M’sia, US launch FTA negotiations
Bernama, Malaysia
M’sia, US Launch FTA Negotiations
9 March 2006
KUALA LUMPUR, March 9 (Bernama) — Malaysia and the US today jointly announced the launch of negotiations for free trade agreement (FTA), with formal negotiations on the FTA commencing in three months and expected to be completed by early 2007.
The Ministry of International Trade and Industry (MITI) said that the joint announcement was made by its minister Datuk Seri Rafidah Aziz and US Trade Representative Rob Portman in Washington on Wednesday.
The launching of the FTA negotiations would provide an opportunity to both countries to further strengthen bilateral trade and investment relations, MITI said in a statement issued here Wednesday.
It said that Malaysia had on May 10, 2004 signed the Trade and Investment Framework Agreement (TIFA) which provides opportunities to both countries to address bilateral trade and investment issues, and has laid the foundation for the launching of the FTA negotiations.
MITI said that three meetings of the Joint Council on Trade and Investment have been convened as provided for under TIFA.
The Malaysia-US FTA negotiations is expected to focus mainly on liberalisation of trade in goods, services and investment, including flexibilities and longer phase-in period for sensitive sectors.
It would promote and facilitate trade and investment flows and cooperation activities to address impediments to trade in the areas of Intellectual Property Rights, Standards and Conformance and development of Mutual Recognition Arrangements.
It would also look at collaboration to enhance competitiveness in specific sectors such as tertiary education, healthcare and tourism as well as capacity building and technical assistance in the development of Malaysian small medium enterprises (SMEs).
The US is Malaysia’s single largest trading partner while Malaysia is the 10th largest trading partner for the US.
In 2005, trade with US was valued at RM160.9 billion (US$42.5 billion), and accounted for 16.8 percent of Malaysia’s global trade.
The US is Malaysia’s largest export destination, with total exports valued at RM105 billion (US$27.7 billion) or 19.7 percent of Malaysia’s global exports in 2005.
Malaysia’s major exports to the US were office machines; electrical machines, appliances and parts; telecommunication and sound recording equipment; articles of apparel; and furniture and parts.
In terms of imports, the US is Malaysia’s second largest source of imports in 2005, with total imports valued at RM55.9 billion (US$14.8 billion). Imports from the US comprised mainly of manufactured goods including electrical machines, appliances and parts; office machines; scientific equipment and apparatus; power generating machinery; and transport equipment.
As for investments, US remains an important source of foreign direct investment in the manufacturing sector in Malaysia.
In 2005, the US was the largest source of foreign direct investments with total investments amounting to RM5.155.0 billion (US$1.4 billion), and representing 29 percent of total approved foreign direct investments in the manufacturing sector.
US investments for that period were concentrated mainly in petroleum products; electrical and electronics products; fabricated metal products; transport equipment; and machinery manufacturing.
US companies in Malaysia are also active in establishing research and development (R&D) centres and expanding and diversifying into the manufacture of high value-added and high technology products.
