U.S., Malaysia set pace for free trade pact

U.S., Malaysia set pace for free trade pact

Agence France-Presse
Washington

The United States and Malaysia signed an agreement on Monday
setting up a special forum to address trade issues, Washington's
fifth such pact with export-driven Southeast Asian nations.

U.S. Trade Representative Robert Zoellick and Malaysia's
Minister of International Trade and Industry Rafidah Aziz signed
the Trade and Investment Framework Agreement (TIFA), which could
lead to a bilateral free trade pact.

The TIFA provides for the creation of a joint council to
expand and liberalize trade and investment, including tackling
trade barriers and other issues seen hampering free trade.

Aside from Malaysia, the United States has TIFAs with four
other members of the Association of Southeast Asian Nations
(ASEAN) -- Indonesia, the Philippines, Thailand and Brunei.

The other ASEAN members are Cambodia, Laos, Myanmar, Singapore
and Vietnam.

Washington has already signed a free trade agreement with
Singapore and is discussing one with Thailand.

"We look forward to working closely with Malaysia to further
strengthen our economic relationship bilaterally and within
ASEAN," Zoellick said. "This TIFA provides a useful forum to
discuss ways to address bilateral trade issues."

He said the United States wanted to enhance trade with
resource-rich Malaysia, which was seeking to diversify its
rapidly-growing economy.

Malaysia is the 10th largest trading partner of the United
States.

On the other hand, the United States is the largest single
market for Malaysia.

Their political ties however are not as cosy as in the
business and trade fields. Predominantly-Muslim Malaysia has been
a sharp critic of the U.S.-led invasion of Iraq and has attacked
Washington for its policy on the Israel-Palestine conflict.

Among areas that the two countries would look into under the
trade agreement are intellectual property, information and
communications technology, biotechnology policy, tourism and
boosting small- and medium-sized enterprises.

"TIFAs can help focus attention on trade issues which often
includes barriers that the U.S. faces, and, therefore, can help
expand U.S. access," a statement from Zoellick's office said.

Rafidah said the agreement "could be a precursor" to a
bilateral free trade agreement.

"I am sure as we go on, we find that it will be advisable,
perhaps for both sides to have studies on our own to see what
areas we can make concessions to each other that can become the
substance for a free trade area," she said.

The TIFA is a result of U.S. President George W. Bush's
"Enterprise for ASEAN Initiative" launched in October last year
to woo ASEAN states to sign free trade agreements with the United
States.

Rafidah said the private sectors of both countries would
benefit from the agreement as there would now be a formal
mechanism where the governments could discuss trade issues at the
ministerial level.

She said the joint council could devise plans for the
protection of intellectual property rights.

Malaysia was initially reluctant to forge bilateral FTAs,
fearing it could undermine the 10-member ASEAN Free Trade Area
(AFTA) but the country did not want to be left out as other ASEAN
member states signed such agreements with key trading partners.