Here are the latest news on Malayisa-USA FTA

31/01: US:FTA pact with Malaysia could flop
Category: General
Posted by: Raja Petra
By Eileen NgAssociated Press Writer(AP) -- A proposed Malaysia-U.S. free trade pact may falter if negotiators fail to make firm progress in bridging differences at a fifth round of talks next week, a U.S. official warned on Wednesday.Negotiators will meet again for a week starting Monday in Malaysia's Sabah state on Borneo island, where they will seek a compromise over opening up of Malaysia's services and government contracts -- two key hurdles to a deal -- said Deputy U.S. Trade Representative Karan Bhatia.Labor and environmental issues are also holding up talks, he said."This is a major window of opportunity we have here in the fifth round," Bhatia, who arrived Monday for a three-day visit, told reporters."If we were not to see significant progress, if we were not to see the two sides moving together toward a closure, I think it will be very difficult to see how then it can happen in the time remaining," he said.Negotiators are under time pressure because the U.S. wants to get a Congressional vote on the pact before President George W. Bush's special "fast-track" trade authority expires on July 1. That allows him to submit a deal to Congress for a straight up-or-down vote without amendments.But the proposed trade agreement must wrap up by end of March so U.S. lawmakers have time to review it before a vote.Malaysia is the United States' 10th-largest trading partner, with US$44 billion (euro35 billion) in two-way trade in 2005. Officials say that figure will double by 2010 if the pact is signed.Bhatia said he is "more optimistic" that a deal can be reached after meeting several Malaysian government ministers this week.He said that the U.S. is not seeking to "undo or undermine" Malaysia's policy of awarding government tenders to ethnic Malay-owned companies, but that Washington wants more clarity and transparency in bidding for government contracts that are open to foreign firms.Malaysia has said it will not budge on the policy, mandated by a 1970 preferential program that gives housing, contracts and job privileges to help Malays economically, and has shut out local non-Malay companies and foreign firms from bidding for a large chunk of government tenders.Malays make up about 60 percent of Malaysia's 26 million people. Ethnic Chinese account for a quarter, and ethnic Indians about 10 percent."We've heard the Malaysian government clearly, but there are some concerns that need to be addressed in the broader tendering areas," Bhatia said. "I think the two are reconcilable."He dismissed concerns that Malaysian companies would be gobbled up by bigger U.S. rivals if the country's services sector is liberalized. He said U.S. firms often partner with local companies in ventures abroad and help them grow and become more competitive.Malaysian Trade Minister Rafidah Aziz said earlier this month that the pact is unlikely to be concluded in time to meet the July 1 deadline, due to the two sides' differences.Bhatia said that Rafidah met with U.S. Trade Representative Susan Schwab on the sidelines of the World Economic Forum in Davos last week, and that both of them had recommitted to conclude talks by end of March."We have done enough work to bring this (deal) to a closure, but it's going to require political determination," he said. "If there is no substantive progress in the fifth round, both sides need to do stocktaking on how best to proceed."If talks founder, he warned it could drive investors away and "breed frustration" in their bilateral economic ties.


31/01: Malaysia's fear over FTA impact on rice industry unfounded - US official
Category: General
Posted by: Raja Petra
www.afxnews.comHe said this is because Malaysia and US produce different types of rice. ''I think there has been a misundertanding over this. Malaysia produces the longer grain type of rice which is different from the type produced by the US,'' Bhatia said. ''We are not in competition with Malaysia in the rice market,'' he added. Recently, farmers, activists and opposition parties demanded a halt to US-Malaysia FTA negotiations which they say will damage the livelihoods of rice farmers. The Coalition Against the US-Malaysia FTA delivered a memorandum to Prime Minister Abdullah Ahmad Badawi calling on him to intervene, arguing that a possible reduction of import tariffs on US farm produce under the FTA would harm Malaysia's rice farmers. Meanwhile, Bhatia said concerns that US goods would ''swamp the local market'' in other sectors once the FTA is implemented are also without basis. ''Our experience with FTA members has not played out that way. On the contrary, member countries have become more efficient,'' Bhatia pointed out.


31/01: U.S. says free-trade failure bad for U.S., Malaysia
Category: General
Posted by: Raja Petra
(Reuters) - The United States assured Malaysia on Wednesday it was not trying to dismantle the Asian country's affirmative-action policies that favor ethnic Malays as part of the countries' free-trade negotiations.But the United States was seeking greater transparency in Malaysia's government procurement to try to reach a free-trade agreement (FTA), Deputy U.S. Trade Representative Karan Bhatia told a news conference in Kuala Lumpur.The majority of Malaysia's population are ethnic Malays. They provide the bedrock of the ruling party's hold on power and a large share of government contracts are reserved for them.Any move by Malaysia to open up procurement contracts to greater competition could be seen by ethnic Malays as relaxing the policies that are supposed to promote their prosperity.The United States and Malaysia have been locked in free-trade talks since June 2006, but Washington's fast-track authority to make deals with minimal Congressional interference runs out on July 1, increasing the pressure for both countries to conclude a deal."While I want to contemplate success and be focusing on that, I think it is important to point out here that if we are not successful, if the FTA does not come together, there would be costs associated with that," Bhatia said."Not just the losses of all the benefits that we have listed, but it would also send an unfortunate message that our countries are not open for business," he said.The fast-track authority allows President George W. Bush to negotiate trade agreements that Congress can only approve or reject, but not change.Malaysia's trade minister, Rafidah Aziz, has expressed doubts over whether the talks with Washington can be wrapped by July.Bhatia said the United States was sensitive to the country's policy to help ethnic Malays, known collectively as Bumiputras."Let me address a myth, which is that somehow in this FTA we seek to undo Malaysia's social policies, in particular with respect to Bumi preferences," Bhatia said."If I can leave you with one thing today, let me leave you with a clear sense that that is not our intention. We do not seek to undo or undermine Malaysian Bumi preference policies."Instead, the U.S. government is seeking more transparency in Malaysian government procurement and to be able to compete with other international companies on a level playing field," he said.The two countries had two-way trade in 2005 of $44 billion. The United States is Malaysia's biggest trading partner and foreign investor, while the southeast Asian country is the United States' 10th-largest trading partner.The United States has barred Malaysia from a potential $250 billion in government procurement of goods and services, including $20 billion in electronics and information-technology products. Electronics are Malaysia's main export.