Friday March 17, 2006
Malaysia-US trade will double by 2010
KUALA LUMPUR (AP): Trade between Malaysia and the United States is expected to double by 2010 in the wake of a free trade agreement the two nations hope to seal next year, a senior U.S. trade official said Friday.
A free trade deal will boost Malaysia's exports to the U.S. and help it diversify away from electronics and electrical goods, which now make up three-quarter of exports, said Karan K. Bhatia, deputy U.S. trade representative.
"The (U.S.) National Association of Manufacturers has estimated that with the FTA between the U.S. and Malaysia, two-way trade could double by 2010," Bhatia told a news conference on his visit here as part of an Asian tour.
"The FTA will cement a vibrant US-Malaysia economic relationship," he added.
Malaysia is now the Unites States' 10th largest trading partner with $44 billion (euro37 billion) in two-way trade.
The two countries earlier this month agreed to launch FTA talks and conclude them by the end of the year.
Bhatia said he didn't expect any major obstacles in the FTA negotiations, although Malaysia protects its local automobile industry by imposing high tariffs on foreign cars.
An agreement will help Malaysia grow its auto sector by giving national car makers Proton and Perodua access to the U.S. market, as well as bring more American investment into Malaysia, he said.
"This is a win-win situation. It could stimulate Malaysia's competitiveness and grow its role within ASEAN. We are confident that (the FTA) is going to be realized," he added.
Malaysia's auto tariffs have been whittled down in recent years in line with a regional free trade pact but still present a formidable barrier to Japanese, American and European car makers.
Bhatia said the U.S. - which is also in FTA talks with South Korea and Thailand - hopes to send all three FTA deals to Congress for approval by July 1, 2007.
That's the expiration date of President George W. Bush administration's authority to negotiate trade deals that require Congress to approve or reject them without adding any amendments.
"Right now, there is no other region the U.S. is more economically focused in than Asia," he said, adding that Washington is keen to create a "web of FTAs within the ASEAN region and throughout East Asia."
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