Malaysia hopeful on U.S. free trade talks

Malaysia hopeful on U.S. free trade talks

Agence France-Presse, Kuala Lumpur

Malaysia expects to sign a pact with the United States soon to kickstart possible free trade agreement (FTA) talks and will pursue other bilateral FTAs to boost market access and spur trade, Trade Minister Rafidah Aziz said on Monday.

Rafidah said she hoped to sign a trade and investment facilitation agreement (TIFA), which will form the framework for possible FTA talks with the United States during an upcoming visit to Washington.

Officials said her trip is scheduled for next month.

Malaysia is also negotiating on a closer economic partnership (CEP) with Japan, which will include an FTA expected to be realized within 10 years, she was quoted as saying by Bernama news agency during the ministry's annual dialogue with trade associations.

Rafidah said FTAs would improve market access for the countries involved and were a test of competitiveness for local companies.

"An open economy such as Malaysia dictates that we must be active participants in the process to protect our interest and benefit from any arrangements," she said.

"While our choice of FTA partners and the preferential treatments agreed to will be based upon both immediate and long- term benefits to the country, as a whole, the industry must be prepared for the competition that will be brought on by the liberalization process."

Malaysia's share of global exports surged from 0.64 percent or 49.3 billion ringgit (US$13 billion) in 1980 to eight percent valued at 398.90 billion ringgit last year, she added.

Malaysia was initially concerned that bilateral FTAs could undermine the 10-member Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA), but officials said the country did not want to be left out of the race as economic rivals went ahead.

Singapore already has a slew of such accords with the U.S., Japan, Australia, New Zealand and the European Free Trade Association while Thailand is to start negotiations with the U.S. and is forging pacts with Australia, China, India, Japan and New Zealand.

Trade between the U.S. and ASEAN totaled more than $120 billion last year, with the region buying $40-$50 billion worth of goods and services. U.S. companies invested $88 billion in ASEAN last year, more than the money they poured into China, Mexico, Brazil and Japan.