Malaysia-US Free Trade Agreement

The Malaysia-US Free Trade Agreement is a proposed treaty between Malaysia and the United States of America. The treaty aims to liberalize each other markets to parties of the agreement and directly encourage trade between the two countries. As of 2005, the US is Malaysia's largest trading partner while Malaysia is the 10th largest trading partner for the US. [ [http://www.fmm.org.my/p_ne_it.asp?NewsID=968 FMM Supports Malaysia-USA Free Trade Agreement] Federation of Malaysian Manufacturers. June 15 2005.] Negotiation began in June 2005. [http://www.ustr.gov/assets/Document_Library/Reports_Publications/2007/2007_NTE_Report/asset_upload_file760_10963.pdf Acknowledgements ] ]

The Malaysian delegation was led by the former Minister of International Trade and Industry, Rafidah Abdul Aziz and the US delegation was led by United States Trade Representative Rob Portman and his deputy Ambassador Karan K. Bhatia.

Issues

Several rounds were held to discuss matters that proved to be sticky for both sides. The US was working to achieve an agreement before the Trade Promotion Authority lapsed in July 2007; the TPA is an authority granted by the US Congress to the US President to fast track free trade negotiations between the US and foreign states. Despite the deadlines, both the US and the Malaysian sides were unable to move forward and hence, negotiation is still ongoing.

The issues affecting the negotiation are high tariffs imposed on imported US goods compared to imported Malaysian goods, restriction of import of motor vehicles into Malaysia, government procurement based on New Economic Policy which favors the local Malays, export subsidies, intellectual property rights, pharmaceutical, barriers in various services, investment requirements which is again related to the NEP and transparency in governance.

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