Malaysia Accepted into TPP

The 8-member Trans-Pacific Partnership (TPP) has decided to include Malaysia in the negotiations to forge a regional, trans-Pacific free trade agreement, according to Malaysia's Ministry of International Trade and Industry (Items 1 and 2).

And the US Trade Representative Ron Kirk had notified the US Congress of the administration's decision to include Malaysia in the talks in a letter addressed to the leaders of the Senate and the House of Representatives. (Item 3)

The countries involved in the TPP talks are Australia, Brunei, Chile, New Zealand, Peru, Singapore, the United States and Vietnam.

The negotiating areas that Malaysia will be involved in include trade in goods, rules of origin, customs cooperation, trade remedies, sanitary and phytosanitary, technical barriers to trade and government procurement. Many of the issues and demands that Malaysia will face will be similar to those it encountered under the now stalled US-Malaysia FTA talks.

The third round of TPP talks is taking place in Brunei this week.

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Item 1

Malaysia Joins TPP Agreement Negotiations

October 06, 2010 20:54 PM

KUALA LUMPUR, Oct 6 (Bernama) -- Malaysia will be joining the Trans-Pacific Partnership (TPP) Agreement negotiations which currently comprises eight countries including the United States.

This means Malaysia will attend the third round of TPP talks in Brunei after earlier rounds in Melbourne in March and San Francisco in June this year.

All eight TPP members -- Australia, Brunei, Chile, New Zealand, Peru, Singapore, United States and Vietnam, had unanimously agreed to include Malaysia as a full negotiating member, the Ministry of International Trade and Industry said in a statement Wednesday.

The statement said that the minister, Datuk Seri Mustapa Mohamed, viewed the news positively and was eagerly anticipating his meeting with the ministers from the various TPP countries at the margins of the Asia Pacific Economic Cooperation (Apec) ministerial meeting in Yokohama later this year.

Malaysia was involved in negotiations with the US to clinch a free trade agreement between 2006 and 2008 but it came to nought after several rounds.

MITI said that Malaysia viewed the TPP as a positive step towards deeper integration within the Asia Pacific region, similar to efforts currently undertaken through the Asean Free Trade Agreement and the Asean FTA initiatives with its dialogue partners.

In line with this development, a team comprising officials from the various ministries and agencies will be participating in the negotiations of 23 Working Groups, covering areas such as trade in goods, rules of origin, customs cooperation, trade remedies, sanitary and phytosanitary, technical barriers to trade and government procurement.

"If successfully implemented, the TPP offers an excellent platform to realise the creation of a huge market, encompassing some of the biggest economies in the Asia-Pacific region," MITI said.

The TPP also acts to introduce a new dimension to regional trade - one that could potentially change the dynamics of trade and investment between the countries of the Pacific Rim and possibly even world trade.

"With the United States being an existing TPP member, this would enable an additional 11.7 per cent of Malaysia's global trade to be accorded preferential treatment - bringing the total figure up to 71.2 per cent of Malaysia's global trade," the ministry said.

Malaysia will also benefit from the elimination of duties on 12.4 per cent of Malaysia's exports particularly on footwear and textile and apparel products, which are imposed high duties of up to 37.5 per cent and 32 per cent, respectively.

It will also enjoy elimination of specific duties on cocoa products, petroleum oils, textiles and apparel, footwear, metal products and clocks and watches.

In 2009, Malaysia's bilateral trade with the TPP member countries totalled RM285.8 billion or 28.9 per cent of its total trade.

The top trading partner was Singapore with RM125.5 billion followed by the United States with RM109.2 billion.

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Item 2

Malaysia Joins Trans-Pacific Free Trade Talks

Oct 6, 2010, DPA

Kuala Lumpur - Malaysia has been invited to join the United States and seven other nations in talks on a regional, trans-Pacific free trade agreement, the International Trade and Industry Ministry said Wednesday.

'All eight Trans-Pacific Partnership members unanimously agreed to include Malaysia as a full negotiating member of the TPP negotiations,' the ministry said.

'This would effectively enable Malaysia to be involved in negotiations at the third round in Brunei,' it said.

Existing members Australia, the United States, New Zealand, Brunei, Vietnam, Chile, Singapore and Peru began their first round of talks in March in Australia. The second round was held in the United States in June.

'With the US being an existing TPP member, this would enable an additional 11.7 per cent of Malaysia's global trade to be accorded preferential treatment, bringing the total figure up to 71.2 per cent of Malaysia's global trade,' the ministry said.

Malaysia could also benefit from the elimination of duties on 12.4 per cent of exports, which would particularly benefit footwear and textile products, currently imposed high duties of up to 37.5 and 32 per cent respectively.

Last year, Malaysia's trade with the TPP member countries totalled 285.8 billion ringgit (92.4 billion dollars) or 28.9 per cent of Malaysia's total trade. The top trading partner was Singapore with 125.5 billion ringgit, followed by the US with 109.2 billion ringgit.

The move to join the US-led free trade talks came a day after Malaysia launched free trade negotiations with the European Union.

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Item 3

US to Include Malaysia in Trans-Pacific Trade Negotiations

6 Oct 2010 (AFP)

WASHINGTON - President Barack Obama's administration will include Malaysia in trade negotiations aimed at creating a partnership with key nations in the Asia-Pacific region, the top US trade envoy said Tuesday.

US Trade Representative Ron Kirk notified the Congress of the administration's plan to include Malaysia in the ongoing talks in a letter addressed to the leaders of the Senate and the House of Representatives.

"On behalf of the president, I am pleased to inform the Congress that we intend to include Malaysia in the ongoing negotiations on the Trans-Pacific Partnership Agreement," Kirk wrote to Senator Daniel Inouye and House Speaker Nancy Pelosi.

The administration had notified the Congress last December that it would enter TPP negotiations, viewing an agreement as "a means to advance US economic interests with the fastest-growing economies in the world" and as a potential platform for regional economic integration, he recalled.

"Malaysia's inclusion in the TPP negotiations will contribute meaningfully to these goals and further expands the economic significance of a TPP Agreement," he said.

The US trade representative noted that Malaysia was engaged in extensive domestic economic reform and there were still outstanding issues in negotiations of a bilateral free-trade pact.

Malaysia "has assured us that it is now prepared to conclude a high-standard agreement, including on these issues," he told the Congress.

US-Malaysia trade talks have bogged down in sensitive areas including Malaysia's system of affirmative action for Muslim Malays who dominate the multi-racial population.

Kirk pointed out that Malaysia already is an important US export destination. Goods and services exported to the Southeast Asian nation totaled 10 billion dollars in 2009.

The Trans-Pacific Partnership is a once-obscure pact revived by Obama as other trade deals languish before the US Congress.

The countries involved in the Trans-Pacific Partnership talks are Australia, Brunei, Chile, New Zealand, Peru, Singapore, the United States and Vietnam.

Lawmakers from Obama's Democratic Party have been critical of free-trade pacts, fearing that they would hurt US workers, particularly amid a fragile recovery from recession and high unemployment near 10 percent.

The previous Republican administration of George W. Bush completed negotiations with South Korea on a free-trade pact, but the Congress has yet to act on it with Washington seeking more concessions for US automakers.

Congress also has held up bilateral trade agreements with Colombia and Panama.

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