Agence France-Presse | 11 May 2004
US, Malaysia sign pact to set pace for free trade agreement
WASHINGTON : The United States and Malaysia have signed an agreement to set up a special forum to address trade issues, Washington’s fifth such pact with export-driven Southeast Asian nations.
US Trade Representative Robert Zoellick and Malaysia’s Minister of International Trade and Industry Rafidah Aziz signed the Trade and Investment Framework Agreement (TIFA), which could lead to a bilateral free trade pact.
The TIFA provides for the creation of a joint council to expand and liberalize trade and investment, including tackling trade barriers and other issues seen hampering free trade.
Aside from Malaysia, the United States has TIFAs with four other members of the Association of Southeast Asian Nations (ASEAN) — Indonesia, the Philippines, Thailand and Brunei.
The other ASEAN members are Cambodia, Laos, Myanmar, Singapore and Vietnam.
Washington has already signed a free trade agreement with Singapore and is discussing one with Thailand.
"We look forward to working closely with Malaysia to further strengthen our economic relationship bilaterally and within ASEAN," Zoellick said. "This TIFA provides a useful forum to discuss ways to address bilateral trade issues."
He said the United States wanted to enhance trade with resource-rich Malaysia, which was seeking to diversify its rapidly-growing economy.
Malaysia is the 10th largest trading partner of the United States.
On the other hand, the United States is the largest single market for Malaysia.
Their political ties however are not as cosy as in the business and trade fields. Predominantly-Muslim Malaysia has been a sharp critic of the US-led invasion of Iraq and has attacked Washington for its policy on the Israel-Palestinian conflict.
Among areas that the two countries would look into under the trade agreement are intellectual property, information and communications technology, biotechnology policy, tourism and boosting small- and medium-sized enterprises.
"TIFAs can help focus attention on trade issues which often include barriers that the US faces, and, therefore, can help expand US access," a statement from Zoellick’s office said.
Rafidah said the agreement "could be a precursor" to a bilateral free trade agreement.
"I am sure as we go on, we find that it will be advisable, perhaps for both sides to have studies on our own to see what areas we can make concessions to each other that can become the substance for a free trade area," she said.
The TIFA is a result of US President George W. Bush’s "Enterprise for ASEAN Initiative" launched in October last year to woo ASEAN states to sign free trade agreements with the United States.
Rafidah said the private sectors of both countries would benefit from the agreement as there would now be a formal mechanism where the governments could discuss trade issues at the ministerial level.
She said the joint council could devise plans for the protection of intellectual property rights.
Malaysia was initially reluctant to forge bilateral FTAs, fearing it could undermine the 10-member ASEAN Free Trade Area (AFTA) but the country did not want to be left out as other ASEAN member states signed such agreements with key trading partners.