-controlled congress will not renew the authority.

"I think it would be very difficult to conclude an FTA with the deadline we have set," said Weisel.

She said an FTA was still "achievable," although no date had been set for further talks.

"We anticipate further dialogue with Malaysian authorities over the next few weeks but we have not scheduled a round for now," Weisel said.

Malaysia’s Trade Minister Rafidah Aziz Friday said both sides had isolated "no-go" areas she would discuss with her counterpart US Trade Representative Susan Schwab.

"I and Susan will look at the sensitive issues (where) both will not move and we will decide. Are we going to remove it from the table, are we going to find some middle path, or what," she told reporters.

Rafidah indicated market access issues — including the entry of US companies into Malaysia’s protected finance, auto and services sectors — were areas under discussion.

She also insisted discussions would not include Malaysia’s positive discrimination policies for its majority ethnic Malays and indigenous groups, which sees them favoured in lucrative state contracts.

"If it’s a deal breaker, so be it ... but fortunately for now, it’s not," said Rafidah.

 source: AFP