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Malaysia-US FTA Talks, July 14-18, 2008, in Washington DC, USA

Online Publication Date: 20 July 2008

Malaysia and the US will resume formal negotiations on an FTA in Washington from July 14-18, 2008. The last round was held in January in Malaysia but since then both sides have continued discussions via video-conferencing. (Items 1)

Among the issues that have bogged down the talks were US’ intention to include government procurement and competition policy and the linking of labour issues with environmental standards and dispute settlement. Other unresolved issues were the liberalization of the services sector including that of financial services. (Item 2)

According to a US official, the impending change in the US leadership is unlikely to affect the US’ push to conclude an FTA with Malaysia. (Item 3) Malaysia, meanwhile said issues related to the New Economic Policy and Bumiputera agenda are not up for discussion. (Item 4)

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Item 1

Malaysia-US trade talks resume July 14 - official
06.24.08, 6:31 AM ET

KUALA LUMPUR (Thomson Financial) - Malaysia and the United States will begin their next round of talks on a free-trade deal on July 14, a minister said Tuesday.

The talks come after Malaysia indicated last month it would not compromise on the agricultural sector. The talks will be held in the United States from July 14-18, deputy international trade minister Liew Vui Keong said.

'The meeting is aimed at solving several issues that have yet to be resolved,' he said, according to state news agency Bernama.
The negotiations, which began in March 2006, reached an impasse at the seventh round in January.

Critics fear an agreement would leave Malaysia in a unfavourable trading position.

Malaysia's list of sensitive areas -- including environmental protection and the practice of giving Malay companies a leg-up in lucrative government contracts -- have bogged down the talks.



Item 2

Liew: No details of FTA talks yet

By Kevin Tan, The Edge, 25 June 2008

KUALA LUMPUR: The government cannot openly reveal the details of its free trade talks with the US as it can potentially undermine the position of Malaysia’s negotiators, said Deputy Minister of International Trade and Industry Datuk Liew Vun Keong.

“Since the end of the 7th round of negotiations in January, the talks are still ongoing via video-conferencing between both sides. There are still several technical conditions under discussion and matters that require cabinet decisions,” he said in the Dewan Rakyat yesterday.

Liew was responding to a question on the proposed free trade agreement (FTA) between Malaysia and the US submitted by several members of parliament yesterday.

He also assured the Dewan Rakyat that MPs would be kept updated on the issues negotiated and the government’s stand.
Liew explained that the unresolved issues in the talks were US’ intention to include government procurement and competition policy in the talks and the linking of labour issues with environmental standards and dispute settlement.

Other unresolved issues were the different approaches by both countries to liberalise the services sector and the US’ demand for the liberalisation of the financial services sub-sector, he said.
Meanwhile, Deputy Tourism Minister Datuk Seri Sulaiman Abdul Rahman Taib revealed that the government spent RM40 million for overseas promotion last year.

From its promotional activities, the returns from tourist receipts increased by 27% to RM46.07 billion last year from RM36.27 billion previously, he said.

“Overseas spending included the fee to participate in exhibitions, preparing for exhibition space or booth, delivery of promotion materials and sending dancers and chefs for cultural and food promotion,” Sulaiman said.

Among the activities conducted overseas were sales mission, tourism seminar, food and cultural promotion, advertisement and joint promotion with tour agencies and tourism exhibition, he added.


Item 3

Change in US leadership 'will not affect FTA talks'

By Rupa Damodaran, Business Times, 30 June 2008

A CHANGE in the US administration is unlikely to affect talks to establish free trade ties between Malaysia and the US, a US Commerce Department official said.

This year, Americans will pick a new president to succeed George W. Bush.

Talks on a free trade agreement (FTA) will enter its eighth round when they resume in Washington in July.

The US assistant secretary for trade promotion and director general of the US and Foreign Commercial Service Israel Hernandez expects it to be fruitful.
"The fact that Malaysia asked for this round is a signal that they are taking it seriously. They are making sure that they address the issues that they had a clear understanding how to move forward in some," he said, in an interview with the Business Times in Kuala Lumpur.

The three-day talks will focus on a few important issues.

Hernandez is accountable to the US Congress for a number of mission-critical program-mes and initiatives.

He is in town to meet senior officials from the International Trade and Industry Ministry.

"When this is concluded, it will be a great benefit because of the amount of investments that will come (on board) with the FTA, the diversity of exports and manufacturing that can come with it and the ability to deepen our economic relations as we move forward."
However, negotiations have taken a long time due to issues surrounding Malaysia's affirmative action policy and its policy on companies that can bid for government contracts.

Hernandez said the FTA allows a huge growth opportunity for small and medium enterprises (SMEs).

"It is important for people to understand that the biggest group that benefits the most from the FTA is the development and opportunity growth for SME companies."

The US' foreign commercial service was created by the Congress to assist SMEs to export and to protect the business interests of American companies overseas. About 95 per cent of US exports come from SMEs.

Two-way trade is expected to more than double in five years with the FTA, which provides potential benefits across the spectrum - from manufacturing, agriculture, telecommunications to financial services.


Item 4


KUALA LUMPUR, June 24 (Bernama) -- The free trade agreement (FTA) negotiations between Malaysia and the United States are continuing though some issues remain to be resolved, Deputy International Trade and Industry Minister Datuk Liew Vui Keong said today.

He said the FTA negotiations are expected to resume next month from July 14 to 18.

"The coming discussions are aimed at resolving the various outstanding issues," he said at a question-and-answer session in the Dewan Rakyat in response to a question from Datuk Mukhriz Tun Dr Mahathir (BN-Jerlun).

Liew said since the last meeting in January this year, both parties continued to negotiate through videoconferencing and the technical terms were still being discussed.

Among the issues which remained unresolved was the
US insistence to include discussions on government procurement and competition policy, he said.

At present, he added,
Malaysia was sticking to its stand not to discuss the competition policy and those related to the New Economic Policy and Bumiputera agenda.



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