Malaysia-US Free Trade In Jeopardy

Free trade talks between the United States and Malaysia may be scrapped if they fail to reach an agreement by this summer, mainly on a dispute over the way Malaysian state contracts are awarded, a U.S. official said Thursday.

State contracts are mostly awarded to Malaysia's ethnic Malay majority under an affirmative action program to give them an advantage in competing with the wealthier Chinese minority. The policy has kept foreign companies from bidding for state contracts, and the U.S. says it wants more clarity and transparency on how tenders are awarded.

The so-called "procurement policy" was left out of negotiations this week as the Malaysian government wanted more time to think about it, said Barbara Weisel, a senior U.S. negotiator leading free trade talks.

Both sides will try to conclude the agreement "by this summer," she said, refusing to elaborate.

The United States, Malaysia's biggest trading partner, wants a deal before a new president takes over after the November elections.

The Malaysian government, which is expected to call for an election in March, isn't likely to compromise on the issue as it may spark Malay anger and cause it to lose votes, observers said.

No date has been set for the next round of talks.

Malaysian trade officials couldn't be immediately reached for comments.

If a pact is signed, officials say bilateral trade between Malaysia and the United States would double by 2010 from $44 billion in 2005.

Some Malaysian activists have opposed an agreement, saying it would put local farmers out of work, lead to job losses, erode workers' rights and end the availability of cheap drugs for people with AIDS and other diseases. (chron.com)

***** The fact of the matter is that Malaysia needs the FTA more than the US does. The alternative would be marginalisation in the world of international business. However if the government signs on the dotted line its political raison d'être will be severely compromised and it cannot keep on pretending to be 'berjuang-ing' for bangsa, agama dan negara.

In order to stay in power Umno has to continously provide for the 'deprived and helpless' Malays. Loyalty to party which is bought and bribed on the premise of supplying freebies on a regular basis with promises of more to come is basically an ephemeral one. Remove the goodies and the loyalty disappears or is shifted to a more generous benefactor. Let us see how the political parasites in power handle this issue.
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