KL not to follow S'pore in pursuing trade pacts

KL not to follow S'pore in pursuing trade pacts

Malaysia will not follow Singapore's lead in forging bilateral free trade agreements because it supports gradual multilateral trade liberalization under world trade rules, a report on Friday quoted a senior minister saying in Kuala Lumpur.

Singapore became the first Asian country to sign a free trade agreement (FTA) with the United States on Tuesday, kicking off a sweeping liberalization of bilateral trade in goods and services.

The deal is expected to boost Singapore's status as the main center for U.S. business in Southeast Asia's market of more than 500 million people.

Malaysian Trade Minister Rafidah Aziz was quoted by the New Straits Times as saying Singapore's move was understandable as it wanted to be a regional hub for services.

But Malaysia will not emulate its neighbor because its financial services industry already has high foreign participation and it will not further open its market until it is ready, she said.

"Malaysia will not follow Singapore's footsteps in signing FTAs with our trading partners and we will not open up our services sector in one go. It will only be liberalized in stages," Rafidah said.

"There will be no bilateral pacts in services, especially in the financial sector because what is being offered under the World Trade Organization rules is sufficient."

Since Singapore was ejected from the Malaysian Federation in 1965, the two have become economic rivals, with fast- industrializing and resource-rich Malaysia steadily closing the wealth gap with the island.

Singapore, with just four million people, is the most prosperous but also the most trade-dependent among the 10 members of the Association of Southeast Asian Nations (ASEAN), which has created a regional free trade area. -- AFP