Order Code RL33445
The Proposed U.S.-Malaysia
Free Trade Agreement
Updated February 5, 2007
Michael F. Martin
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division

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The Proposed U.S.-Malaysia Free Trade Agreement
Summary
This report addresses the proposed U.S.-Malaysia free trade agreement (FTA).
It provides a brief overview of the Malaysian economy, a review of U.S. interests in
the proposed agreement, an examination of possible issues likely to arise during the
negotiations, a comparison of tariff rates between the two countries, legislative
procedures, and an appendix with a brief chronology and trade data — including U.S.
exports and imports to Malaysia by sector and exports to Malaysia by state.
The U.S. Trade Representative, on March 8, 2006, announced the
Administration’s intent to negotiate a free trade agreement with Malaysia. The goal
of the proposed FTA is to remove tariffs and non-tariff barriers and expand trade
between the two nations. Beginning in June 2006, five rounds of negotiations
(alternating between the two countries) were scheduled. The fourth round was held
in San Francisco on January 8- 12, 2007. The negotiating goal is to complete the talks
by March 31, 2007, in order for Congress consider it before the Administration’s
Trade Promotion Authority expires on July 1, 2007.
The proposed U.S.-Malaysia FTA is of interest to Congress because (1) it
requires congressional approval under expedited legislative procedures; (2) it
continues the trend toward greater trade liberalization and globalization; (3) it may
include controversial provisions; and (4) it would affect certain trade flows that
would, in turn, affect U.S. businesses or farmers, particularly import-competing
industries and those exporting to Malaysia.
Malaysia is a rapidly industrializing country with a gross domestic product of
$131 billion and a majority Muslim population of 25.6 million people. It is a
democratic secular Muslim state; a member of ASEAN, Asia Pacific Economic
Cooperation, and other multilateral fora, and shares an interest with the United States
in dealing with a rising China and in securing a safe shipping channel through the
Strait of Malacca. Malaysia is not a member of the Arab League.
On a most favored nation basis, Malaysia’s average tariff rate is 8.1% — nearly
twice the 4.9% of the United States. Under an FTA, exporters in each country would
face the same tariff rates — most of which to be phased out over time — and a more
level playing field for U.S. businesses shipping merchandise to Malaysia.
Areas of particular interest to U.S. exporters include a reduction of Malaysian
barriers to exports of automobiles (Malaysia protects its automobile industry with
tariffs of 30% on fully assembled vehicles and excise taxes ranging from 80% to
200%) and certain agricultural products, stricter enforcement of intellectual property
rights, and broader access in sectors such as financial services, government
procurement, telecommunications, and professional services.
Malaysia is the tenth largest trading partner of the United States with U.S.
exports of $10.4 billion and imports of $33.7 billion for a U.S. bilateral deficit of
$23.3 billion in 2005. The United States is Malaysia’s top export market and second
to Japan for Malaysia’s imports. This report will be updated periodically.

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Contents
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Malaysian Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interests, Benefits and Potential Opposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FTAs and Tariff Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Average MFN Tariff Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Average Applied Tariff Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Possible Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Automobiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Government Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Capital Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Trade Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Outcomes from Recent Bilateral Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Legislative Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Appendix A. Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Appendix B. U.S. Exports of Merchandise to Malaysia by Two-Digit
Harmonized System Codes, 2004-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Appendix C. U.S. Imports of Merchandise from Malaysia by Two-Digit
Harmonized System Codes, 2004-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Appendix D. U.S. Merchandise Exports by State to Malaysia, 2004-2006 . . . . 33
List of Figures
Figure 1. Map of Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

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List of Tables
Table 1. Selected Indicators for the Malaysian Economy . . . . . . . . . . . . . . . . . . . 4
Table 2. Average and Range of Malaysian and U.S. Most Favored Nation
Tariff Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 3. U.S. and Malaysian Average Applied Tariffs Rates for
Industrial Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Table 4. U.S. Trade with Malaysia, 2000 to 2006 . . . . . . . . . . . . . . . . . . . . . . . 18
Table 5. Malaysia’s Merchandise Exports by Top 10 Trading Partners . . . . . . . 18
Table 6. Malaysia’s Merchandise Imports by Top 10 Trading Partners . . . . . . . 19

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The Proposed U.S.-Malaysia Free Trade
Agreement
Recent Developments
! January 8-12, 2007. Fourth round of talks held in San Francisco
result in modest progress; plans made for fifth round to be held in
Malaysia on February 5-9, 2007.
! December 27, 2006. The Administration reported that it was not
likely to ask Congress to substantially change U.S. import laws
(trade remedies laws) due to negotiations on a free trade agreement
with Malaysia.
! September 18, 2006. The third round of negotiations in Malaysia
was postponed to October 30 because of a change in the lead
Malaysian negotiator.
! Government procurement restrictions that reserve a certain share for
ethnic Malays reportedly are emerging as a major sticking point in
the negotiations.
Introduction1
On March 8, 2006, the U.S. Trade Representative announced and notified
Congress of the Administration’s intent to negotiate a free trade agreement (FTA)
with Malaysia. The goal of the proposed FTA is to remove tariffs and non-tariff
barriers and expand trade between the two nations. The first round of negotiations
was held June 12-16, 2006, in Malaysia with at least five rounds anticipated. The
two countries announced that they are seeking to complete the talks by March 31 in
order to send the proposed implementing legislation to Congress in the spring of
2007 and have Congress consider it before the Bush Administration’s Trade
Promotion Authority expires on July 1, 2007, but they later indicated that they would
not rush into concluding the FTA just to meet the deadline.2
1 The author would like to thank Dick Nanto, who conceived of this report and who wrote
much of the text of this report.
2 U.S. Trade Representative. “United States, Malaysia Announce Intention to Negotiate
Free Trade Agreement.” USTR Press Release, March 8, 2006. “U.S., Malaysia Launch
FTA Talks, Seek to Complete Pact by End of Year.” International Trade Reporter, Vol. 23,
No. 10, March 9, 2006. P. 344. “Malaysia, US Agree Not to Rush Into Signing FTA.”
(continued...)

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Figure 1. Map of Malaysia
Malaysia and
PHILIPPINES
G u l f o f
Singapore
S u l u
S e a
T h a i l a n d
VIETNAM
0
50 100 Miles
0
50 100 KM
S o u t h C h i n a
S e a
St ra i t of
MALAYSIA
BRUNEI
Mal a cc a
Kepulauan
Natuna
(INDONESIA)
C e l e b e s
S e a
MALAYSIA
Sumatra
I
N
D
O
N
E
S
I
A
Source: Map Resources. Adapted by CRS. (K.Yancey 5/13/04)
An FTA with Malaysia would be the third FTA negotiation with a Southeast
Asian nation, following the U.S.-Singapore FTA that came into effect on January 1,
2004 and a proposed U.S.-Thailand FTA whose negotiations now are stalled. The
United States also has an FTA with Australia and is negotiating an FTA with South
Korea. On May 10, 2004, the United States and Malaysia signed a Trade and
Investment Framework Agreement.3
The proposed FTA is expected to be comprehensive and similar to that signed
with Singapore. It would include a phasing out of tariffs on imports from each
country, further opening of service sectors, and greater freedom for U.S. investment
in the rapidly industrializing Malaysian economy. U.S. industries are particularly
interested in greater market access in the automotive, financial services, government
procurement, and agricultural sectors and in improving protection of intellectual
property rights in Malaysia.
The proposed U.S.-Malaysia FTA is of interest to Congress because (1) it
requires congressional approval under expedited legislative procedures; (2) it would
continue the trend toward greater trade liberalization and globalization; (3) it may
include controversial provisions; and (4) it would affect certain trade flows that
would, in turn, affect U.S. businesses or farmers, particularly import-competing
industries and those exporting to Malaysia.
2 (...continued)
Financial Times Information, Thai Press Reports. August 25, 2006.
3 Office of the U.S. Trade Representative. “United States and Malaysia Sign Trade and
Investment Framework Agreement.” Press Release. May 10, 2004.

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CRS-3
Among the initial responses to the
USTR’s FTA announcement were a
Malaysia
statement by Senator Max Baucus
Area: 127,316 sq. mi., slightly larger
welcoming the agreement, but urging the
than New Mexico.
negotiators to address Malaysia’s continued
Capital: Kuala Lumpur
ban on bone-in beef, and statements by
Population: 25.6 million.
Representatives Jim Kolbe and Dan Burton
Annual Economic Growth Rate:
hailing the launch of the negotiations.4 The
5.8% (estimated 2006)
National Association of Manufacturers
Ethnic groups: Malay 50.8%, Chinese
23.8%, Indigenous 10.9%, Indian
indicated that it has been a leading advocate
7.1%
of an FTA with Malaysia,5 and a
Religions: Islam (60.4%), Buddhism
U.S.-Malaysia Free Trade Agreement (FTA)
(19.2%), Christianity (9.1%)
Business Coalition was organized on March
Government: Federal parliamentary
8, 2006.6 Objections to the proposed FTA
democracy with a constitutional
have come from some Malaysian and U.S.
monarch. After becoming independent
labor unions, farmers, fishermen and
in 1957, Malaya, Sabah, Sarawak, and
academics.7
Singapore formed Malaysia in 1963.
Singapore became an independent
The expiration of Trade Promotion
country in 1965.
Authority (TPA) in the United States on
Prime Minister: Abdullah bin
Ahmad Badawi
July 1, 2007, places some pressure on the
GDP per capita: $5,353 (estimated
Bush Administration to conclude
2006)
negotiations of this proposed FTA. TPA
Currency: 3.5 Ringgit = $1.
grants to the President the authority to enter
Trade: The United States is
into certain trade agreements, and to have
Malaysia’s largest trading partner.
their implementing bills considered under
Malaysia is the 10th largest U.S.
expedited legislative procedures.8 TPA also
trading partner.
requires that Congress be notified of the
intent to sign an agreement 90 days prior to
the actual signing. Therefore, the FTA would have to be finalized before April 2,
2007, in order to be considered under the current TPA provisions.
4 Office of Senator Max Baucus. Baucus Welcomes Launch of U.S.-Malaysia Free Trade
Talks, Press Release, March 8, 2006. Office of Congressman Jim Kolbe. Kolbe Hails Free
Trade Negotiations with Malaysia, Press Release, March 9, 2006. Office of Congressman
Dan Burton. Vice-Chairman Burton Comments on the Launch of the United States-
Malaysia Free Trade Agreement, March 7, 2006.
5 National Association of Manufacturers. Testimony of Christopher Wenk before the Trade
Policy Staff Committee, Office of the U.S. Trade Representative, on “Proposed United
States-Malaysia Free Trade Agreement,” May 3, 2006.
6 The web page for the U.S.-Malaysia Free Trade Agreement (FTA) Business Coalition is
[http://www.us-asean.org/US-Malaysia%20FTA/index.asp]. The Secretariat for the US-
Malaysia Free Trade Agreement Business Coalition is the US-ASEAN Business Council.
7 The website, “FTA Malaysia,” [http://www.ftamalaysia.org/] is a nexus for information
provided by groups, organizations and individuals opposed to the U.S.-Malaysia FTA.
8 For more details on TPA, see CRS Report RL33743, Trade Promotion Authority (TPA):
Issues, Options, and Prospects for Renewal, by J. F. Hornbeck and William H. Cooper.

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FTA negotiations, however, can take longer than initially anticipated. For
example, negotiations for the U.S.-Singapore Free Trade Agreement were launched
in December 2000 with the hope of signing the agreement within a few months. The
agreement was signed nearly three years later on September 4, 2003.
This report provides a brief overview of Malaysia and its bilateral trade relations
with the United States, a survey of possible support and opposition to the FTA, an
examination of possible issues likely to arise during the negotiations, a comparison
of tariff rates between the two countries, and legislative activity with policy options.
It also includes a brief chronology and import and export data, including U.S. exports
to Malaysia by sector and exports to Malaysia by state.
The Malaysian Economy
Malaysia is a rapidly industrializing country, a member of the Association of
Southeast Asian Nations (ASEAN), and a nation with a population of 25.6 million
people, the majority of whom are Muslims. Malaysia’s government is a federal
parliamentary democracy with a constitutional monarch.
Table 1. Selected Indicators for the Malaysian Economy
2005
2006 (est.)
2007 (proj.)
Real GDP Growth
5.2%
5.8%
6.0%
Nominal GDP ($ billion)
124.457
142.593
155.982
Nominal GDP per Capita
$4,763
$5,353
$5,740
Inflation Rate - CPI
3.0%
3.7%
n.a.
Inflation Rate - PPI
6.8%
6.8%
n.a.
Unemployment Rate
3.5%
3.5%
3.5%
Exports ($ billion)
140.950
162.688
177.301
Imports ($ billion)
114.603
132.391
145.572
Source: Malaysia’s Ministry of Finance, [http://www.treasury.gov.my].
Malaysia’s GDP and average per capita income make it a market considerably
larger than most of the countries that have recently negotiated free trade agreements
with the United States. At official exchange rates, the per capita income is $5,353,
but its purchasing power parity is estimated at $11,871.9 As such, Malaysia is a mid-
size market more in the range of Australia and South Korea.
According to Malaysia’s Ministry of Finance, the United States is its largest
trading partner and largest foreign investor. According to U.S. trade figures,
9 Purchasing power parity estimates of per capita GDP attempt to revalue official GDP
figures by comparing the relative costs of a select group of goods in each nation and then
recalculating per capita GDP to reflect the relative purchasing power in each nation.

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CRS-5
Malaysia was the tenth largest trading partner of the United States. The United States
exported more to Malaysia than it did to Israel, Ireland, or India and three times as
much as it sold to Russia. In the first 10 months of 2006, U.S. investment in
Malaysia totaled over $537 million — the third greatest source of foreign investment
in Malaysia, after Japan and Australia.10
Interests, Benefits and Potential Opposition
Malaysia plays into U.S. interests through its economy and trade, its role in
countering radical Islamic terrorism; the example it sets as a democratic secular
Muslim state; its position as a member of ASEAN, Asia Pacific Economic
Cooperation (APEC), and other multilateral fora; its shared interest in dealing with
a rising China; and its shared interest in securing a safe shipping channel through the
Strait of Malacca.
The proposed FTA also is part of the Bush Administration’s strategy to press
for regional and bilateral trade initiatives in order to “ignite a new era of global
economic growth through free markets and free trade.” This is a component of the
U.S. national security strategy.11 It also is in accord with the Enterprise for ASEAN
Initiative, a trade initiative of the Bush Administration in which the United States has
offered the prospect of FTAs with members of ASEAN committed to economic
reforms and openness. In a broader sense, a U.S.-Malaysia FTA would be a step
toward realization of APEC’s “Bogor Vision,” under which the United States and
APEC’s other 21 members are working toward “free and open trade in the Pacific.”
At the 2006 APEC meetings, the United States proposed that APEC consider forming
a Free Trade Area of the Asia Pacific that would accomplish this goal.12 With the
Doha Round of multilateral trade talks under the World Trade Organization (WTO)
stalled, some see FTAs as a fallback position should the WTO talks collapse.
When announcing the proposed negotiations, the U.S. Trade Representative
listed four major goals associated with a U.S.-Malaysia FTA. These were: (1) to
create new opportunities for U.S. manufacturers, farmers, and service providers; (2)
to strengthen U.S. competitiveness and generate high-paying jobs; (3) to strengthen
U.S. economic partnerships in the region; and (4) to advance broader U.S. strategic
goals.13 Other benefits mentioned for the proposed FTA include (5) to cement a
vibrant U.S.-Malaysia economic relationship; (6) to increase U.S. exports; (7) to
diversify U.S. exports; (8) to increase investment; (9) to increase the sharing of
knowledge and know-how between American companies and Malaysian companies;
10 Source: Malaysia Industrial Development Authority [http://www.mida.gov.my/].
11 The White House. National Security Strategy of the United States. March 2006, part VI.
12 See CRS Report RL31038, Asia Pacific Economic Cooperation (APEC), Free Trade, and
the 2006 Meetings in Hanoi, Vietnam by Michael F. Martin.
13 Office of the United States Trade Representative. Free Trade Agreement: U.S.-Malaysia.
Trade Facts, March 2006.

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CRS-6
(10) to enhance economic growth and job creation; and (11) to lower costs and create
more competitive companies.14
A U.S.-Malaysia FTA also would keep the U.S. economy linked to the dynamic
economies of Southeast Asia. Malaysia already has FTAs with Indonesia, Brunei,
Singapore, the Philippines, and Vietnam under the ASEAN free trade area. It has
FTAs with South Korea and Pakistan, an economic partnership agreement with Japan
covering most goods trade, a partial FTA with China, is negotiating FTAs with
Australia and New Zealand, and is discussing an FTA with India. The USTR has
also indicated that with the proposed FTA, the U.S. government is hoping to further
build the trading relationship with Malaysia as well as broader bilateral relations with
a country that has been on the “forefront of Asia’s economic transformation and is
a leader in the region and beyond.” The USTR hopes that this FTA will strengthen
U.S. cooperation with Malaysia in multilateral and regional fora, reinforce a strong
U.S.-ASEAN relationship, and advance U.S. commercial and strategic interests in
Asia.15
As a moderate, democratic Muslim nation, Malaysia plays a strategic role in
U.S. foreign policy. In 2005, Malaysia’s Prime Minister Abdullah Badawi urged
Muslims around the world to guard against extremism and improve ties with the
West while promoting his nation’s moderate version of Islam.16 The U.S.
government hopes that the proposed FTA will reinforce the shared interests of the
United States and Malaysia, promote common values, and facilitate cooperation in
counter-terrorism, defense, counter-narcotics, education, and in other areas.17
Malaysia (along with Singapore, Thailand and Indonesia) also plays a key role in
protecting vital maritime shipping lanes in the Strait of Malacca from pirates and
terrorism.
In the United States, opposition to the proposed FTA has emerged from labor
unions, environmental protection organizations, as well as “anti-globalization”
groups. In Malaysia, voices opposing the FTA have arisen from labor unions,
farmers, fishermen and other groups, as well as from opposition political parties. In
some cases, opponents to the U.S.-Malaysia FTA from both nations have formed
coalitions.18
14 Remarks by Ambassador Karan K. Bhatia, Deputy U.S. Trade Representative, Press
Conference on the U.S.-Malaysia Free Trade Agreement, Kuala Lumpur, Malaysia, March
17, 2006.
15 Weisel, Barbara. Opening Remarks, Public Hearing, U.S.-Malaysia FTA, Washington,
DC, May 3, 2006.
16 “Malaysia PM Abdullah Warns Muslims Against Extremism.” Voice of America.
January 27, 2005. See also CRS Report RL31672, Terrorism in Southeast Asia, by Bruce
Vaughn (Coordinator), Emma Chanlett-Avery, Thomas Lum, Mark Manyin, and Larry
Niksch.
17 Weisel, Barbara. Opening Remarks, May 3, 2006. Op. cit.
18 The AFL-CIO and the Malaysian Trades Unions Congress signed a joint declaration
regarding a U.S.-Malaysia FTA on January 22, 2007 in Kuala Lumpur, stating that any
(continued...)

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CRS-7
With respect to labor interests, the AFL-CIO opposes additional FTAs in
general. Its position is that the Bush Administration has launched or concluded
bilateral free trade agreements that include no enforceable protections for core
workers’ rights, move “backwards from previous accords on workers’ rights, and
contain many of the same flawed rules that have worsened our trade deficit” under
the North American Free Trade Agreement (NAFTA).19 Labor organizations also are
interested in ensuring that labor laws in the bilateral trading partner country are
brought up to International Labor Organization (ILO) standards and that a dispute
settlement or enforcement mechanism is included in agreements that would preclude
partner countries from reversing labor gains or weakening labor laws following
congressional approval and implementation of their respective FTAs.20 As for labor
conditions in Malaysia, most workers have the right to engage in trade union activity.
As of September 2004, 9% of the labor force was represented by the 617 trade
unions.21
There has also been organized opposition to a U.S.-Malaysia FTA from
Malaysians. On January 11, 2007, an anti-FTA campaign in northern Malaysia
resulted in petitions with over 20,000 farmer and fishermen signatures being
submitted to Malaysia’s Prime Minister Badawi and Malaysia’s Ministry of
International Trade and Industry. The petitions state that the proposed FTA would
harm Malaysia’s rice farmers and fishing industry.22 In October 2006, a coalition of
opposition parties, workers, and small businesses in Malaysia called for the cessation
of negotiations with the United States until a study of the economic and social impact
of the proposed FTA was conducted.23
Opposition to an FTA also may arise from various special interest groups. For
example, Public Citizen, a nonprofit consumer advocacy organization in the United
States, maintains that the FTA with Central America is “based on the same failed
18 (...continued)
agreement “must result in broadly shared benefits to working people and communities, not
simply extend and enforce corporate power and privilege.” For more details, see “U.S.
Unions Oppose Free Trade with Malaysia,” by Anil Netto, Inter Press Service News
Agency, January 22, 2007.
19 AFL-CIO. Issue Brief: The Bush Record on Shipping Jobs Overseas. August 2004. See
also: Testimony of Thea M. Lee, Policy Director, American Federation of Labor and
Congress of Industrial Organizations (AFL-CIO), before the House of Representatives
Committee on Ways and Means, Hearing on the Implementation of the United States-
Bahrain Free Trade Agreement, September 29, 2005.
20 See, for example, Testimony of Thea M. Lee, Policy Director, AFL-CIO, before the
Subcommittee on International Trade of the Senate Committee on Finance in a Hearing on
the Implementation of the United States-Oman Free Trade Agreement, March 6, 2006.
21 U.S. Department of State. Bureau of Democracy, Human Rights, and Labor. Country
Reports on Human Rights Practices — 2005, Malaysia. March 8, 2006.
22 “20,000 Fishermen, Farmers Protest Against FTA,” by Fauwaz Abdul Aziz, Malaysiakini,
January 10, 2007.
23 “Malaysians Concerned Over Possible Free Trade Agreement with US,” by Joseph
Masiliamany, AsiaNews, October 10, 2006.

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CRS-8
neoliberal NAFTA model, which has caused the ‘race to the bottom’ in labor and
environmental standards and promotes privatization and deregulation of key public
services.” 24 In Malaysia, people concerned about the cost of pharmaceutical drugs,
especially treatment for HIV/AIDS, are opposed to possible provisions in the FTA
that they believe will raise the cost of prescription drugs in Malaysia.25
Another possible issue could be Malaysia’s relations with Israel. Malaysia
currently does not have diplomatic relations with Israel and requires export licenses
for all goods sent to Israel. U.S. law currently contains several provisions designed
to undermine official boycotts and trade embargoes aimed at Israel.26
In recent congressional consideration of FTAs, opposition concerns have been
addressed either in the implementing legislation or by securing various commitments
in writing from the Administration. For example, in congressional consideration of
the Dominican Republic-Central America-United States Free Trade Agreement (DR-
CAFTA), the Bush Administration assuaged opposition from labor, sugar, and textile
interests by promising certain actions to ameliorate adverse effects of the proposed
FTA. In a letter, the Administration promised to allocate $40 million of fiscal 2006
foreign operations appropriations for “labor and environmental enforcement capacity
building assistance,” and to continue to request this level of funding in budgets for
fiscal years 2007 through 2009. The Administration also stated that it would not
allow the DR-CAFTA to interfere with the operation of the sugar program through
FY2007 as the program is defined in the Farm Security and Rural Investment Act of
2002. For the textile and apparel industry, promises were made related to rules of
origin, stricter customs enforcement with respect to Mexican inputs used in DR-
CAFTA textile and apparel products, and actions to increase use of U.S. fabric.27
In Malaysia, the Ministry of Trade and Industry headed by Hon. Dato’ Seri
Rafidah Azizis is leading the negotiations. The Ministry lists as its FTA objectives
to: (1) seek better market access for Malaysian goods and services; (2) further
facilitate and promote bilateral trade and investment flows as well as economic
development; (3) enhance the competitiveness of Malaysian producers and exporters
through collaboration; and (4) build capacity in specific targeted areas thorough
technical cooperation. The Ministry also views the proposed FTA as comprehensive
and covering liberalization of the goods and services sector; trade and investment
promotion and facilitation activities; investment protection; economic and technical
cooperation programs; and having appropriate flexibility to facilitate development
24 Public Citizen. Global Trade Watch. CAFTA: Part of the FTAA Puzzle.
[http://www.citizen.org/trade/cafta]
25 “People with HIV/AIDS Hold Anti-FTA Protest,” by Soon Li Tsin, Malaysiakini, January
11, 2007; “US FTA: Will We Lose Out, Too?” by Jacqueline Ann Surin, The Sun, January
11, 2007.
26 See CRS Report RS22424, Arab League Boycott of Israel, by Martin A. Weiss.
27 See CRS Report RL31870, The Dominican Republic-Central America-United States Free
Trade Agreement (CAFTA-DR), by J. F. Hornbeck.

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CRS-9
objectives.28 The Ministry also noted that it would seek “flexibility and longer
phase-in periods for sensitive sectors.”29
FTAs and Tariff Rates
FTAs negotiated by the United States usually provide for tariff free trade
between the two countries with a phase-in period for sensitive sectors. With
Malaysia, some trade already is free. Both the United States and Malaysia participate
in the Information Technology Agreement30 (ITA) under which tariffs on
semiconductors and other information technology products are bound at zero. The
majority of current U.S. exports to Malaysia are covered by this agreement.
Semiconductors and parts for computers alone account for more than half of U.S.
exports to Malaysia. Therefore, tariffs are not a barrier to most U.S. products
currently sold to Malaysia. An FTA, however, would open markets artificially
restricted by tariff and non-tariff barriers. Many of the more competitive U.S.
exports face relatively high duties in Malaysia. These include products such as motor
vehicles and parts, off-road dumpers, polyethylene, motorcycles, and adhesives.31
Measuring the degree of protection provided by tariff barriers is a complicated
process, since each country has thousands of products each with a tariff rate that
depends on the category of exporter. Average rates, therefore, will differ depending
on how they are calculated. The two types of averages most often cited are the most
favored nation (MFN) rates and the average applied rates.
Average MFN Tariff Rates
The MFN rates apply to most countries and all members of the World Trade
Organization. U.S. exporters face these rates unless they have been reduced by a
special arrangement, such as the Generalized System of Preferences32 or Information
Technology Agreement. The average MFN rates are simple averages of all tariff
lines. On an MFN basis, Malaysia’s average tariff rate at 8.1% is nearly twice the
4.9% of the United States. Under an FTA, if each country reduces its tariff rates to
zero, U.S. exporters would stand to gain more than their Malaysian counterparts,
since Malaysian rates are considerably higher than those in the United States. Table
28 Malaysia. Ministry of Trade and Industry. Malaysia-US Free Trade Agreement. Media
Release. May 3, 2006.
29 Malaysia. Ministry of Trade and Industry. “Joint Announcement To Launch Negotiations
For A Malaysia United States Free Trade Agreement, 8 March 2006, Washington D.C.”
Media Release, March 13, 2006.
30 See World Trade Organization discussion of the Information Technology Agreement at
[http://www.wto.org/English/tratop_e/inftec_e/inftec_e.htm].
31 Wenk, Christopher. Testimony on the Proposed United States-Malaysia Free Trade
Agreement For the Trade Policy Staff Committee, Office of the U.S. Trade Representative.
May 3, 2006.
32 Malaysia does not qualify for GSP treatment.

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CRS-10
2 shows the average and range of U.S. and Malaysian MFN tariff rates by major
commodity category as classified under the Harmonized System. Both the United
States and Malaysia have peaks in tariff rates on certain products.
Malaysia and the United States each protects its agricultural sector. Although
Malaysia’s average MFN tariff rate for agricultural products at 3.2% is lower than the
9.7% of the United States, Malaysia maintains high rates on items of interest to U.S.
agriculture. The Malaysian tariff rate for grains averages 15.2% and rice is at 40%,
oranges and apples at 15% to 20%, and wheat flour at 96%. Prepared food is subject
to tariffs of 5% to 30%. Beef enters the country at 15% but pork faces a 139% tariff
and ham 168%. The tariff is 25% on yogurt, 10 to 25% on chocolate products, and
20% on baby food. For the United States, the upper range for agricultural products
is a 350% tariff on imports of tobacco products that exceed the import quota.
Tobacco products within the quota face a 12.1% tariff rate. In recent years, the
tobacco quota has not been filled, so the 350% rate has not been applied.
Table 2. Average and Range of Malaysian and U.S. Most
Favored Nation Tariff Rates
Malaysia’s Tariff Rates
U.S. Tariff Rates
(2005)
(2004)
No. of
Average Range
No. of Average Range
Lines
(%)
(%)
lines
(%)
(%)
Total
10,581 8.1
0-60
10,304
4.9
0-350
Agricultural products
1,202 3.2
0-40
1,611
9.7
0-350
Live animals and products
thereof
142
0.8
0-20
140
4.2
0-100
Dairy products
40
6.1
0-25
166
26.1
0-284
Coffee and tea, cocoa,
sugar, etc.
209
4.1
0-25
314
11.6
0-159
Cut flowers and plants
46
0.0
0-0
60
1.5
0-6.8
Fruit and vegetables
302
3.9
0-30
437
6.3
0-132
Grains
21
15.2
0-40
21
1.5
0-11
Oils seeds, fats, oil and
their products
197
2.0
0-20
92
6.0
0-164
Beverages and spirits
81
6.4
0-30
100
6.1
0-107
Tobacco
19
5.0
5-5
47
56.4
0-350
Other agricultural products,
n.e.s.
145
1.3
0-25
234
1.9
0-62
Non-agricultural
products (excl. petrol.)
9,349 8.7
0-60
8,665
4.0
0-58
Fish and fishery products
188
3.2
0-20
193
2.0
0-35
Mineral products, precious
stones, etc.
416
10.4
0-60
530
3.3
0-38

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CRS-11
Malaysia’s Tariff Rates
U.S. Tariff Rates
(2005)
(2004)
No. of
Average Range
No. of Average Range
Lines
(%)
(%)
lines
(%)
(%)
Metals
1,061 17.5
0-50
1,011
1.9
0-26
Chemicals and
photographic supplies
1,481
5.1
0-50
1,834
3.7
0-6
Leather, rubber, footwear,
travel goods
397
13.1
0-40
389
6.9
0-58
Wood, pulp, paper and
furniture
2,370 2.5
0-40
508
0.7
0-14
Textiles and clothing
1,176
12.6
0-30
1,651
9.0
0-38
Transport equipment
461
25.8
0-50
228
2.6
0-25
Non-electric machinery
735
6.3
0-35
853
1.3
0-10
Electric machinery
438
9.5
0-50
558
2.1
0-15
Non-agric products, n.e.s.
626
6.3
0-50
910
3.0
0-39
Petroleum
30
0.5
0-5
28
2.2
0-7
By sectora
-Agriculture and fisheries
1,655
0.4
0-40
492
5.7
0-350
-Mining
124
1.0
0-30
121
0.4
0-10
-Manufacturing
8,801 9.6
0-60
9,690
4.9
0-350
-excluding food processing
7,904 10.2
0-60
By stage of processing
First stage of processing
2,054
0.9
0-40
964
3.7
0-350
Semi-processed products
3,482
9
0-60
3,392
4.3
0-159
Fully-processed products
5,045
10.4
0-60
5,948
5.4
0-350
Source: World Trade Organization calculations, based on data provided by the Malaysian and U.S.
authorities. See Trade Policy Review — Report by Malaysia, WT/TPR/G/156, December 12, 2005,
and Trade Policy Review — Report by the United States, WT/TPR/S/160, February 15, 2006.
Note: Calculations exclude specific rates and include the ad valorem part of alternate and compound
rates. The tariff is based on HS02 nomenclature. The number of lines refers to the number of
individual lines in the list of tariffs for each country.
a. International Standard Industrial (Rev.2) classification. Electricity, gas, and water are excluded.
The concern that an FTA would generate a surge in agricultural imports from
Malaysia seems small. In 2004, for example, Malaysia exported to the world a total
of $106 million in dairy products, $88 million in sugar, and $225 million in tobacco

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CRS-12
products.33 Malaysia does not have a significant sugar industry, a politically sensitive
industry in the United States.
In non-agricultural products (excluding petroleum), Malaysia’s average MFN
tariff rate is 8.7% as compared with 4.0% in the United States. The ranges of tariff
rates are similar. In Malaysian sectors where the government is fostering the growth
of industry, however, the rates are particularly high. In transport equipment, in
particular, the average Malaysia tariff of 25.6% is nearly ten times the U.S. rate of
2.6%. In non-electrical machinery, a sector in which both countries currently export
to each other, the Malaysia tariff rate at 9.5% is four times the U.S. rate of 2.1%.
Similarly, in electrical machinery the Malaysia rate of 6.3% is double the U.S. rate
of 3.0%. The Malaysian rate, however, can reach 35% for some items. Most
industrial machinery enters Malaysia at 5% to 30%. Boilers and engines enter at 5%,
but air conditioners and refrigerators enter at 30%.
Average Applied Tariff Rates
Applied average tariff rates are derived by dividing the amount of customs
duties collected by the value of imports. Average applied tariff rates are good
indicators of a nation’s actual level of tariff protection. These rates may be somewhat
lower than the MFN rates because items with high rates might not be imported at all
(so no tariffs are paid) and because Malaysia has FTAs with other nations under
which the FTA partners pay lower or no tariffs on their exports to Malaysia. They
can also be higher if importers buy expensive items (such as machinery or
automobiles) subject to higher tariff rates.
For Malaysia, the average applied tariff rate of 8.4% is more than twice the U.S.
average rate of 3.7%.34 For all industrial goods, the applied rate is 9.1% in Malaysia
as compared with 3.7% in the United States. Table 3 shows Malaysian applied tariff
rates by industrial sector.
33 United Nations Trade Database (SITC Rev.3) accessed via the U.S. Department of
Commerce’s Trade Policy Information System.
34 Office of the United States Trade Representative. “Free Trade Agreement: U.S. and
Malaysia, Economic and Strategic Benefits.” Power Point presentation. March 8, 2006.
[http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2006/asset_upload_file802_
9121.pdf]

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CRS-13
Table 3. U.S. and Malaysian Average Applied Tariffs Rates for
Industrial Goods
Industrial Category
Malaysia
United States
All Industrial Goods
9.1%
3.7%
Wood, pulp, paper, and furniture
10.9%
0.7%
Textiles and clothing
13.5%
9.6%
Leather, rubber, footwear, and travel goods
14.0%
4.3%
Metals
9.3%
2.1%
Chemicals and photographic supplies
3.6%
3.4%
Transport equipment
18.5%
3.2%
Non-electric machinery
3.7%
1.2%
Electric machinery
6.7%
1.9%
Mineral products and precious stones
8.8%
2.0%
Manufactured articles not specified
5.1%
2.5%
Fish and fish products
2.4%
1.1%
Source: U.S. Trade Representative. “Free Trade Agreement: U.S. and Malaysia, Economic and
Strategic Benefits,” March 8, 2006.
Possible Issues
Free trade agreements reduce artificial barriers to trade and investment and,
thereby, change existing parameters that generate opportunities for making profits or
exerting market power. In addition to eliminating tariffs on both sides, FTAs usually
also eliminate or reduce import quotas and other non-tariff barriers to trade. They
also usually provide access to services, open markets for investment, contain
provisions strengthening protection of intellectual property, address certain types of
government regulations and practices, provide for a dispute settlement process, and
can touch on issues such as business visas, competition policy, and a variety of
policies or practices that affect economic activity. FTAs create gainers and losers as
border barriers and government strictures are lessened. In general, the ones who gain
tend to be exporters, investors, and consumers, while those who lose tend to be
companies and workers in import competing industries. For import-sensitive sectors,
the length of phase-out periods for existing protective measures can be a focus of
dispute.
The U.S. Trade Representative has identified certain specific issues related to
the potential U.S.-Malaysia FTA that are likely to require attention in the
negotiations. These include intellectual property rights, automobiles, services,
government procurement, and capital controls. Other issues may arise as the
negotiations progress.

---

CRS-14
Intellectual Property Rights
An issue of interest to U.S. exporters is Malaysian enforcement of intellectual
property rights (IPR). Malaysia has recently tightened its laws on and stepped up
enforcement of protection of intellectual property, but problems still remain. The
International Intellectual Property Association (IIPA) estimated 2004 industry losses
in Malaysia due to piracy at $188 million. IIPA estimated 2004 piracy rates at 63%
for business software, 52% for music, and 50% for movies.
Malaysia has remained on the Special 301 Watch List since October 2001 as
part of an effort by the USTR to monitor Malaysia’s efforts to improve its IPR
regime. In its 2006 Special 301 Report, the USTR stated that Malaysia has made
some significant improvements in IPR protection and enforcement but still has some
serious deficiencies. IPR enforcement improvements during 2005 included
conducting raids against pirate optical disc production facilities, seizing pirate goods
and machinery used to produce pirate materials, arresting IPR infringers, and
revoking or declining to renew licenses for pirate optical disc facilities. The USTR
also stated that trademark counterfeiting, including those of pharmaceuticals, is
rampant in Malaysia and that these issues are to be addressed in the FTA
negotiations.35
Opposition to the FTA negotiations has appeared in Malaysia among people
concerned about the treatment of HIV/AIDS. They claim that a U.S.-Malaysia FTA
would more than likely patent anti-retroviral AIDS drugs for five years, “making far
too costly for them [HIV/AIDS patients] to buy.”36 Others believe that stricter
enforcement of drug patents could discourage pharmaceutical companies from
introducing new anti-retroviral drugs in Malaysia.37
Automobiles
Malaysia has a booming automobile industry. Its automobile manufacturers,
such as Proton and Perodua, market their vehicles in over 40 countries around the
world, and its motorcycle manufacturer, Modenas, is a popular brand in Argentina,
Greece, Iran, Singapore, Malta, Mauritius, Turkey, and Vietnam. Malaysia’s
automobile components and parts industry is also quite successful on the world
market.
Malaysia has long protected its automobile manufacturing industry from foreign
competition using high tariffs and non-tariff trade barriers. Government policies also
distinguish between national cars (i.e., made by domestic producers, such as Proton
and Perodua) and non-national cars, which include most vehicles manufactured in
Malaysia by non-Malaysian owned firms. The firms making national cars, for
35 See U.S. Trade Representative. 2006 Special 301 Report, April 28, 2006.
36 “People with HIV/AIDS Hold Anti-FTA Protest,” by Soon Li Tsin, Malaysiakini, January
11, 2007.
37 Dass, Maria J. Groups Worried Over FTA with US. Sun2Surf.com, Malaysia.
September 11, 2006.

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CRS-15
example, receive 50% rebates on their excise taxes. Ethnic Malays (not Malaysians
of Chinese or other ethnic origin) also are favored in receiving permits to import or
distribute motor vehicles.
The government has, however, begun to dismantle some of its protections in
order to meet its commitments to the WTO and the ASEAN Free Trade Agreement.
In January 2004, the government completely eliminated local content requirements
that were inconsistent with its obligations under the WTO, but government policies
(particularly its excise taxes on automobiles) continue to block open trade in the
automotive sector. Malaysia imposes 30% tariffs on assembled vehicles from outside
the ASEAN region and up to 10% on completely knocked-down vehicle kits. Excise
taxes on both assembled vehicles and kits are 80-200% on automobiles, 55-160% on
multipurpose vehicles, and 10-50% on motorcycles.38
During negotiations, Malaysia is likely to raise the issue of U.S. measures
protecting domestic automobile industry. For example, the United States currently
maintains a special 25% tariff on imports of pickup trucks. In a May 2006 hearing,
a representative of the U.S. Automotive Trade Policy Council (representing the U.S.
big three automakers) said the Council supports the proposed FTA and sees it as an
opportunity to break into a market that has historically protected domestic producers
and discriminated against foreign manufacturers.39
Services
Financial services also appear to be a difficult issue to resolve in the
negotiations. Malaysia limits foreign ownership to 30% of commercial banks and
49% of investment banks. Foreign commercial banks also are allowed to open new
branches only if they also add other branches as directed by Bank Negara, Malaysia’s
central bank. Malaysia maintains a 51% cap on foreign ownership of insurance
companies already established in Malaysia prior to 1998 as well as a foreign
ownership limit of 30% for new entrants seeking access. Apparently Malaysia has
not actually enforced the 51% cap except in cases of companies who seek the right
to establish branches.40
In the lead-up to the launch of the FTA negotiations, Malaysia reportedly
attempted to keep financial services, a sensitive sector for the nation, out of the
negotiations completely, but the country did agree to include such services in the
FTA talks. Malaysia, however, has lifted requirements that foreign banks obtain 50%
of their credit from local banks, has allowed them to seek any amount of ringgit
(domestic currency) credit without approval, has allowed the ringgit exchange value
38 U.S. Trade Representative. 2006 National Trade Estimate Report on Foreign Trade
Barriers, March 31, 2006. Section on Malaysia.
39 “Administration Hears Industry Input on Priorities for Malaysia FTA,” Washington Trade
Daily (Online edition), May 5, 2006.
40 U.S. to Face Difficulties on Financial Services in Malaysia FTA Talks, Inside U.S. Trade,
March 10, 2006.

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CRS-16
to float rather than be strictly pegged to the dollar, and allowed foreign banks to open
four additional branches in 2006.41
In telecommunications, foreign companies are allowed to acquire up to a 30%
equity stake in existing fixed line operations. Value-added telecommunications
service suppliers likewise are limited to 30% foreign equity. These restrictions
arguably benefit the government-controlled firm, Telekom Malaysia.42
Licensed professionals, such as lawyers and architects, also are restricted in
Malaysia. Foreign lawyers may not practice Malaysian law nor affiliate with local
firms. Foreign law firms may take an operating stake of up to 30% in a local law
firm. A foreign architectural firm may operate in Malaysia only as a joint venture
participant in a specific project, and foreign architects may not be licensed in
Malaysia. Foreign engineers may be licensed only for specific projects. Foreign
accounting firms must work through Malaysian affiliates.43
In services, the United States has used the negative list approach in determining
which sectors are excluded from the agreement.44 However, Malaysia prefers to use
a positive list approach in which service sectors are excluded unless listed in the
agreement.
Government Procurement
Malaysia is not a signatory of the WTO Government Procurement Agreement.
As part of its “New Economic Program,” Malaysia seeks raise the participation of
bumiputera (ethnic Malays) in the economy. Foreign companies, in many cases, are
required to take on a local partner before their bids are considered. The awarding
process for procurement contracts also is considered to be non-transparent.45
After the second round of negotiations in July 2006, it became apparent that
Malaysian government procurement restrictions that reserve a certain share of
Malaysian business for ethnic Malays were emerging as a major sticking point in the
negotiations. Malaysian negotiators reportedly had not been authorized by the
Malaysian cabinet to agree to an opening of the government procurement market.46
41 U.S. Trade Representative. 2006 National Trade Estimate Report on Foreign Trade
Barriers, March 31, 2006. Section on Malaysia.
42 Ibid.
43 Ibid.
44 The negative list of sectors closed to foreign investment, for example, may include
airports, social insurance, or other sectors that are run by governments or have special
security requirements.
45 Ibid.
46 Government Procurement Emerging as Major Problem in U.S.-Malaysia FTA. Inside US
Trade, September 1, 2006.

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CRS-17
Capital Controls
Malaysia has lifted most of the controls on capital it imposed during the 1997-
98 Asian financial crisis. The purpose of the controls was to keep capital,
particularly funds invested in securities or in businesses from being taken out of the
country (or converted to dollars) during the crisis. Concern remains, however, with
respect to a future crisis and whether a U.S. investor would be able to repatriate
capital. Both the U.S.-Singapore and U.S.-Chile FTAs have provisions that address
this issue primarily by allowing an investor who is harmed by such controls to sue
for damages.
Trade Flows
FTAs usually have several distinct effects on trade flows. They tend to divert
export and import trade toward the countries involved, but they also can create more
trade overall by lowering tariffs and other trade barriers. For example, the North
American Free Trade Agreement (NAFTA) has tended to divert some trade from
Asia to North America. Certain U.S. importers have turned to suppliers in Mexico
rather than buying from Asia, and some manufacturers from Asia have relocated to
Mexico to take advantage there of tariff-free access to the North American market.
At the same time, the existence of a barrier-free North American market has tended
to generate business efficiencies as companies gain from economies of large-scale
production and distribution. This has tended to create more trade overall.47 FTAs
also can cause a substitution effect as imports are substituted for domestic
production. In that case, import-competing industries may suffer and may require
assistance to adjust to increased competition from imports.
Table 4 shows U.S. exports to, imports from, and the balance of merchandise
trade with Malaysia from 2000 to 2006, according to the U.S. Department of
Commerce. U.S. exports to Malaysia remained steady at about $10 billion per year
from 2000 to 2005, but rose to over $11 billion in the first 11 months of 2006. U.S.
imports grew by more than 34% over the same period. This has caused the U.S.
figure for the trade deficit with Malaysia to rise from $14 billion in 2000 to nearly
$23 billion so far in 2006.
47 For further information, see CRS Report RL31356, Free Trade Agreements: Impact on
U.S. Trade and Implications for U.S. Trade Policy, by William H. Cooper.

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CRS-18
Table 4. U.S. Trade with Malaysia, 2000 to 2006
(Million Dollars; U.S. trade figures)
Year
U.S. Exports
U.S. Imports
U.S. Balance
2000
10,957.48
25,568.20
-14,610.72
2001
9,357.69
22,340.35
-12,982.66
2002
10,343.65
24,008.94
-13,665.29
2003
10,914.06
25,440.20
-14,526.14
2004
10,921.72
28,178.87
-17,257.15
2005
10,460.83
33,685.16
-23,224.33
2006*
11,637.08
34,298.80
-22,661.72
Source: Data from U.S. Department of Commerce
* through November
As shown in Table 5, the United States is Malaysia’s top export market,
according to Malaysian export data. Singapore is second, Japan is third, and China
is fourth. The United States is a steady market for Malaysia. In 2004, 18.8% of
Malaysia’s exports went to the United States. In 2005, the U.S. share of Malaysia’s
exports rose to 19.7%. For the first nine months of 2006, 19.0% of its exports were
shipped to the United States.
Table 5. Malaysia’s Merchandise Exports by Top 10 Trading
Partners
2004
2005
2006
Partner
Ringgits
U.S. $
Ringgits
U.S. $
U.S. $
Ringgits
(Billions) (Billions) (Billions) (Billions)
(Billions)
World Total
480.722
137.349
533.790
152.511
436.479
124.708
United States
90.182
25.766
105.033
30.009
82.761
23.646
Singapore
72.176
20.622
83.333
23.809
69.306
19.802
Japan
48.553
13.873
49.918
14.262
38.217
5.658
China
32.143
9.184
35.225
10.064
30.939
8.840
Thailand
22.954
6.558
28.723
8.207
23.061
6.589
Hong Kong
28.686
8.196
31.205
8.916
22.300
6.371
South Korea
16.839
4.811
17.945
5.127
15.799
4.514
Netherlands
15.752
4.501
17.452
4.986
15.214
4.347
Taiwan
17.763
5.075
14.813
4.232
11.913
3.404
Indonesia
11.677
3.336
12.580
3.594
10.534
3.010
Source: Department of Statistics, Malaysia.
Note: 2006 figures through September; U.S. dollar equivalent calculated using exchange rate of 3.5
ringgits = 1 U.S. dollar

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CRS-19
As shown in Table 6, Japan is Malaysia’s top source of imports, while the
United States is second with China and Singapore competing for third. Malaysia
already has an FTA with Singapore and is negotiating one with Japan. The proposed
FTA with the United States would place U.S. exporters on the same footing as
exporters from Singapore, Japan, and other nations that have FTAs with Malaysia,
and may increase U.S. exports to Malaysia.
Table 6. Malaysia’s Merchandise Imports by Top 10 Trading
Partners
2004
2005
2006
Partner
Ringgits
U.S. $
Ringgits
U.S. $
Ringgits
U.S. $
(Billions) (Billions) (Billions)
(Billions) (Billions) (Billions)
World
399.648
114.185
434.030
124.009
358.917
102.548
Japan
63.693
18.198
63.000
18.000
48.007
13.716
United States
57.752
16.501
55.918
15.977
46.609
13.317
China
39.279
11.223
49.879
14.251
43.027
12.293
Singapore
44.437
12.696
50.831
14.523
41.640
11.897
Thailand
21.992
6.283
22.889
6.540
19.596
5.600
South Korea
19.844
5.670
21.604
6.173
18.928
5.408
Taiwan
21.630
6.180
23.973
6.849
18.743
5.355
Germany
17.798
5.085
19.265
5.504
15.055
4.301
Indonesia
15.936
4.553
16.566
4.733
14.055
4.016
Hong Kong
10.850
3.100
10.797
3.085
9.280
2.651
Source: Department of Statistics, Malaysia.
Note: 2006 figures through September; U.S. dollar equivalent calculated using exchange rate of 3.5
ringgits = 1 U.S. dollar
The United States already is Malaysia’s top export market. A U.S.-Malaysia
FTA would likely reinforce this relationship. The United States, however, already
has low tariff rates for Malaysia exports, so eliminating U.S. tariffs may have little
effect on U.S. imports of Malaysian products.
Outcomes from Recent Bilateral Negotiations
The United States and Malaysia held their fourth round of bilateral negotiations
regarding the FTA in San Francisco from January 8 to 12, 2007. The chief U.S.
negotiator, Assistant Trade Representative for Asia and the Pacific Barbara Weisel,
indicated that she expects a fifth and final round of talks will be held in early

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CRS-20
February in Malaysia, thereby completing the negotiations before the March
deadline.48
However, Malaysia’s International Trade and Industry Minister Datuk Seri
Rafidah Aziz had a less optimistic appraisal of the negotiation’s progress and the
prospects of finishing the FTA in time for the Bush Administration’s March 31
deadline. In a press interview on January 18, 2007, Minister Aziz said, “I doubt it
very much because July is only a few months away and we are not negotiating every
week. This is a serious broad-based discussion. I am not very optimistic.”49
For the U.S. delegation, the key issues for the San Francisco talks were IPR
protection in Malaysia, Malaysia’s “New Development Policy” that gives preferential
employment and contract treatment to ethnic Malays, market access for key U.S.
merchandise exports, and liberalization of key service sectors. For Malaysia, the chief
issues were safeguards against a surge in U.S. imports and market access, particularly
in the service sectors.
Market access for U.S. merchandise exports continues to be an issue. During the
third round of talks, there was an exchange of initial offers for agricultural access that
one U.S. official termed “a solid basis for continued negotiations.”50 However,
according to Malaysia’s Agricultural Minister, Tan Sri Muhyiddin Yassin, rice and
tobacco are on Malaysia’s exclusion list in its negotiations, indicating Malaysia’s
desire to keep its trade barriers against these two agricultural imports. The minister
reported said, “Whatever happens, if rice is the cause for the FTA not to be signed,
then let it be because the government will not compromise on anything that can affect
the interests of our farmers.”51 Besides agricultural goods, there are still issues to be
resolved regarding trade in textiles and automobiles.
Another continuing issue is finding a common approach to negotiating market
access for services. The United States wishes to use a “negative approach” under
which all service sectors would be covered by the FTA unless explicitly excluded
from the agreement. Malaysia wishes to base the talks on a “positive approach”
where only those sectors explicitly mentioned in the agreement are covered by the
FTA. Observers indicate that Malaysia is particularly concerned about the impact of
U.S. access to Malaysia’s financial services market.
Regarding Malaysia’s “New Development Policy,” sources indicate little
flexibility from Malaysia. According to Minister Rafidah, Malaysia is “standing
48 “U.S., Malaysia in Bay Area Talks over Trade Pact,” by David Armstrong, San Francisco
Chronicle, January 12, 2007. The dates for the fifth round of talks — February 5-9, 2007
— were set soon after her interview.
49 “Rafidah: Malaysia-US FTA Talks Unlikely to be Completed by July 2007,” FTA
Malaysia, January 18, 2007.
50 “US Sees ‘Real Interest’ in Free Trade Deals with Malaysia, South Korea,” Agence
France Presse, January 9, 2007.
51 “Tobacco, Rice Excluded in FTA Negotiations with the US,” by Mergawati Zulfakar, The
Star, January 15, 2007.

---

CRS-21
firm” on this issue, and it is an area where [Malaysia] could not compromise and this
is known by the U.S. side.”52 However, Assistant Trade Representative Weisel
indicated that while the United States recognizes that Malaysia will not completely
eliminate its preference policy, it still believes that there are ways of opening some
key sectors — such as telecommunications, financial services, express delivery,
computers, and energy distribution — to U.S. companies.53
Conditions for the fifth round of talks were complicated at the end of January
with the news of a $16 billion energy development deal between Malaysia’s SKS
Group and the National Iranian Oil Company that would develop Iranian gas fields
and build liquefied natural gas plants.54 During a House Committee on Foreign
Affairs Hearing on January 31, 2007, Chairman Tom Lantos (Democrat, California)
called the deal “abhorrent,” and sent a letter to U.S. Trade Representative Susan
Schwab requesting the suspension of negotiations on the proposed FTA until
Malaysia renounced the deal with Iran.55 U.S. Trade Representative Schwab
indicated that she intended to continue the negotiations with Malaysia.56
Malaysia sharply rejected the call to revoke the energy deal with Iran.
Malaysia’s Minister of International Trade and Industry Seri Rafidah Aziz reportedly
said that the United States has no right to block Malaysia trading with any country,
even after the conclusion of the proposed FTA.57 Malaysia’s Prime Minister Badawi
also was firm on the issue, “We reject the pressure being inflicted upon us.... Do not
bring any political matters into trade.”
Legislative Requirements
Free trade agreements normally are considered by Congress under expedited
procedures. These provisions are contained in the act providing Trade Promotion
Authority to the President (P.L. 107-210) and other trade laws. The requirements
include the following:58
! before entering into any agreement, the President is required to
consult with certain Congressional bodies and to submit a report on
52 “Rafidah: Malaysia-US FTA Talks Unlikely to be Completed by July 2007,” FTA
Malaysia, January 18, 2007.
53 “U.S.-Malaysia Trade Deal Possible by March: USTR,” by Doug Palmer, New York
Times, January 12, 2007.
54 “Malaysia Stands by Iranian Gas Deal,” BBC News, February 2, 2007.
55 “Remarks by Congressman Tom Lantos, Chairman, House Committee on Foreign Affairs,
at Hearing, ‘Understanding the Iran Crisis,’” January 31, 2007.
56 Reported in Washington Trade Daily, February 5, 2007.
57 “Malaysia Defends State Despite U.S. Threat to Halt FTA Talks,” Bernama - Malaysian
National News Agency, February 2, 2007
58 For detail, see CRS Report RL32011, Trade Agreements: Procedure for Congressional
Approval and Implementation, by Vladimir N. Pregelj.

---

CRS-22
the possible effect of the agreement on U.S. trade remedy laws; at
least 90 calendar days before entering into a trade agreement, the
President must notify Congress of the intent to enter into the
agreement.59
! at least 90 calendar days before entering into the trade agreement,
the President must notify the revenue committees of possible
changes to U.S. trade remedy laws (report submitted on December
27, 2006);60 no later than 30 days after the President notifies
Congress of the intention to enter into a trade agreement, private
sector advisors must submit their reports on the agreement;
! within 60 days of entering into a trade agreement, the President must
submit to Congress a description of changes to existing laws; not
later than 90 days after the President enters into an agreement, the
International Trade Commission must submit a report assessing the
likely impact of the agreement;61
! after entering into an agreement, the President is required to submit
to Congress the final legal text of the agreement62 together with a
draft of the implementing bill, a statement of any administrative
action proposed to implement the agreement, and sundry supporting
information; since the implementing bill is not amendable, the
relevant committees in Congress hold hearings and “mock” mark-
ups on the draft bill for changes reflecting congressional concerns
regarding the agreement and the final language of the legislation to
be transmitted to Congress formally for legislative action;
! if a committee to which the bill has been referred has not reported it
within 45 days after its introduction, such committee is
automatically discharged from its further consideration, and the bill
is placed on the appropriate calendar; in both houses, floor debate on
the bill is limited to 20 hours; and
! the vote by simple majority on final passage of the bill must be taken
on or before the 15th day after the bill has been reported.
59 Since the President’s Trade Promotion Authority expires on July 1, 2007, the President
arguably must notify the Congress of his intent to enter into an FTA with Malaysia before
April 2, 2007 (unless the Trade Promotion Authority is extended).
60 U.S. Trade Representative. Report on Proposals Advanced in Negotiations on a Free
Trade Agreement with Malaysia That May Require Amendments to United States Trade
Remedies Laws. December 27, 2006.
61 On March 24, 2006, the U.S. International Trade Commission announced that it was
instituting investigations (TA-131-33 and TA-2104-22) entitled: U.S.-Malaysia Free Trade
Agreement: Advice Concerning the Probable Economic Effect of Providing Duty-Free
Treatment for Imports.
62 After negotiations are complete, the “legal scrubbing” of the text usually takes a certain
amount of time before the final legal text is submitted to Congress.

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CRS-23
Policy Options
Until the negotiations with Malaysia on the proposed FTA are complete, the
legislative policy options include consultations with the Executive Branch, holding
oversight hearings on pertinent U.S. trade policy and relations with Malaysia and
other nations, and working with interest groups that either support or oppose the
proposed agreement. Public Law 107-210 (Section 2104) provides for close
consultations with the Executive Branch during and following the negotiations (as
noted above). Such consultations may lead to changes in the draft agreement before
it is signed.
Once the treaty is negotiated and the Executive provides Congress with draft
implementing legislation, the House Ways and Means and Senate Finance
Committees may hold mock markup hearings on the draft implementing legislation
and, if approved, may include non-binding amendments. The White House may
consider adding such amendments to the final version of the implementing bill.
In the FTA with Central America and the Dominican Republic, for example, the
House Ways and Means Committee voted to approve the draft legislation but also
added a non-binding amendment requiring the Administration to report on activities
conducted by countries in question to build capacity on labor issues and to monitor
the effects of the FTA on U.S. service industries. The final implementing bill
included such reporting requirements.63
The U.S.-Singapore FTA contained an Integrated Sourcing Initiative [Article
3.2(1-2)] that allowed certain information technology and medical products to be
treated as being of Singapore origin under specific conditions even if they were
manufactured in neighboring Indonesian areas. Critics of the initiative as originally
drafted pointed out, however, that the provision potentially could have been used by
exporters from other nations, such as China, by shipping their goods through
Singapore. In response to this concern, some draft language was deleted from the
agreement. The implementing legislation also established the need for congressional
approval for the expansion of the list of products covered under the Initiative.64
Congress also may choose not to approve the FTA implementing legislation.
Congress also may consider the proposed agreement in conjunction with other FTAs
and the Doha Round of trade negotiations under the WTO — now stalled but which
may be restarted. The U.S. Trade Representative seems confident that all
negotiations can go forward concurrently, but in April 2006, House Ways and Means
Committee Chairman Bill Thomas reportedly called on the Bush Administration to
take its focus off the Doha trade negotiations and instead focus its energies on
completing ongoing bilateral FTAs.65
63 See CRS Report RL31870, The Dominican Republic-Central America-United States Free
Trade Agreement (CAFTA-DR), by J. F. Hornbeck.
64 See CRS Report RL31789, The U.S.-Singapore Free Trade Agreement, by Dick K. Nanto.
65 “Thomas Urges USTR to Shift From Lagging Doha Round to Completing FTAs.” Inside
(continued...)

---

CRS-24
Legislation
110th Congress
At the time this report was updated, there were no bills introduced directly
related to Malaysia and/or negotiations of a free trade agreement with Malaysia.
However, there is proposed legislation, H.R. 294, that would “prohibit the entry
into any bilateral or regional trade agreement, and to prohibit negotiations to enter
into any such agreement, for a period of 2 years.” The bill was introduced by
Representative Dale E. Kildee (D-MI) and co-sponsored by Representative Walter
B. Jones, Jr. (R-NC). The bill was referred to the House Ways and Means
Committee.
65 (...continued)
U.S. Trade, April 7, 2006.

---

CRS-25
Appendix A. Chronology66
2007
February 5
Fifth Round of negotiations scheduled begin in Kota
Kinabalu, Sabah, Malaysia.
January 8
Fourth Round of negotiations begin in San Francisco.
2006
December 27
The Administration reported that it was not likely to ask
Congress to substantially change U.S. import laws (trade
remedies laws) due to negotiations on a free trade agreement
with Malaysia.
October 30
Third Round of negotiations commenced in Malaysia.
Government procurement was a major point of contention.
September 18
Third Round of negotiations scheduled for September were
postponed to October 30.
July 17-21
The second round of negotiations were held. Twenty-two
negotiating groups met and discussed issues and draft texts.
June 12-14
The First Round of the Malaysia-US FTA talks held in
Malaysia.
May 3
The interagency Trade Policy Staff Committee convened a
public hearing to seek public comment to assist the USTR in
amplifying and clarifying negotiating objectives for the proposed
U.S.-Malaysia FTA and to provide advice on how specific goods
and services and other matters should be treated under the
proposed agreement.
The U.S. International Trade Commission began hearings on the
proposed U.S. Malaysia FTA.
April 4
The U.S. Trade Representative sent a letter to the Committee on
Ways and Means transmitting a report on the intent to initiate
negotiations for a free trade agreement between the United
States and Malaysia.
March 31
The Trade Policy Staff Committee gave notice that the U.S.
Trade Representative and the Department of Labor are initiating
a review of the impact of a proposed free trade agreement
between the United States and Malaysia on U.S. employment,
including labor markets.
66 This chronology is based on various news reports, press releases, and notifications.

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CRS-26
March 30
The U.S. International Trade Commission announced that it had
instituted (as of March 24) investigation [Nos. TA-131-33 and
TA-2104-22] entitled U.S.-Malaysia Free Trade Agreement:
Advice Concerning the Probable Economic Effect of Providing
Duty-Free Treatment for Imports. The request for the
investigation was received from the USTR on March 17, 2006.
March 8
The U.S. Trade Representative announced and notified Congress
of the Bush Administration’s intent to negotiate a free trade
agreement between the United States and Malaysia.

---

CRS-27
Appendix B. U.S. Exports of Merchandise to
Malaysia by Two-Digit Harmonized System Codes,
2004-2006
(Million U.S. Dollars)
HS
Description
2004
2005
2006*
Total Exports to Malaysia
10,921.22
10,450.92
11,637.08
01
Live Animals
0.61
2.26
2.23
02
Meat
2.15
3.35
1.82
03
Fish and Seafood
2.97
3.05
5.69
04
Dairy, Eggs, Honey, etc
24.13
33.48
45.00
05
Other of Animal Origin
0.08
0.17
0.24
06
Live Trees and Plants
0.01
0.00
0.01
07
Vegetables
3.91
5.51
5.77
08
Edible Fruit and Nuts
105.48
117.62
86.02
09
Spices, Coffee and Tea
0.54
0.80
0.73
10
Cereals
15.61
29.80
21.94
11
Milling; Malt; Starch
1.96
1.52
1.42
12
Misc Grain, Seed, Fruit
61.41
26.24
57.19
13
Lac; Vegetable Sap, Extrct
1.76
2.08
1.73
14
Other Vegetable
0.02
0.00
0.01
15
Fats and Oils
2.04
1.66
1.67
16
Prepared Meat, Fish, etc
0.33
1.04
0.79
17
Sugars
6.68
7.23
8.42
18
Cocoa
3.35
4.93
3.16
19
Baking Related
4.34
5.22
4.19
20
Preserved Food
23.58
23.15
22.19
21
Miscellaneous Food
41.30
46.68
44.71
22
Beverages
5.09
4.04
4.39
23
Food Waste; Animal Feed
33.75
37.24
36.80
24
Tobacco
35.16
27.90
18.16
25
Salt; Sulfur; Earth, Stone
8.53
4.46
7.84
26
Ores, Slag, Ash
3.78
3.99
4.29
27
Mineral Fuel, Oil Etc
28.54
30.29
41.37
28
Inorg Chem; Rare Earth metals
48.98
61.95
66.63
29
Organic Chemicals
147.82
113.10
95.72

---

CRS-28
HS
Description
2004
2005
2006*
30
Pharmaceutical Products
24.99
29.93
37.50
31
Fertilizers
6.60
5.96
5.14
32
Tanning, Dye, Paint, Putty
16.84
20.29
15.89
33
Perfumery, Cosmetics, etc
32.21
29.73
33.94
34
Soap, Wax, etc; Dental Prep
25.56
27.74
30.08
35
Albumins; Mod Starch; Glue
9.20
8.03
9.64
36
Explosives
5.94
3.57
3.41
37
Photographic/Cinematography
3.20
4.55
4.07
38
Misc. Chemical Products
67.02
76.79
68.84
39
Plastic
217.22
222.21
192.12
40
Rubber
16.04
34.11
42.30
41
Hides and Skins
0.15
0.11
0.08
42
Leather Art; Saddlery; Bags
1.92
2.55
2.78
43
Furskin+ Artificial Fur
0.00
0.00
0.01
44
Wood
38.80
30.13
26.86
45
Cork
0.05
0.11
0.04
46
Straw, Esparto
0.16
0.00
0.00
47
Woodpulp, Etc.
24.95
26.39
25.01
48
Paper, Paperboard
63.43
71.67
62.13
49
Book+ Newspaper; Manuscript
15.94
20.11
16.47
50
Silk; Silk Yarn, Fabric
0.45
0.32
0.39
51
Animal Hair+ Yarn, Fabrc
0.03
0.01
0.00
52
Cotton+ Yarn, Fabric
7.20
5.41
7.22
53
Other Veg Textile Fiber
0.01
0.01
0.01
54
Manmade Filament, Fabric
3.92
4.00
2.49
55
Manmade Staple Fibers
3.27
2.47
2.48
56
Wadding, Felt, Twine, Rope
9.90
14.73
6.56
57
Textile Floor Coverings
0.62
0.17
0.42
58
Spcl Woven Fabric, Etc
1.17
0.50
0.97
59
Impregnated Text Fabrics
3.27
3.86
2.67
60
Knit, Crocheted Fabrics
0.18
0.27
0.09
61
Knit Apparel
0.64
0.81
0.29
62
Woven Apparel
1.67
2.38
1.26
63
Misc Textile Articles
3.41
6.97
8.86
64
Footwear
0.44
0.81
0.64

---

CRS-29
HS
Description
2004
2005
2006*
65
Headgear
0.09
0.33
0.13
66
Umbrella, Walk-sticks, Etc
0.00
0.00
0.00
67
Artif Flowers, Feathers
0.00
0.00
0.02
68
Stone, Plaster, Cement, Etc
6.32
11.65
14.39
69
Ceramic Products
11.67
9.54
3.88
70
Glass and Glassware
25.04
27.00
27.51
71
Precious Stones, Metals
37.22
37.08
43.94
72
Iron and Steel
96.20
121.28
192.50
73
Iron/steel Products
28.79
28.00
30.43
74
Copper+ Articles Thereof
29.76
27.39
27.65
75
Nickel+ Articles Thereof
3.23
3.02
3.52
76
Aluminum
44.65
43.46
40.12
78
Lead
3.01
4.43
2.94
79
Zinc+ Articles Thereof
0.13
0.56
1.52
80
Tin + Articles Thereof
0.67
0.05
5.84
81
Other Base Metals, Etc.
6.40
7.84
13.81
82
Tool, Cutlery, of Base Metals
19.64
22.48
24.31
83
Misc Art of Base Metal
29.04
8.57
9.07
84
Machinery
1,376.21
1,744.84
1,551.72
85
Electrical Machinery
6,501.82
5,985.67
6,614.87
86
Railway; Trf Sign eq
8.18
5.48
3.22
87
Vehicles, Not Railway
12.21
15.76
12.37
88
Aircraft, Spacecraft
580.89
255.76
789.58
89
Ships and Boats
0.64
10.52
1.21
90
Optic, Not 8544; Medical Instr
637.54
567.78
766.51
91
Clocks and Watches
1.00
1.27
0.84
92
Musical Instruments
0.77
1.20
1.79
93
Arms and Ammunition
1.11
1.25
2.09
94
Furniture and Bedding
11.04
29.79
12.68
95
Toys and Sports Equipment
15.27
19.25
18.20
96
Miscellaneous Manufactures
3.40
2.53
5.99
97
Art and Antiques
0.14
0.17
0.34
98
Special Other
208.76
201.45
213.25
Source of data: U.S. Dept. of Commerce, Bureau of Census.
*Note: 2006 data through November

---

CRS-30
Appendix C. U.S. Imports of Merchandise from
Malaysia by Two-Digit Harmonized System Codes,
2004-2006
(Million U.S. dollars, customs values)
HS
Description
2004
2005
2006*
Total Imports from Malaysia
28,178.87
33,703.16
34,298.80
01
Live Animals
0.15
0.15
0.12
02
Meat
0.00
0.00
0.00
03
Fish and Seafood
119.03
124.08
138.35
04
Dairy, Eggs, Honey, etc
0.69
0.77
0.26
05
Other of Animal Origin
0.06
0.05
0.11
06
Live Trees and Plants
0.49
0.61
0.75
07
Vegetables
0.20
0.28
0.11
08
Edible Fruit and Nuts
0.02
0.03
0.00
09
Spices, Coffee and Tea
1.36
1.69
2.47
10
Cereals
0.05
0.04
0.10
11
Milling; Malt; Starch
0.09
0.12
0.03
12
Misc Grain, Seed, Fruit
0.05
0.14
0.28
13
Lac; Vegetable Sap, Extract
0.04
0.14
0.26
14
Other Vegetable
0.02
0.05
0.02
15
Fats and Oils
263.23
319.93
398.72
16
Prepared Meat, Fish, etc
26.35
17.64
17.58
17
Sugars
0.28
0.94
0.54
18
Cocoa
110.04
112.26
106.59
19
Baking Related
8.15
9.68
10.52
20
Preserved Food
8.44
7.77
8.05
21
Miscellaneous Food
5.07
8.95
19.13
22
Beverages
1.87
3.59
6.37
23
Food Waste; Animal Feed
0.60
0.55
3.59
24
Tobacco
1.78
0.93
0.00
25
Salt; Sulfur; Earth, Stone
0.16
0.10
0.18
26
Ores, Slag, Ash
5.36
8.99
10.29
27
Mineral Fuel, Oil Etc
573.69
507.04
441.27
28
Inorg Chem; Rare Earth mt
4.33
14.07
3.58
29
Organic Chemicals
100.59
96.54
85.53
30
Pharmaceutical Products
1.71
1.09
2.43

---

CRS-31
HS
Description
2004
2005
2006*
31
Fertilizers
4.70
12.26
14.71
32
Tanning, Dye, Paint, Putty
8.27
17.08
14.14
33
Perfumery, Cosmetic, etc
4.01
3.45
4.14
34
Soap, Wax, Etc; Dental Prep
16.56
18.92
22.76
35
Albumins; Mod Starch; Glue
0.95
0.70
0.61
36
Explosives
0.00
0.00
0.00
37
Photographic/Cinematography
6.44
1.48
3.18
38
Misc. Chemical Products
156.12
170.24
187.00
39
Plastic
93.28
138.90
172.60
40
Rubber
609.66
680.64
786.12
41
Hides and Skins
0.35
0.14
0.27
42
Leather Art; Saddlery; Bags
2.89
5.15
11.67
43
Furskin+ Artificial Fur
0.00
0.00
0.00
44
Wood
341.91
340.96
412.95
45
Cork
0.05
0.01
0.02
46
Straw, Esparto
0.16
0.17
0.03
47
Woodpulp, Etc.
0.00
0.00
0.00
48
Paper, Paperboard
12.02
17.53
18.57
49
Book+ Newspaper; Manuscript
16.93
20.95
19.73
50
Silk; Silk Yarn, Fabric
0.01
0.00
0.00
51
Animal Hair+ Yarn, Fabric
1.13
0.58
0.28
52
Cotton+ Yarn, Fabric
22.29
12.40
11.66
53
Other Vegetable Textile Fiber
0.01
0.01
0.02
54
Manmade Filament, Fabric
15.29
16.43
17.38
55
Manmade Staple Fibers
3.87
2.99
10.17
56
Wadding, Felt, Twine, Rope
13.06
11.66
12.04
57
Textile Floor Coverings
0.05
0.05
0.18
58
Special Woven Fabric, Etc
1.48
2.05
3.28
59
Impregnated Text Fabrics
0.31
0.53
0.60
60
Knit, Crocheted Fabrics
0.20
0.03
0.11
61
Knit Apparel
436.05
437.03
426.88
62
Woven Apparel
294.87
262.44
261.66
63
Misc Textile Articles
5.11
7.73
5.57
64
Footwear
1.66
1.68
2.69
65
Headgear
4.64
3.36
2.96

---

CRS-32
HS
Description
2004
2005
2006*
66
Umbrella, Walking-sticks, Etc
0.02
0.01
0.00
67
Artificial Flowers, Feathers
0.03
0.01
0.00
68
Stone, Plaster, Cement, Etc
2.76
3.49
2.65
69
Ceramic Products
34.14
30.48
33.11
70
Glass and Glassware
12.67
5.92
8.94
71
Precious Stones, Metals
23.89
30.08
29.55
72
Iron and Steel
125.97
133.33
312.14
73
Iron/steel Products
74.15
80.38
116.23
74
Copper+ Articles Thereof
38.67
55.52
84.71
75
Nickel+ Articles Thereof
0.08
0.00
0.42
76
Aluminum
52.85
51.26
36.55
78
Lead
0.06
0.01
0.03
79
Zinc+articles Thereof
1.27
1.55
0.89
80
Tin + Articles Thereof
57.40
16.03
4.09
81
Other Base Metals, etc.
0.22
0.05
1.57
82
Tools, Cutlery, of Base Metals
4.98
5.34
4.60
83
Misc Art of Base Metal
17.97
21.24
20.96
84
Machinery
11,415.15
12,920.13
13,779.11
85
Electrical Machinery
11,093.11
14,793.85
13,755.33
86
Railway; Trf Sign eq
0.75
0.44
0.89
87
Vehicles, Not Railway
29.88
28.11
30.36
88
Aircraft, Spacecraft
16.09
20.69
25.29
89
Ships and Boats
17.79
19.78
28.95
90
Optic, not 8544; Medical Instr
552.51
619.15
708.34
91
Clocks and Watches
7.64
6.87
1.79
92
Musical Instruments
1.39
2.15
1.96
93
Arms and Ammunition
0.30
0.40
0.41
94
Furniture and Bedding
650.83
758.94
913.30
95
Toys and Sports Equipment
101.96
102.81
90.03
96
Miscellaneous Manufactures
20.14
24.35
24.69
97
Art and Antiques
0.10
0.19
0.46
98
Special Other
307.91
296.95
348.63
99
Other Special Impr Provisions
208.03
247.88
251.57
Source of data: U.S. Dept. of Commerce, Bureau of Census.
*Note: 2006 data through November

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CRS-33
Appendix D. U.S. Merchandise Exports by State to
Malaysia, 2004-2006
(U.S. Dollars)
State
2004
2005
2006*
U.S. Total
10,896,754,885
10,450,923,341
9,636,948,397
Alabama
27,160,270
24,425,479
23,030,889
Alaska
2,000,206
1,813,626
1,658,712
Arizona
744,014,007
778,635,471
643,246,707
Arkansas
15,263,079
12,050,640
6,750,175
California
2,002,388,800
1,942,191,137
1,836,705,489
Colorado
309,549,133
246,070,261
199,126,587
Connecticut
115,406,682
114,754,076
124,769,249
Delaware
8,580,453
12,072,472
7,712,813
District of Columbia
5,640,896
6,039,473
2,943,921
Florida
203,539,271
231,743,583
140,472,855
Georgia
85,386,931
84,660,541
48,408,085
Hawaii
96,903
7,930,844
2,655,724
Idaho
76,218,522
150,169,568
117,709,656
Illinois
261,480,753
233,014,823
240,210,407
Indiana
70,243,195
75,637,157
56,290,414
Iowa
31,229,324
34,417,553
24,664,812
Kansas
12,203,078
43,921,675
23,190,348
Kentucky
101,566,265
105,452,644
74,091,720
Louisiana
86,285,530
93,281,049
76,603,382
Maine
338,618,230
364,620,488
497,635,295
Maryland
21,166,814
20,541,456
16,246,256
Massachusetts
647,796,147
617,424,506
421,174,944
Michigan
107,150,107
76,433,815
44,719,331
Minnesota
125,381,273
185,478,087
149,116,584
Mississippi
6,050,965
7,761,611
6,558,527
Missouri
39,145,703
53,055,452
36,222,219
Montana
7,115,256
7,299,633
4,973,316
Nebraska
10,647,856
7,694,801
8,407,578
Nevada
20,619,915
36,558,369
43,925,350
New Hampshire
28,324,662
23,599,334
24,263,952

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CRS-34
State
2004
2005
2006*
New Jersey
68,544,266
79,902,011
45,541,796
New Mexico
224,757,438
342,690,777
356,299,680
New York
262,615,745
239,089,398
202,971,187
North Carolina
224,306,679
182,297,150
106,631,033
North Dakota
1,693,282
1,042,341
612,687
Ohio
95,680,748
119,244,964
59,522,457
Oklahoma
10,676,189
16,839,087
10,756,640
Oregon
496,119,486
914,641,433
965,433,912
Pennsylvania
169,800,898
169,153,558
136,755,567
Puerto Rico
12,850,147
23,768,292
15,436,526
Rhode Island
10,376,932
15,151,515
7,058,785
South Carolina
53,346,819
71,598,593
53,981,605
South Dakota
5,570,883
6,527,987
3,789,855
Tennessee
77,969,653
128,416,941
120,587,248
Texas
2,552,312,853
1,755,128,948
1,499,430,772
Utah
39,977,110
49,548,407
23,380,976
Vermont
102,461,173
123,452,142
140,450,419
Virgin Islands
0
120,041
6,680,464
Virginia
146,447,729
86,692,347
45,293,645
Washington
559,023,402
214,293,330
686,136,327
West Virginia
12,735,157
23,059,667
6,850,720
Wisconsin
77,893,113
119,143,320
95,617,826
Wyoming
12,875,861
17,680,970
10,708,248
Unallocated
168,449,096
152,690,498
133,534,725
Source: U.S. Department of Commerce.
Note: 2006 figures through September.

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