13 June 2006

Malaysia says cautious on US trade deal

KUALA LUMPUR (AFP) — Malaysia said it was proceeding cautiously with negotiations for a free-trade deal with the United States which began this week, and would not act against the national interest.

Deputy International Trade and Industry Minister Ng Lip Yong dismissed protests by an alliance that includes consumer groups and health activists, and said Malaysia would not sell itself short.

"We are not going to give up our sovereignty as some of them claimed. In any negotiations, we must start somewhere and then we try to match with each other. But we are very cautious, we know that there is a lot of important issues involved," he told the official Bernama news agency.

"It is not like we just go in and just sign everything on the table... it is not like that," he said.

Ng said the government had consulted widely with the private sector before the start of the negotiations, which the US wants to "fast track" and complete by the end of the year.

"There are examples of some other countries which had signed the FTA and their trade increased tremendously. We must understand the whole procedures on how the FTA is negotiated," he said.

The United States delegation signalled on Monday that it would press for concessions in Malaysia’s protected automotive industry and the finance sector, and push for more transparency in government procurement procedures.

US assistant trade representative for the Asia-Pacific Barbara Weisel said that despite the sensitive issues on the agenda, she was hopeful of wrapping up the negotiations by the end of the year.

The US is rushing to complete the pact before July 1 next year when the Congress will regain the right to amend any pact negotiated by the reigning administration.

Analysts have welcomed the talks as a positive step for Malaysia’s economy that will help it attract more direct investment from the United States, its 10th biggest trading partner.

However, activists and consumer groups say that an FTA could undermine job and food security and the nation’s economy.