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Malaysia-US FTA talks to resume on January 14

TWN FTA Info | 03 January 2008

Dear Friends and Colleagues,

RE: Malaysia-US FTA Talks to Resume on January 14

Formal negotiations between Malaysia and the US are said to be scheduled to resume during the week of January 14 in Kuala Lumpur, according to Barbara Weisel, the US chief negotiator, adding that the US hopes to reach an agreement by the middle of the year.

The last round (the fifth) between the two countries ended in a deadlock in February last year and informal discussions were said to have taken place since then.

In the following report, Weisel merely repeats the alleged advantages for Malaysia in signing a comprehensive FTA but the detailed concerns raised by civil society groups remain unanswered. The contentious issues that resulted in the February 2007 deadlock remain the same - fundamental changes to Malaysia’s socio-economic priorities and policies will be required which, given the analysis of other developing countries’ FTAs with the US, would leave Malaysia as the net loser.

Best wishes,

Third World Network
2-1, Jalan 31/70A
Desa Sri Hartamas
50480 Kuala Lumpur

Tel: +603-2300 2585
Fax: +603-2300 2595
email: [email protected]

US wants strong, balanced FTA with Malaysia

By Rupa Damodaran, 2007/12/30
Business Times

THE US will seek an "appropriate vehicle" to obtain legislative approval for the bilateral free trade agreement (FTA) with Malaysia once it is concluded, said Barbara Weisel, its chief negotiator for the on-going FTA talks.

"Our first priority is to conclude a strong, balanced agreement. Once an agreement is within reach, the US will seek an appropriate vehicle to obtain legislative approval," she said.

Weisel is also Assistant US Trade Representative for Southeast Asia.

"Given the solid support for the FTA when it was launched last year (2006), we are confident that a strong, comprehensive agreement with Malaysia will garner broad support in the Congress and the Malaysian parliament," she said.

Formal negotiations are scheduled to resume during the week of January 14 after the fifth round between both parties faced a deadlock in March and the Malaysian side said it needed to refer the contentious issues to the Cabinet.

"The US continues to seek to conclude the agreement by this summer, which we believe is achievable, but significant work remains ahead," she said in response to queries raised by the Business Times.

"We hope to make significant progress on several chapters during the round in Kuala Lumpur in January," she added.

The negotiating team missed the March 31 deadline to submit the agreement for fast-track approval from Capitol Hill and for the US, the current Trade Promotion Authority (TPA) granted to negotiate FTAs expired in June.

Government procurement and Malaysia’s affirmative actions policies are among the sticky issues on the table, apart from Malaysia’s affirmative actions policies, and Weisel said both sides have had detailed discussions on both issues.

"As it has in all of our previous FTAs, the US is seeking substantial market access across all services sectors, including financial services, and to ensure transparency and reciprocal market access in government procurement.

"We have made clear that we fully recognise Malaysia’s sensitivities in these areas and are prepared to work with the Malaysian team to find creative and mutually-acceptable ways to address them. However, the two sides must engage in detail on these issues over the next few months to be able to conclude by next summer," she said.

Consumer groups in Malaysia have continued to question whether the FTA reflected fair trade as it would have socio-economic impacts to the country once the agreement is inked. There were also fears of farmers being adversely impacted by US rice imports.

"The US and Malaysia are seeking to negotiate a balanced agreement that will broaden and deepen trade and investment relations between the two countries and benefit both sides," she stressed.

By locking in preferential treatment with its most important economic partner, the FTA will create substantial opportunities for Malaysian companies to boost and diversify their exports to the US and generate new, higher-paying jobs for Malaysian workers.

"At the same time, the FTA would enhance Malaysia’s attractiveness as an investment destination at a time when the competition for foreign investment in Asia continues to intensify."

Weisel added that the liberalisation of its services sector under the FTA would allow Malaysian companies to provide goods and services to customers more quickly and efficiently and to develop state-of-the-art telecommunications, financial services, express delivery, computer, energy, and distribution, and other services.

"These reforms will help make other Malaysian businesses that rely on these services more productive and competitive regionally and globally."

Also, the negotiation of reciprocal access in government procurement under the FTA will open the US$250 billion (RM830 billion) US government procurement to Malaysian companies, many of which are highly competitive in products that the US government procures, she added.