Malaysian Manufacturers Back Free Trade With U.S.

Talks could wrap up by the end of the year. Some see benefit only to America.

KUALA LUMPUR, Malaysia (AP) - Malaysian manufacturers Thursday reaffirmed support for the government's plan to forge a free trade pact with the United States amid protests from activists who feared it would only benefit Americans.

U.S. and Malaysian officials are due later Thursday to wrap up their first round of talks, which began Monday on the northern island of Penang. Both sides hope to conclude talks by the year-end.

Some 100 representatives from various nongovernment groups staged a peaceful protest Monday in Penang to express reservations about the trade deal. U.S. negotiators have said Washington wants transparency in awarding of government contracts, greater imports of foreign cars and better access to financial markets.

But the Federation of Malaysian Manufacturers, or FMM, said a free trade agreement would benefit local makers of footwear, textile, apparel and ceramic tableware, which face high import duties in the U.S.

''Preferential treatment gained through this FTA will provide Malaysian manufacturers the competitive advantage over competitors that are able to produce at lower cost such as from China,'' it said in a statement.

''The liberalization in tariffs enables such products from Malaysia to penetrate the U.S. market as well as boost current exports.''

However, the FMM cautioned both sides must not rush negotiations but ensure they address wide technology and economic gap between the two nations to ensure the FTA brings tangible economic benefits.

The United States is Malaysia's top trading partner, accounting for nearly 17 percent of the Southeast Asian nation's global trade in 2005. It is also Malaysia's No. 1 foreign investor and its main export market.

Malaysia is the United States' 10th largest trading partner, with US$44 billion (euro36 billion) in two-way trade. Officials predict it will double by 2010 once the free trade pact is in place.

The FMM said opportunities to tap the U.S. market, which remains the largest in the world with imports about US$1.5 trillion (euro1 trillion) should generate a net gain for Malaysian manufacturers.

It noted that U.S.-Singapore trade jumped by more than 10 percent last year after they signed a free trade agreement, while Australia also reported sharp rise in exports of meat and dairy products and expansion in services a year after sealing an FTA with Washington.

Washington, which is also negotiating trade deals with Thailand and South Korea, hopes to send all three deals to Congress for approval before July 2007, the expiration of President George W. Bush's authority to negotiate trade deals that require Congress to approve or reject them without adding any amendments.

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