Japan, Malaysia begin new FTA talks

Japan, Malaysia begin new FTA talks

Sean Yoong, Associated Press/Putrajaya, Malaysia

Japan and Malaysia began a new round of negotiations on Tuesday
to narrow differences in a planned free trade agreement which
they hope to draft before the Malaysian prime minister's visit to
Tokyo this month.

Since launching the FTA talks in January last year, the two
countries have reached a basic accord on agricultural and marine
products but failed to reach a consensus on industrial products,
especially the sensitive auto sector and the steel industry.

Japanese and Malaysian officials did not speak to reporters at
the start of the two-day talks.

However, in Tokyo, Economy, Trade and Industry Minister
Shoichi Nakagawa told a news conference on Tuesday that the
"talks have almost reached a conclusion ... but we face
difficulties in the final phase," according to Japan's Kyodo news
agency.

"There has been a growing momentum between the two countries
to strike an accord by the end of this month. I don't want to
lose this chance," he was quoted as saying, adding that he will
visit Malaysia if necessary to push the talks to a conclusion.

The two countries hope to prepare a basic agreement by May 25,
when Malaysian Prime Minister Abdullah Ahmad Badawi visits Japan.
They are aiming to formally sign the FTA in December.

Kyodo said one of the sticking points is Malaysia's tentative
pledge to fully eliminate tariffs on imported vehicles by 2015.
Japan wants an earlier deadline.

Malaysia imposes high import and excise duties on imported
cars to protect its national Proton car from competition. Proton
has a 67 percent market share in Malaysia, Southeast Asia's
biggest passenger car market. Tariffs have recently been lowered
for cars produced in Southeast Asian countries but other
countries still face high barriers.

Kyodo said Japan also wants Malaysia to abolish tariffs on
steel products used for vehicles and household appliances. It
quoted unidentified Japanese government sources as saying that
Malaysia is considering an immediate removal of tariffs for some
car models that do not compete with Proton and another local
company, Perodua.

The two countries are also expected to discuss the
liberalization of investment and services trade during the talks,
Kyodo said.