Malaysia - US Launch FTA Negotiations

Malaysia and the US jointly announced the launch of negotiations for free trade agreement (FTA), on March 8 with formal negotiations on the FTA commencing in three months after the expiry of a 90-day consultation period with the US Congress and expected to be completed by early 2007. 

US-Malaysia bilateral trade totaled US$44 billion (RM164 billion) in 2005 from which Malaysia had a trade surplus of US$34 billion (RM127 billion) and accounted for 16.8 percent of Malaysia's global trade. 

The US is Malaysia's largest export destination, with total exports valued at RM105 billion (US$27.7 billion) or 19.7 percent of Malaysia's global exports in 2005. 

In terms of imports, the US is Malaysia's second largest source of imports in 2005, with total imports valued at RM55.9 billion (US$14.8 billion).  

As for investments, US remain an important source of foreign direct investment in the manufacturing sector in Malaysia. In 2005, the US was the largest source of foreign direct investments with total investments amounting to RM5.155 billion (US$1.4 billion), and representing 29 percent of total approved foreign direct investments in the manufacturing sector.  

US-Asean Business Council Endorses US-Malaysia FTA Talks

Meanwhile the US-Asean Business Council also endorsed the FTA. The Council has been the leading private sector advocate behind the start of FTA talks with Malaysia. In December of last year, a Council delegation of 18 executives to Malaysia to encourage the start of FTA talks.  

The US-Asean Business Council is the Secretariat of the US-Malaysia FTA Business Coalition.

The Coalition is co-chaired by representatives of several of the most recognised US brands, including American International Group, Cargill, Citigroup, Discovery Communications, Inc, Federal Express, General Electric Company, Intel Corporation and Oracle Corporation.  Its Steering Committee is composed of the most influential American trade associations active in Washington.  

With talks now announced, the full weight of this coalition will be brought to bear on achieving an agreement that can pass Congressional muster, and on building the necessary Congressional support.

Malaysia will join a list of 11 other countries with which Washington is currently negotiating free trade deals. FTAs already reached with Oman, Peru and Colombia is expected to receive Congressional consideration in the months ahead. Already under way are FTA negotiations with Panama, Ecuador, the United Arab Emirates, the five countries of the South African Customs Union, South Korea and Thailand.

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