Malaysia urges US to drop contentious issues from free trade talks

The Associated Press | May 21, 2008

Malaysia urges US to drop contentious issues from free trade talks

KUALA LUMPUR, Malaysia: Malaysia urged the United States on Wednesday to drop contentious issues from their free trade talks so that a deal can be forged.

Negotiations have been bogged down mainly by a dispute over the Malaysian government’s "procurement policy," which involves how state contracts are awarded.

International Trade Minister Muhyiddin Yassin said Malaysia is adamant about excluding the issue of government procurement and competition policy from a deal and will also not compromise on other matters linked to labor, environment and financial services.

State contracts are mostly awarded to Malaysia’s ethnic Malay majority under an affirmative action program to help them compete with the wealthier Chinese minority.

The policy has kept foreign companies from bidding for state contracts, and Washington says it wants more transparency.

Muhyiddin said Malaysian officials may hold informal discussions to explain their stance "so that the U.S. can understand us better and maybe lower their ambition."

"While we want to see this move forward, there are issues ... with regards to sovereignty and national interests which we won’t compromise," Muhyiddin said.

The next round of formal talks - which began in 2006 - is expected to be held in July, Muhyiddin said, adding that he could not predict whether an agreement can be reached this year before a new U.S. administration takes over.

If the trade pact is signed, officials say bilateral trade between Malaysia and the United States would double by 2010 from US$44 billion in 2005.

source : IHT

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