US sees ’solid basis’ for Malaysia trade talks
Daily Times (Pakistan)
7 January 2007
US sees ‘solid basis’ for Malaysia trade talks
WASHINGTON: Malaysia’s initial offer to open its market to more US farm and manufactured goods sets the stage for progress next week on a proposed free trade pact, a US trade official said on Friday.
“We exchanged initial market access offers in goods and agriculture in December. The Malaysian initial offers provided a solid basis for negotiation,” said Steve Norton, a spokesman for the US Trade Representative’s office.
The two countries are holding their fourth round of talks on the proposed agreement beginning on Monday in San Francisco.
The moderate majority-Muslim country is the 10th largest US trading partner and a rapidly industrializing country. However, US companies face an average tariff rate of 8.1 percent on exports to Malaysia and even higher duties on farm products such as rice, flour, beef, pork and prepared foods.
The Bush administration needs to reach a deal by late March in order to submit it to Congress before key legislation known as trade promotion authority expires in June. The two countries had hoped to finish by late 2006, but the talks fell behind schedule in part because Malaysia switched its lead negotiator after the second round.
Malaysia also has resisted US demands to include protections for workers in the trade pact putting it at odds with the new Democratic-controlled Congress, which is unlikely to approve any pact lacking strong labor provisions. Jeff Vogt, a global economic policy specialist with the AFL-CIO labor federation, said he has been assured that US trade officials have told Malaysia it is unrealistic to expect that labor be excluded from the pact. “I think they know an FTA (free trade agreement) would be doomed here without a labor chapter,” Vogt said. Norton confirmed that the US government was pressing the Malaysians on the issue. “Malaysia is fully aware that we cannot conclude the FTA without inclusion of a labor chapter,” Norton said. Other difficult issues have been Malaysia’s reluctance to relinquish state control of its car industry and to drop a ban on foreign investors taking majority ownership of banks.
The United States also wants Malaysia to open its government procurement procedures, which are currently designed to help ethnic Malays under affirmative action policies. reuters
