Malaysia and Us Free Trade Agreement

The Malaysia-United States Free Trade Agreement is a draft treaty between Malaysia and the United States of America. The treaty aims to mutually liberalize markets for the parties to the agreement and promote direct trade between the two countries. At the time of the proposal in 2005, the United States was Malaysia`s largest trading partner, while Malaysia is the United States` 10th largest trading partner. [1] Negotiations began in June 2005. [2] For a more general discussion of the potential trade impact of free trade agreements, see CRS report RL31356, Free Trade Agreements: Impact on U.S. Trade and Implications for U.S. Trade Policy, by [Adjusted author`s name]. Another negative sign of the state of play of the negotiations was the lack of a decision on the date and place of the next round of talks. The U.S. said there was agreement on “next steps” – communicating on a range of issues that have not yet been resolved and setting dates for the next round of talks.27 However, Minister Rafidah reportedly said of the status of the negotiations: “Whatever issues can be resolved first, they have been clarified. We don`t need to see each other again.

28 The U.S. Trade Representative sends a letter to the Ways and Means Committee in which he reports on the intention to open negotiations on a free trade agreement between the United States and Malaysia. Areas of particular interest to U.S. exporters include the removal of malaysian trade barriers for automobiles and certain agricultural products, provisions to enforce intellectual property rights, and wider access to Malaysia`s services sectors such as financial services, telecommunications, and professional services. Several rounds were held to discuss issues that proved to be sensitive for both sides. The United States was working on an agreement before the trade promotion authority expired in July 2007; TPA is a power given by the U.S. Congress to the U.S. president to accelerate free trade negotiations between the U.S.

and foreign states. Despite the delays, the U.S. and Malaysian sides have not been able to move forward and negotiations have therefore not yet been concluded. The “FTA Malaysia” website is www.ftamalaysia.org/ a link to information provided by groups, organizations and individuals opposed to the United States-Malaysia Free Trade Agreement. The U.S. Trade Representative announces and informs Congress of the Bush administration`s intention to negotiate a free trade agreement between the United States and Malaysia. However, the government has begun to dismantle some of its safeguard measures to meet its obligations under the WTO and the ASEAN Free Trade Agreement. In January 2004, the government completely abolished local share requirements that were inconsistent with its WTO obligations, but government policies (particularly excise duties on automobiles) continue to block open trade in the automotive sector. Malaysia imposes tariffs of 30% on assembled vehicles from outside the ASEAN region and up to 10% on fully reduced vehicle combinations. Excise duties on assembled vehicles and kits are 80-200% on automobiles, 55-160% on multi-purpose vehicles, and 20-50% on motorcycles.56 Malaysia has long protected its automotive industry from foreign competition through high tariffs and non-tariff barriers to trade. Government policy also distinguishes between national cars (i.e.

manufactured by domestic manufacturers such as Proton and Perodua) and non-national cars, which include most vehicles manufactured in Malaysia by non-Malaysian companies. Companies that produce national cars, for example, benefit from a 50% reduction on their excise duties. Bumiputera are also preferred when it comes to obtaining permits for the import or distribution of motor vehicles. Over the past three years, several issues have emerged as difficult issues in the negotiations. Key issues that still need to be resolved include intellectual property rights (IPR) protection, market access for U.S. automobiles and agricultural products in Malaysia, trade in services, and government procurement policy. Assessments of the outcome of the seventh round of talks were mixed. A message from China said four key topics were discussed during the talks: investment, trade in goods and services, intellectual property rights and “legal issues.” 20 According to Xinhua, the United States hoped to “conclude its free trade agreement with Malaysia by this summer.” 21 The Staff Committee on Trade Policy announces that the United States The Trade Representative and the Department of Labor are launching a review of the impact of a proposed U.S.-Malaysia Free Trade Agreement on U.S. employment, including labour markets. On December 30, 2007, U.S.

Deputy Trade Representative Barbara Weisel confirmed that “the United States remains committed to finalizing the agreement by this summer, which we believe is achievable.” 16 Weisel also said the Bush administration would seek an “appropriate instrument” to obtain congressional approval for the proposed free trade agreement once negotiations were concluded. [17] In January 2009, the Minister of International Trade and Industry, Muhyiddin Yassin, announced that negotiations on a free trade agreement had been temporarily suspended. [3] This action was carried out as a protest against US support for an Israeli invasion of Gaza, but he had not yet officially informed the cabinet. He had been persuaded by the Prime Minister to inform the Cabinet of his decision. [4] Free Trade Agreement negotiations were again a controversial topic in Malaysia in 2008. At an ad hoc meeting of senior government officials, he reiterated his support for further negotiations on a free trade agreement on certain issues, including government procurement, competition policy, intellectual property rights and working conditions.6 However, some issues – such as rice imports – remained off the table. In addition, the U.S. financial crisis in Malaysia appears to have raised some concerns about discussions about opening Malaysian financial markets to U.S.

companies. Malaysia has a diverse democracy and is an important partner in U.S. engagement in Southeast Asia. The two countries work closely together on security issues, including counter-terrorism, maritime awareness and regional stability, and often participate in bilateral and multilateral trainings, exercises and visits. Economic relations are strong and there is a long history of people-to-people exchanges. Despite the current relatively low volume of services trade with Malaysia, several US service sectors – including telecommunications, financial services and insurance providers – have expressed strong interest in improving access to the Malaysian single market. There have been some clues from the Obama administration about its intentions regarding the U.S.-Malaysian negotiations on a free trade agreement. .