US negotiator says more talks needed to reach FTA with Malaysia
January 12, 2007
U.S. negotiator says more talks needed to reach FTA with Malaysia
By EILEEN NG
The Associated Press
KUALA LUMPUR, Malaysia
The U.S. and Malaysia need at least two more rounds of negotiations to overcome obstacles and reach a free trade agreement, a top American trade negotiator said Friday.
Progress has been made in talks this week in San Francisco, with constructive discussions on sticky issues such as greater access to Malaysia’s protected financial services and auto sector, Barbara Weisel, who is leading the U.S. team, told reporters here via videoconference.
But both governments must find creative ways to resolve differences, she said.
Malaysia has still not decided if it will agree to loosen up its policy of awarding government tenders to ethnic Malay-owned companies under an affirmative action program, Weisel said. Labor and environmental issues are also holding up a deal, she said.
"We believe the progress we have made this week has put us within striking distance of concluding this agreement within the next few months," she said.
"But there are significant challenges ahead. We will work intercessionally and hopefully make progress in February. I think we will not conclude at the next round," she said. "I think we would need more than one more round."
The San Francisco talks, the fourth round of negotiations since they began last June, wind up Friday. Officials are to meet again in Malaysia next month.
Negotiators are under time pressure because the the U.S. side wants to bring a proposed pact to Washington by the end of March so that American lawmakers can review and vote on it before President George W. Bush’s authority to negotiate trade deals that require simple yea-or-nay Congressional approval expires end of June.
The U.S. is also aiming to wrap up a trade deal with South Korea by the end of March.
Malaysia is the United States’ 10th-largest trading partner, with $44 billion (euro35 billion) in two-way trade in 2005. Officials say that figure will double by 2010 if the pact is signed.
Malaysia has stressed it would not compromise in allocating government tenders to Malay businesses, which has shut out not only domestic non-Malay companies but also U.S. and other foreign firms from bidding for any government contracts.
The policy is mandated by a 1970 preferential program that gives special privileges in contracts, jobs and housing to Malays to help them close the gap with wealthier minority Chinese. Malays make up about 60 percent of the country’s 26 million people, Chinese account for a quarter and Indians about 10 percent.
Some Malaysians have opposed a free trade agreement with the U.S., fearing it would lead to job losses, erode workers’ rights and mark the end of cheap, generic drugs now available to those with HIV/AIDS and other diseases.
Rice farmers are also worried the import of duty-free U.S. rice under a deal will hurt their livelihood.
Malaysia’s Trade Minister Rafidah Aziz has allayed fears, saying that rice and tobacco two of the country’s key agricultural products were excluded from the pact to protect local farmers.
"We have never included rice and tobacco (in any FTAs). We only discussed products that we exported," she was quoted as saying by Friday’s Malay-language Utusan Malaysia.
Weisel said agricultural products from both countries are complementary, and not competing with each other.
She stressed an FTA would boost bilateral trade and investment, create higher paying jobs in both countries and enhance each other’s competitiveness globally.
Weisel dismissed concerns that the new Democratic-controlled U.S. Congress will be more hostile than the previous Republican one, saying a "strong agreement" will win approval.
