Order Code RL33445
The Proposed U.S.-Malaysia
Free Trade Agreement
Updated January 25, 2008
Michael F. Martin
Analyst in Asian Political Economy
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. Since
June 2006, six rounds of negotiations (alternating between the two countries) have
been held. The sixth round was held in Kuala Lumpur on January 14-17, 2008.
Despite missing the March 31, 2007 deadline in order for Congress to consider the
proposed FTA before the Administration’s Trade Promotion Authority expired on
July 1, 2007, both the United States and Malaysia remain committed to a successful
completion of the negotiations.
The proposed U.S.-Malaysia FTA is of interest to Congress because (1) it
requires congressional approval; (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.
Intellectual property rights protection, protection of Malaysia’s automotive
industry, limits on foreign ownership of banks in Malaysia, and the duration of patent
rights of pharmaceuticals are among the key outstanding issues. However, there is
general agreement that the main “sticking point” is Malaysia’s New Economic Policy
and its preferential treatment for bumiputera-owned companies.
On a most favored nation basis, Malaysia’s average tariff rate is 8.1% — higher
than 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 greater
access to each nation’s domestic market.
Areas of particular interest to U.S. exporters include a reduction of Malaysian
barriers to exports of automobiles and certain agricultural products, stricter
enforcement of intellectual property rights, and broader access to Malaysia’s service
sectors such as financial services, government procurement, telecommunications, and
professional services.
In 2006, the United States was Malaysia’s largest trading partner, while
Malaysia was the United States’s tenth largest trading partner. The United States was
Malaysia’s top export market and its second largest supplier of imports in 2006.
This report will be updated periodically.

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Contents
Key Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Malaysian Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interests, Benefits and Potential Opposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FTAs and Tariff Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Average MFN Tariff Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Average Applied Tariff Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Key Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Automobiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Government Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Capital Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Trade Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Merchandise Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Trade in Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
U.S. Investment in Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Outcomes from Bilateral Negotiations in 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Fourth Round Talks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Fifth Round Talks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Informal Talks in April 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Negotiations in 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Legislative Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Appendix A. Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Appendix B. U.S. Merchandise Exports to Malaysia by Two-Digit
Harmonized System Codes, 2004-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Appendix C. U.S. Merchandise Imports from Malaysia by Two-Digit
Harmonized System Codes, 2004-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Appendix D. U.S. Merchandise Exports by State to Malaysia, 2004-2006 . . . . 41

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List of Figures
Figure 1. Map of Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
List of Tables
Table 1. Selected Indicators for the Malaysian Economy . . . . . . . . . . . . . . . . . . . 5
Table 2. Average and Range of Malaysian and U.S. Most Favored Nation
Tariff Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 3. U.S. and Malaysian Average Applied Tariffs Rates for
Industrial Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 4. U.S. Trade with Malaysia, 2000 to 2006 . . . . . . . . . . . . . . . . . . . . . . . 19
Table 5. Malaysia’s Merchandise Exports by Top 10 Trading Partners . . . . . . . 19
Table 6. Malaysia’s Merchandise Imports by Top 10 Trading Partners . . . . . . . 20
Table 7. U.S. Services Trade with Malaysia and the World . . . . . . . . . . . . . . . . 21
Table 8. U.S. Foreign Direct Investment in Malaysia, 2000-2005 . . . . . . . . . . . 21

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The Proposed U.S.-Malaysia Free Trade
Agreement
Key Recent Developments
! January 14, 2008. Sixth Round of talks held in Kuala Lumpur.
! August 28, 2007. U.S. Deputy Trade Representative Karan Bhatia
states that negotiations with Malaysia on free trade agreement (FTA)
could be completed in 2008.
! April 13, 2007. Informal round of talks held in Washington, DC;
both sides indicate some progress made on key issues.
! March 12, 2007. Twelve Members of Congress write U.S. Trade
Representative Susan Schwab expressing concern that existing and
proposed free trade agreements, including the one being negotiated
with Malaysia, undermine U.S. commitments to the Doha principles,
and “strip away flexibilities to which countries are entitled under
TRIPS.”1
! March 7, 2007. Prime Minister Abdullah meets with the Malaysian
Cabinet to discuss status of negotiations and agree upon acceptable
terms for the remaining 58 issues of the free trade agreement. No
public announcement of the outcome of the meeting is released,
possibly indicating difficulties in arriving at a consensus.
! February 5-9, 2007. Fifth round of talks held in Kota Kinabula,
Malaysia; reported 58 issues remain to be resolved; no date set for
next round of talks.
! January 31, 2007. House Foreign Affairs Committee Chairman Tom
Lantos sends letter to USTR Schwab requesting suspension of FTA
negotiations until Malaysia renounces energy development deal with
Iran.
! January 8-12, 2007. Fourth round of talks held in San Francisco
result in modest progress.
1 “TRIPS” refers to the Trade-Related Aspects of Intellectual Property Agreement of the
World Trade Organization. TRIPS applies to all WTO members, including Malaysia and the
United States.

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CRS-2
Introduction2
On March 8, 2006, the U.S. Trade Representative (USTR) 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 were seeking to complete the
talks by March 31, 2007, 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 (TPA) expired on July 1, 2007, but they
later indicated that they would not rush into concluding the FTA just to meet the
deadline.3 The sixth round of talks were held in Kuala Lumpur on January 14-17,
2008.
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 by the United States
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 are
currently 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.4
2 The author would like to thank Dick Nanto, who conceived of and wrote earlier versions
of this report.
3 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.”
Financial Times Information, Thai Press Reports. August 25, 2006.
4 Office of the U.S. Trade Representative. “United States and Malaysia Sign Trade and
(continued...)

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CRS-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 merchandise imports
from each country, further opening of both
nation’s service sectors, and greater freedom
Malaysia
for U.S. investment in the rapidly
Area: 127,316 sq. mi. (slightly larger
industrializing Malaysian economy. U.S.
than New Mexico)
companies are particularly interested in
Capital: Kuala Lumpur
greater market access in the automotive,
Population: 26.6 million (2006)
financial services, government procurement,
Ethnic groups: Malay 50.8%, Chinese
and agricultural sectors and in improving
23.8%, Indigenous 10.9%, Indian
protection of intellectual property rights in
7.1%
Malaysia. Malaysia has highlighted that the
Religions: Islam (60.4%), Buddhism
(19.2%), Christianity (9.1%)
FTA would provide preferential access to
Government: Federal parliamentary
ASEAN nations for U.S. foreign direct
democracy with a constitutional
investment in Malaysia.
monarch. After becoming independent
in 1957, Malaya, Sabah, Sarawak, and
The proposed U.S.-Malaysia FTA is of
Singapore formed Malaysia in 1963.
interest to Congress because (1) it requires
Singapore became an independent
congressional approval; (2) it would
country in 1965.
continue the trend toward greater trade
Prime Minister: Abdullah bin
liberalization and globalization; (3) it may
Ahmad Badawi
include controversial provisions; and (4) it
Currency: 3.26 Ringgit = $1 (subject
would affect certain trade flows that would,
to market fluctuations)
Trade: The United States is
in turn, affect U.S. businesses or farmers,
Malaysia’s largest trading partner.
particularly import-competing industries
Malaysia is the 10th largest U.S.
and those exporting to Malaysia.
trading partner.
Among the initial responses to the
USTR’s FTA announcement were a statement by Senator Max Baucus welcoming
the agreement, and statements by Representatives Jim Kolbe and Dan Burton hailing
the launch of the negotiations.5 The National Association of Manufacturers indicated
that it has been a leading advocate of an FTA with Malaysia,6 and a U.S.-Malaysia
Free Trade Agreement (FTA) Business Coalition was organized on March 8, 2006.7
4 (...continued)
Investment Framework Agreement.” Press Release. May 10, 2004.
5 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.
6 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.
7 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.

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CRS-4
Objections to the proposed FTA have come from some Malaysian and U.S. labor
unions, farmers, fishermen and academics.8
The pending expiration of Trade Promotion Authority (TPA) in the United
States on July 1, 2007, had placed some pressure on the Bush Administration to
conclude negotiations of this proposed FTA. TPA grants to the President the
authority to enter into certain trade agreements, and to have their implementing bills
considered under expedited legislative procedures.9 TPA also required that Congress
be notified of the intent to sign an agreement 90 days prior to the actual signing.
Therefore, the FTA would have to have been finalized before April 2, 2007, in order
to be considered under the TPA provisions.
FTA negotiations, however, took longer than initially anticipated. At the launch
of the first round of talks on March 8, 2006, then-U.S. Trade Representative Rob
Portman indicated that he thought the negotiations could be completed “within a
year.”10 Nearly two years have passed since that meeting, with no clear sense of
when the remaining issues will be resolved.
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 26.6 million
people, the majority of whom are Muslims. Malaysia’s government is a federal
parliamentary democracy with a constitutional monarch.
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 in 2006 was
8 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.
9 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.
10 “Remarks by United States Trade Representative Rob Portman and Malaysian Minister
for Trade Rafidah Aziz at the Launch of U.S. — Malaysia Free Trade Negotiations,” March
8, 2007, see U.S. Trade Representative webpage — [http://www.ustr.gov/assets/Document_
Library/Transcripts/2006/March/asset_upload_file287_9147.pdf] — for transcript.

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CRS-5
$5,353, but its purchasing power parity was estimated at $11,607.11 As such,
Malaysia is a mid-size market more in the range of Australia and South Korea.
Table 1. Selected Indicators for the Malaysian Economy
2005
2006
2007 (proj.)
Real GDP Growth
5.2%
5.9%
6.0%
Nominal GDP ($ billion)
130.770
148.940
161.843
Nominal GDP per Capita
$4,763
$5,383
$5,740
Inflation Rate - CPI
3.0%
3.6%
1.8%
Inflation Rate - PPI
6.8%
6.7%
3.5%
Unemployment Rate
3.5%
3.5%
3.4%
Exports ($ billion)
140.950
160.555
178.215
Imports ($ billion)
114.603
130.989
149.352
Source: Malaysian Economy, Ministry of Finance, March and December 2007.
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,
Malaysia was the tenth largest trading partner of the United States in 2006. The
United States exported more to Malaysia in 2006 than it did to Israel, Ireland, or
India and three times as much as it sold to Russia. In 2006, U.S. investment in
Malaysia totaled $675 million — the fourth greatest source of foreign investment in
Malaysia, after Japan, the Netherlands, and Australia.12
Interests, Benefits and Potential Opposition
Malaysia plays into U.S. interests through its economy and trade; its role in
countering radical Islamic organizations; 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 the common goal of securing a safe shipping channel through the
Strait of Malacca.13
11 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.
12 Source: Malaysia Industrial Development Authority [http://www.mida.gov.my/].
13 For more information on U.S.-Malaysia relations, see CRS Report RL33878, Malaysia:
Political, Security, Economic, and Trade Issues Considered, by Bruce Vaughn and Michael
F. Martin.

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CRS-6
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.14 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.15 With the
Doha Round of multilateral trade talks under the World Trade Organization (WTO)
encountering problems, some see FTAs as a plausible alternative.
When announcing the proposed negotiations, the USTR 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.16 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 U.S. companies and Malaysian companies; (10) to enhance
economic growth and job creation; and (11) to lower costs and create more
competitive companies.17
In Malaysia, the Ministry of International Trade and Industry — headed by Hon.
Dato’ Seri Rafidah Aziz — 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
14 The White House. National Security Strategy of the United States. March 2006, part VI.
15 See CRS Report RL31038, Asia Pacific Economic Cooperation (APEC), Free Trade, and
the 2007 Meetings in Sydney, Australia, by Michael F. Martin.
16 Office of the United States Trade Representative. Free Trade Agreement: U.S.-Malaysia.
Trade Facts, March 2006.
17 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.

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CRS-7
development objectives.18 The Ministry also noted that it would seek “flexibility and
longer phase-in periods for sensitive sectors.”19
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, and
ASEAN is nearing completion of an FTA with India. 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. On April 19, 2007, Chile and Malaysia
announced they would start negotiations on the establishment of a bilateral FTA in
June, with the first round of talks held in Kuala Lumpur.20
The USTR has also indicated that via the proposed FTA, the U.S. government
is hoping to further build the broader 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.21
As a moderate, democratic Muslim nation, Malaysia plays a strategic role in
U.S. foreign policy. In 2005, Malaysia’s Prime Minister Abdullah bin Ahmad
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.22 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 counterterrorism, defense, counter-narcotics, education, and in other areas.23
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 and environmental protection organizations, as well as “anti-globalization”
groups. In Malaysia, voices opposing the FTA have arisen from labor unions,
18 Malaysia. Ministry of Trade and Industry. Malaysia-US Free Trade Agreement. Media
Release. May 3, 2006.
19 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.
20 “Chile and Malaysia to Start FTA Talks,” Prensa Latina, April 19, 2007.
21 Weisel, Barbara. Opening Remarks, Public Hearing, U.S.-Malaysia FTA, Washington,
DC, May 3, 2006.
22 “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.
23 Weisel, Barbara. Opening Remarks, May 3, 2006. Op. cit.

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CRS-8
farmers, fishermen and other groups, as well as from opposition political parties. In
some cases, opponents to a U.S.-Malaysia FTA from both nations have formed
coalitions.24
With respect to labor interests, the AFL-CIO opposes additional FTAs unless
they contain meaningful protections for workers’ rights and environmental standards.
Its position is that the Bush Administration has launched or concluded bilateral free
trade agreements that include no enforceable protections for core workers’ rights, and
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).25 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.26
Labor conditions in Malaysia have been the subject of some international
criticism. According to Malaysian law, workers are afforded a variety of rights and
most workers have the right to engage in trade union activity. However, according
to the latest U.S. State Department country report on Malaysia, only 9.5% of the
labor force was represented by trade unions.27 In addition, Malaysian trade union
officials report extended delays of up to four years in obtaining legal recognition of
their union. A specific area of international concern has been the working conditions
of Malaysia’s estimated 2.5 million immigrant workers — most from Indonesia —
who reportedly face abuse and exploitation by employers and recruitment agencies.28
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
24 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
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.
25 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.
26 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.
27 U.S. Department of State. Bureau of Democracy, Human Rights, and Labor. Country
Reports on Human Rights Practices — 2006, Malaysia. March 6, 2007.
28 For more information on the condition of immigrant workers in Malaysia, see Human
Rights Watch report on Malaysia at [http://hrw.org/doc/?t=asia&c=malays].

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CRS-9
submitted to Malaysia’s Prime Minister Abdullah 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.29 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.30
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
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.”31 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.32
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.33
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 FY2006
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
29 “20,000 Fishermen, Farmers Protest Against FTA,” by Fauwaz Abdul Aziz, Malaysiakini,
January 10, 2007.
30 “Malaysians Concerned Over Possible Free Trade Agreement with US,” by Joseph
Masiliamany, AsiaNews, October 10, 2006.
31 Public Citizen. Global Trade Watch. CAFTA: Part of the FTAA Puzzle.
[http://www.citizen.org/trade/cafta]
32 “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.
33 See CRS Report RS22424, Arab League Boycott of Israel, by Martin A. Weiss.

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CRS-10
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.34
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 Agreement35 (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.36
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 Preferences37 or the
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 higher
than 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 2 shows the average and range of U.S. and Malaysian MFN tariff rates
34 See CRS Report RL31870, The Dominican Republic-Central America-United States Free
Trade Agreement (CAFTA-DR), by J. F. Hornbeck.
35 See World Trade Organization discussion of the Information Technology Agreement at
[http://www.wto.org/English/tratop_e/inftec_e/inftec_e.htm].
36 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.
37 Malaysia does not qualify for GSP treatment.

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CRS-11
by major commodity category as classified under the Harmonized System.38 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
(2006)
(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
38 Based on the most current World Trade Organization Trade Policy Reviews for Malaysia
and the United States.

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CRS-12
Malaysia’s Tariff Rates
U.S. Tariff Rates
(2006)
(2004)
No. of
Average
Range
No. of Average Range
Lines
(%)
(%)
lines
(%)
(%)
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
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 chances that an FTA would generate a surge in agricultural imports from
Malaysia seems small. In 2006, for example, Malaysia exported to the world a total
of $113 million in milk, $136 million in sugar, and $240 million in tobacco

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CRS-13
products.39 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. For transport equipment, the
average Malaysia tariff of 25.6% is nearly ten times the U.S. rate of 2.6%. For 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 frequently
used 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 a nation may have special trade
arrangements with other nations under which the partners pay lower or no tariffs on
their exports. 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%.40 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 for selected industrial sectors.
39 Data from Global Trade Atlas.
40 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-14
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.
Key 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 often
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 USTR 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.

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CRS-15
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
Business Software Alliance (BSA) estimated 60% of the software in Malaysia is
pirated, resulting in industry losses in 2006 of $289 million.41
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 2007 Special 301 Report, the USTR stated that “Malaysia showed a
solid commitment to strengthening IPR protection and enforcement this past year, but
still has some serious deficiencies that need attention.”42 IPR enforcement
improvements during 2006 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 it would be “pressing IPR
issues through the ongoing U.S.-Malaysia Free Trade Agreement negotiations.”43
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
[them] far too costly for them [HIV/AIDS patients] to buy.”44 Others believe that
stricter enforcement of drug patents could discourage pharmaceutical companies
from introducing new anti-retroviral drugs in Malaysia.45
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
41 “Malaysia’s Software Piracy Still at 60 Percent, Says BSA,” Bernama, May 15, 2007.
42 U.S. Trade Representative. 2007 Special 301 Report, page 33.
43 Ibid.
44 “People with HIV/AIDS Hold Anti-FTA Protest,” by Soon Li Tsin, Malaysiakini, January
11, 2007.
45 Dass, Maria J. Groups Worried Over FTA with US. Sun2Surf.com, Malaysia.
September 11, 2006.

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CRS-16
Malaysia by non-Malaysian owned firms. The firms making national cars, for
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 20-50% on motorcycles.46
During negotiations, Malaysia is likely to raise the issue of U.S. measures
protecting its 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.47
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 enforced the 51% cap except in cases of companies who seek the right to
establish branches.48
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
46 U.S. Trade Representative. 2007 National Trade Estimate Report on Foreign Trade
Barriers, April 7, 2007. Section on Malaysia.
47 “Administration Hears Industry Input on Priorities for Malaysia FTA,” Washington Trade
Daily (Online edition), May 5, 2006.
48 U.S. to Face Difficulties on Financial Services in Malaysia FTA Talks, Inside U.S. Trade,
March 10, 2006.

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CRS-17
to float rather than be strictly pegged to the dollar, and allowed foreign banks to open
four additional branches in 2006.49
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.50
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.51
In services, the United States has used the negative list approach in determining
which sectors are excluded from the agreement.52 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 to 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.53
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.54
49 U.S. Trade Representative. 2007 National Trade Estimate Report on Foreign Trade
Barriers, March 31, 2007. Section on Malaysia.
50 Ibid.
51 Ibid.
52 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.
53 Ibid.
54 Government Procurement Emerging as Major Problem in U.S.-Malaysia FTA. Inside US
Trade, September 1, 2006.

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CRS-18
In addition, there is strong interest in segments of the Malaysian business
community to obtain preferential access to the U.S. government procurement process.
Tan Sri Yong, president of the Federation of Malaysian Manufacturers (FMM),
commented, “At the moment, Malaysian companies cannot access the American
government procurement, which is 65 times larger than ours. This means our
furniture and computers cannot be supplied to the U.S. government.”55
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 led some U.S. importers to use
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.56 FTAs also can cause a substitution effect as imports are substituted
for domestic production. In that case, import-competing industries may suffer and
may request assistance to adjust to increased competition from imports.
Merchandise Trade
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 and Malaysia’s Department of Statistics. According to the United States,
U.S. exports to Malaysia remained steady at about $10 billion per year from 2000 to
2005, but rose to over $12.5 billion in 2006. U.S. imports from Malaysia grew by
nearly 43% 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 $24 billion so far in 2006.
55 Rupa Damodaran, “Manufacturers: US FTA Talks Could be Faster,” New Strait Times,
December 17, 2007.
56 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-19
Table 4. U.S. Trade with Malaysia, 2000 to 2006
(Billion U.S. Dollars)
U.S. Data
Malaysian Data
Year
U.S.
Malay
Trade
Malay
U.S.
Trade
Exports
Imports
Balance
Exports
Imports
Balance
2000
10.957
25.568
-14.611
20.155
13.648
6.507
2001
9.358
22.340
-12.982
17.808
11.800
6.008
2002
10.344
24.009
-13.665
18.816
13.079
5.737
2003
10.914
25.440
-14.526
17.791
12.195
5.596
2004
10.922
28.179
-17.257
23.564
15.239
8.325
2005
10.461
33.685
-23.224
27.743
14.768
12.975
2006
12.550
36.532
-23.982
30.187
16.422
13.765
Source: U.S. Department of Commerce and Malaysia Department of Statistics via Global Trade Atlas
According to Malaysia, its exports to the United States rose from just over $20
billion in 2000 to about $30 billion in 2006 — an increase of nearly 50%. Over the
same time period, Malaysia’s imports from the United States rose 20% from under
$14 billion in 2000 to over $16 billion in 2006. Malaysia’s resulting trade surplus
with the United States was $6.5 billion in 2000 and $13.8 billion in 2006 — roughly
$8-$10 billion less than the U.S. figures.
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, 18.7% of
Malaysia’s exports went to the United States. In 2006, once again 18.7% of its
exports were shipped to the United States.
Table 5. Malaysia’s Merchandise Exports by Top 10 Trading
Partners
(Billion U.S. Dollars)
Partner
2004
2005
2006
World Total
125.857
140.979
160.845
United States
23.564
27.743
30.187
Singapore
18.968
22.009
24.757
Japan
12.714
13.181
14.249
China
8.384
9.303
11.734
Thailand
6.027
7.585
8.506
Hong Kong
7.433
8.241
7.951
Netherlands
4.099
4.609
5.853
South Korea
4.404
4.737
5.809
India
2.995
3.955
5.132
Australia
4.142
4.765
4.556
Source: Department of Statistics, Malaysia via Global Trade Atlas

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CRS-20
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. In
addition, whereas Malaysia’s imports from Japan and the United States have
experienced uneven growth over the last three years, imports from Singapore and
China have risen rapidly. As a result, both China and Singapore are poised to
overtake the United States as Malaysia’s second largest supplier of imported goods.
Table 6. Malaysia’s Merchandise Imports by Top 10 Trading
Partners
(Billion U.S. Dollars)
Partner
2004
2005
2006
World Total
105.297
114.626
131.223
Japan
16.775
16.634
17.347
United States
15.239
14.768
16.421
China
10.340
13.177
15.896
Singapore
11.706
13.424
15.338
Thailand
5.789
6.045
7.171
Taiwan
5.670
6.331
7.161
South Korea
5.228
5.706
7.071
Germany
4.700
5.088
5.753
Indonesia
4.194
4.375
4.954
Hong Kong
2.859
2.852
3.454
In Asia, Malaysia already has FTAs with Japan and Singapore and is negotiating
FTAs with Australia, India, New Zealand, and Pakistan. Meanwhile, China has
signed an FTA with ASEAN, to which Malaysia is a member, which includes a trade
in services agreement that went into force as of July 2007. The proposed FTA with
the United States would place U.S. exporters on similar footing as exporters from
China, Japan, and Singapore — Malaysia’s other leading trading partners.
Trade in Services
According to current U.S. data, Malaysia is not a major services trading partner
for the United States (see Table 7). Total services trade with Malaysia amounted to
less than $2 billion per year from 2000 to 2004, and just climbed above $2 billion in
2005. When compared to the total value of U.S. services trade, Malaysia’s relatively
small role in overall services trade becomes apparent. Even at its peak, Malaysia
represented less than half a percent of the U.S. services export market and provided
barely a quarter of a percent of the U.S. services imports.
Despite the relatively small current volume of services trade with Malaysia,
several U.S. service sectors — including telecommunications, financial services, and
insurance providers — have expressed strong interest in obtaining improved access
to Malaysia’s domestic market.

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CRS-21
Table 7. U.S. Services Trade with Malaysia and the World
(Billion U.S. Dollars)
2000
2001
2002
2003
2004
2005
Malaysia
Exports
1.118
1.193
1.167
1.214
1.195
1.373
Imports
0.387
0.525
0.493
0.514
0.622
0.708
World
Exports
284.028
272.814 279.561
289.102
328.000
360.489
Imports
207.392
204.074 209.048
221.849
257.235
280.563
Malaysia’s
Exports
0.393%
0.437%
0.417%
0.420%
0.364%
0.381%
Share
Imports
0.186%
0.257%
0.236%
0.232%
0.242%
0.252%
Source: U.S. Bureau of Economic Analysis
The United States already is Malaysia’s top export market for merchandise
goods. A U.S.-Malaysia FTA would likely reinforce this relationship. Similarly, the
discussed FTA would offer better access to U.S. services providers to Malaysia’s
domestic market.
U.S. Investment in Malaysia
According to the U.S. Bureau of Economic Analysis, U.S. companies by 2006
had invested over $12 billion in Malaysia (see Table 8). About 38% of U.S.
investments in Malaysia were in the manufacturing sector, with investments in
computer and electronic equipment manufacturing facilities accounting for over two-
thirds of the manufacturing investments. Outside of manufacturing investments, U.S.
companies also were also investing in mining facilities in Malaysia, with a notable
increase of over $760 million in 2006.
Table 8. U.S. Foreign Direct Investment in Malaysia, 2000-2005
(Million U.S. Dollars)
Manufacturing -
Manufacturing -
Manufacturing
Year
TOTAL
Computers &
Mining
Total
- Chemical
Electronic Equipment
2000
7,910
5,028
4,385
250
N.A.
2001
7,489
5,006
4,322
203
N.A.
2002
7,101
3,060
2,370
195
562
2003
7,057
3,213
2,404
255
514
2004
8,096
3,593
2,471
460
461
2005
9,993
4,166
2,977
498
1,493
2006
12,450
4,787
3,282
754
2,255
Source: U.S. Bureau of Economic Analysis.
According to the Malaysian Industrial Development Authority (MIDA), U.S.
companies obtained approval for 43 projects worth $1.360 billion in 2005 and 38
projects worth $675 million in 2006. MIDA reported that most of the U.S.

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CRS-22
investment over the last two years was in the electronic equipment industry and the
chemical industry, indicating a continued focus of U.S. investors in those two sectors.
Outcomes from Bilateral Negotiations in 2007
At the start of FTA negotiations, the United States and Malaysia indicated that
the process would require five rounds of talks. In 2007, the fourth, fifth, and an
informal rounds were completed in January, February, and April, respectively.
However, although the rounds were completed, the negotiations were not. As a result,
the proposed FTA was not completed in time for consideration under TPA
procedures.
Because of the relative importance of the agreement for Malaysia, the Malaysian
government appears to be cautious in its consideration of the terms of the agreement,
and has repeatedly stated its intent to ensure that any agreement would protect the
people of Malaysia and its economic future. On March 7, 2007, Prime Minister
Abdullah reiterated this stance on the FTA talks, saying, “I would like to ensure that
the nation’s interests will always be safeguarded and would not be sacrificed in any
way.”57
Fourth Round Talks. The United States and Malaysia held their fourth round
of bilateral negotiations regarding the FTA in San Francisco from January 8 to 12,
2007. After the conclusion of the talks, the chief U.S. negotiator, Assistant Trade
Representative for Asia and the Pacific Barbara Weisel, indicated that she expected
a fifth and final round of talks would be held in early February in Malaysia, thereby
completing the negotiations before the March 2007 deadline.58
However, Minister Rafidah 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, 2007 deadline. In a press interview on January 18, 2007,
Minister Rafidah 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.”59
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 in the
57 “PM: Government Will Always Safeguard Nation’s Interest in FTA Negotiations,”
Bernama (Malaysia), March 7, 2007.
58 “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.
59 “Rafidah: Malaysia-US FTA Talks Unlikely to be Completed by July 2007,” FTA
Malaysia, January 18, 2007.

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CRS-23
United States. In a letter to a member of the Malaysian parliament, Minister Rafidah
stated that Malaysia was seeking improved U.S. market access for 600 products
(including textiles, clothing, chemicals and chemical products, rubber goods, wood
products, ceramics, iron, steel, and electrical and electronic products) by the
reduction or removal of U.S. tariffs.60
Market access for U.S. merchandise exports continued to be a persistent issue
in the 2007 negotiations. 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.”61 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.”62 Besides
agricultural goods, there were unresolved issues regarding trade in textiles and
automobiles.
Another continuing issue in 2007 was finding a common approach to
negotiating market access for services. The United States wanted to use a “negative
approach” under which all service sectors would be covered by the FTA unless
explicitly excluded from the agreement. Malaysia preferred to base the talks on a
“positive approach” where only those sectors explicitly mentioned in the agreement
are covered by the FTA. Observers indicated that Malaysia is particularly concerned
about the impact of U.S. access to Malaysia’s financial services market.
Regarding Malaysia’s “New Development Policy,” there was little apparent
flexibility from Malaysia in 2007. According to Minister Rafidah, Malaysia was
“standing firm” on this issue, and “it is an area where [Malaysia] could not
compromise and this is known by the U.S. side.”63 However, U.S. 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.64
Fifth Round Talks. Conditions for the fifth round of talks were complicated
at the end of January 2007 with the news of a $16 billion energy development deal
60 “Malaysia Lists 600 Products in Negotiations for the US Market Access,” Bernama
(Malaysia), March 20, 2007.
61 “US Sees ‘Real Interest’ in Free Trade Deals with Malaysia, South Korea,” Agence
France Presse, January 9, 2007.
62 “Tobacco, Rice Excluded in FTA Negotiations with the US,” by Mergawati Zulfakar, The
Star, January 15, 2007.
63 “Rafidah: Malaysia-US FTA Talks Unlikely to be Completed by July 2007,” FTA
Malaysia, January 18, 2007.
64 “U.S.-Malaysia Trade Deal Possible by March: USTR,” by Doug Palmer, New York
Times, January 12, 2007.

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CRS-24
between Malaysia’s SKS Group and the National Iranian Oil Company that would
develop Iranian gas fields and build liquefied natural gas plants.65 During a House
Committee on Foreign Affairs Hearing on January 31, 2007, Chairman Tom Lantos
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.66 U.S. Trade Representative Schwab
indicated that she intended to continue the negotiations with Malaysia.67
Malaysia sharply rejected the call to revoke the energy deal with Iran. Minister
Rafidah reportedly said that the United States has no right to block Malaysia trading
with any country, even after the conclusion of the proposed FTA.68 Prime Minister
Abdullah also was firm on the issue, “We reject the pressure being inflicted upon
us.... Do not bring any political matters into trade.”
The fifth round of negotiations began on February 5, 2007, in Kota Kinabula,
Malaysia, and were concluded on February 9, 2007. According to one report, there
was an agreement to take contentious issues “off the table” during the talks, and
discuss those issues at the ministerial level.69 These issues supposedly included
government procurement, Malaysia’s New Economic Policy, and the import of rice
and tobacco into Malaysia.
Following the fifth round of talks, U.S. Assistant Trade Representative Weisel
told reporters, “While progress was made in a number of areas, there were a few key
areas where unfortunately only limited progress was made.”70 While U.S. Assistant
Trade Representative Weisel indicated that an FTA was still “achievable,” she also
stated that no dates had been set for future negotiations.
On Malaysia’s side, Minister Rafidah indicated that there were 58 outstanding
issues in the FTA negotiations, including Malaysia’s distributive trade guidelines.71
The guidelines set paid-up capital and bumiputera equity participation minimums for
joint ventures in Malaysia. Intellectual property rights protection in Malaysia also
was on the list of 58 outstanding issues. Various press reports have indicated that
protection of Malaysia’s automotive industry, limits on foreign ownership of banks
in Malaysia, and the duration of patent rights of pharmaceuticals are also among the
58 issues. However, there was general agreement that the main “sticking point” was
65 “Malaysia Stands by Iranian Gas Deal,” BBC News, February 2, 2007.
66 “Remarks by Congressman Tom Lantos, Chairman, House Committee on Foreign Affairs,
at Hearing, ‘Understanding the Iran Crisis,’” January 31, 2007.
67 Reported in Washington Trade Daily, February 5, 2007.
68 “Malaysia Defends State Despite U.S. Threat to Halt FTA Talks,” Bernama - Malaysian
National News Agency, February 2, 2007
69 “Malaysia, US Take Contentious Issues ‘Off the Table.’” Business Times (Malaysia),
February 9, 2007.
70 “Malaysia, US Free Trade Talks Bog Down,” Agence France Presse, February 9, 2007.
71 “Rafidah: Distributive Trade Guidelines an Issue with the US,” by Kevin Tan, The Edge
Daily (Malaysia), February 12, 2007.

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CRS-25
Malaysia’s New Economic Policy and its preferential treatment for bumiputera-
owned companies.
On March 7, 2007, Minister Rafidah updated Malaysia’s cabinet on the progress
of the FTA negotiations, and requested their input on the remaining 58 unresolved
issues.72 During the press announcement about the cabinet briefing, Minister Rafidah
reiterated that Malaysia was not bound by any timetable to conclude the FTA
negotiations, and that 19 ministries were actively involved in the talks. Sources
indicate that the cabinet briefing went longer than expected, and that they were
unable to resolve the 58 issues during the meeting. One minister reportedly stated
that there was a decision to hold another set of discussions among the cabinet at an
unknown future date.
On the U.S. side, ex-Ambassador Christopher LaFleur expressed confidence that
the two nations would be able to conclude negotiations before the March 31, 2007
deadline during a lecture given at the Universiti Putra Malaysia in Kuala Lumpur on
March 1, 2007.73 However, Ambassador LaFleur also stated in a press briefing that
the “window of opportunity” was closing.74
Since the conclusion of the fifth round of talks, interested parties in Malaysia
— both supporting and opposing the FTA — have continued to push their views on
the issue, perhaps contributing to the difficulty for the cabinet to conclude their
discussions. The Federation of Malaysian Manufacturers (FMM), a supporter of the
FTA, have argued that the agreement will stimulate Malaysia’s clothing and textile
industries, doubling exports to the United States and creating an estimated 200,000
jobs.75 The FMM also maintains that the FTA will draw U.S. factories to relocate to
Malaysia to take advantage of preferential market access into ASEAN, China, and
Japan via Malaysia’s FTAs. In addition, the FTA will lower U.S. import tariffs on
Malaysian-made footwear (up to 48%), tableware (up to 25%), and clothing (up to
28%).
On March 16, 2007, the Malaysian Textile Manufacturers Association (MTMA)
called for the “timely conclusion” of the FTA negotiations.76 According to the
MTMA, the FTA “will help to sustain the textile and apparel industry in Malaysia
which ... employs over 80,000 workers.” MTMA president Datuk Y. H. Tan was
quoted as saying, “The U.S. market is our most important market and therefore the
FTA is critical to the maintenance and survival of the Malaysian textile and apparel
industry.”
72 “Rafidah to Update Cabinet on Malaysia-US FTA Talks on Wednesday,” The Edge Daily
(Malaysia), March 5, 2007.
73 US Official Confident of Malaysia-US FTA Coming Through,” Daily Express (Malaysia),
March 1, 2007.
74 Washington Trade Daily, February 28, 2007.
75 “Access to US$ 250 Billion Market for Malaysia via FTA, Says FMM,” Bernama
(Malaysia), March 12, 2007.
76 “U.S.-Malaysia FTA to Help Textile Industry, Says Association,” Bernama (Malaysia),
March 16, 2007.

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CRS-26
On the opposite side of the FTA debate, the Malaysian Organisation of
Pharmaceutical Industries (Mopi) are concerned that U.S. companies will be able to
obtain virtual monopolies for drugs even when the exclusive patent rights have
ended, if Malaysia accepts the terms proposed by the United States.77 At issue are the
timing of the patent rights protection, patent renewal for modified drugs, and the
duration of data exclusivity of drug testing. Mopi argues that U.S. pharmaceutical
companies will manipulate these factors to extend their monopoly rights beyond the
standard 20 years, thereby blocking the introduction of generic drugs.
On the issue of Malaysia’s preferential treatment of bumiputera companies, the
FMM president Datuk Yong Poh Kon drew parallels between Malaysia’s policy and
the U.S. policy of providing preferential treatment to small businesses when
awarding government contracts.78 According to Yong, U.S. negotiators are “prepared
to work within a framework of preferences for the bumiputera community.”
The impact of the FTA on Malaysia’s farmers also continued to raise concerns
in 2007. One Malaysian commentator maintained that U.S. rice farmers “were so
heavily subsidised that they are able to sell at 25 per cent below production cost
which means U.S. rice could flood our market and force ... 116,000 padi farmers out
of work.”79 Another commentator wrote, “Even if our padi farmers are protected
under the Agreement, what about other sub-sectors, such as poultry farming? We
have the example of Mexico, which lowered tariffs under the North American Free
Trade Agreement and consequently opened the floodgates to subsidised corn from
the U.S. It impoverished at least three million of Mexico’s 10 million farmers.”80
On March 14, 2007, 31 Malaysians released a memorandum to the Malaysian
Cabinet ministers entitled, “People’s Protest Against FTA,” listing their objections
to the proposed U.S.-Malaysia free trade agreement.81 Among their objections were:
! The FTA will have “a dire impact on the sovereignty of the
country;”
! The [Malaysian] government “will lose its ability to maintain many
key present policies and make new policies;”
! The FTA will “hamper our country’s development,” and eliminate
jobs; and
! Consumers will “have to suffer higher prices of medicines.”
77 “Too Big a Price to Pay for FTA,” letter to the editor by Jimmy Piong, New Strait Times
(Malaysia), March 1, 2007.
78 “Why an FTA with the USA is Good for Malaysia,” letter to the editor by Datuk Yong
Poh Kon, president of the FMM, The Edge Daily (Malaysia), March 12, 2007.
79 “Out of the Cage: FTA Must Promote Fair, Not Free Trade,” by Khairy Jamaluddin, New
Strait Times (Malaysia), March 9, 2007.
80 “FTA with the US: To Sign or Not to Sign?” by Chandra Muzaffar, Sun2Surf (Malaysia),
March 8, 2007.
81 Full text of the memorandum is available at [http://www.ftamalaysia.org/
article.php?aid=159].

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CRS-27
The authors maintained that Malaysia’s trade and economic relations with the United
States will be better without the FTA. They also pointed to the deterioration of
Singapore’s trade deficit with the United States since that bilateral FTA came into
force as proof of the potential harmful effects of the proposed U.S.-Malaysia FTA.
On March 12, 2007, 12 Members of Congress82 wrote a letter to U.S. Trade
Representative Schwab stating their concern that the terms of existing and proposed
free trade agreements “appear to undermine” the U.S. commitment to the Doha
Declaration’s reaffirmation of the right of WTO members to use the provisions of the
TRIPS agreement providing flexibility to protect the public health. More specifically,
the letter points to FTA provisions on data exclusivity, patent extensions, compulsory
licensing and consumer safeguards that could be used by pharmaceutical companies
to extend their patent protection beyond the customary 20 year limit and/or block the
introduction of less expensive generic drugs into the market. In closing their letter,
the Members of Congress wrote, “Protecting innovation is important, but the
intellectual property provisions in current FTAs extend pharmaceutical monopolies
without sufficient regard to consumer access and public health.”
No formal announcement of the outcome of the meeting of the Malaysian
Cabinet was ever made. On March 23, 2007, the USTR’s office announced that the
United States and Malaysia had agreed to “take a pause” in the trade negotiations.83
According to the USTR statement, reaching an agreement on the FTA before the end
of the month was no longer possible. As a result, both parties had agreed to a short
break in the talks, and planned for “consultations” to continue in mid-April.
Informal Talks in April 2007. On April 3, 2007, Minister Rafidah reported
that Malaysia and the United States would hold another round of informal talks in
Washington, DC, “within the next 10 days.”84 The actual talks began on April 13.
Prior to the start of the talks, Minister Rafidah stated, “U.S. Trade Representative
Susan Schwab and I have agreed that we will take our time. We want to discuss it
properly and we should not be concerned about any deadline.”85
Little was reported about the outcome of the April talks immediately after their
completion. Sources indicated that there was some progress, including a possible
compromise on the issue of data exclusivity for U.S. pharmaceuticals. Minister
Rafidah did report that Malaysia would abolish tariffs on 114 products over a five-
year period after the FTA is signed.86 Minister Rafidah also stated in response to
82 Representative Henry Waxman, Representative Jim McDermott, Representative Tom
Allen, Representative Lloyd Doggett, Representative Janice Schakowsky, Representative
Pete Stark, Representative Diana DeGette, Representative Chris Van Hollen, Representative
Barbara Lee, Representative Earl Blumenauer, Representative John Lewis, and
Representative Rahm Emanuel.
83 “US, Malaysia Pause FTA Negotiations,” Washington Trade Daily, March 26, 2007.
84 “Malaysia-US FTA Talks to Continue,” Bernama, April 3, 2007.
85 “Report: Malaysia, U.S. Won’t Rush FTA,” Associated Press, April 12, 2007.
86 “Malaysia-US FTA at Technical Stage, Says Rafidah,” Bernama, May 8, 2007.

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CRS-28
questions from the Malaysian Senate, Dewan Negara, that the negotiations had
reached “the technical stage.”87
However, the reported progress was apparently insufficient to complete the
negotiations before TPA expired on July 1, 2007. On July 16, 2007, Minister Rafidah
reported that talks were “ongoing, but in smaller groups and not big delegations as
before.”88 According to the minister, the two parties had “agreed on some areas and
there are also areas that need further discussions.”89 On July 17, 2007, when asked
about the special status for bumiputeras, Deputy Prime Minister Datuk Seri Najib
Tun Razak responded that “domestic policies will be outside the ambit of the FTA.”90
He also reiterated Malaysia’s statement that it was not tied to any deadline for
completing the FTA negotiations.
On the same day Minister Rafidah made her statement, U.S. Assistant Trade
Representative Weisel provided a different assessment of the status of the
negotiations. According to U.S. Assistant Trade Representative Weisel, about 17 or
18 of the FTA chapters had “bits and pieces of business left to be concluded.”91 She
also indicated that both the United States and Malaysia were looking to conclude the
negotiations by the middle of 2008.
The prospect of completing the FTA talks in 2008 was reiterated by then Deputy
U.S. Trade Representative Karan Bhatia on August 28, 2007. In an interview with
Reuters, Deputy USTR Bhatia said, “It is our hope that we’ll actually be in a position
to conclude it [the U.S.-Malaysia FTA negotiations] next year.”92 He also indicated
that he would be discussing the FTA with Malaysian officials when he traveled to
Kuala Lumpur for Malaysia’s 50th anniversary of its independence on August 31,
2007.
In September 2007, the new U.S. Ambassador to Malaysia, James Keith, told
reporters that “it’s important that we continue discussions. The FTA is an opportunity
for the U.S. and Malaysia to partner.”93 It was also reported that U.S. trade officials
had indicated that the new target for the conclusion of the negotiations was July
2008. However, on November 14, 2007, US-ASEAN Business Council president
87 Ibid.
88 “Malaysia-US FTA Negotiations Still Ongoing, Say Rafidah,” by Saraswathi Muniappan,
Bernama, July 16, 2007.
89 Ibid.
90 “Malaysia-US FTA Talks Nothing to do with Malaysia’s Domestic Policies,” Bernama,
July 17, 2007.
91 Malaysia-US FTA Talks Expected to Conclude by June 2008,” Bernama, July 16, 2007.
92 “U.S., Malaysia Could Strike Trade Deal Next Year - USTR,” by Doug Palmer, Reuters,
August 28, 2007.
93 “US-Malaysia FTA to Conclude in 2008?” FTA Malaysia, September 19, 2007.

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CRS-29
Matthew P. Daley predicted that the formal conclusion of the FTA would likely be
deferred until after the U.S. November 2008 elections.94
Negotiations in 2008
Following the failure to complete FTA negotiations in 2007, there was a
perception in Malaysia that the Bush Administration did not see relations with
Malaysia or the conclusion of FTA negotiations as a priority. During a press
interview in December 2007, Ambassador Keith was asked if the failure of U.S.
Secretary of State Condoleezza Rice to attend ASEAN meetings, as well as the “low-
level delegation” sent by the United States to Malaysia’s 50th National Day
celebrations, was an indication that Malaysia had “moved down the list of priorities
for the U.S. State Department.”95 Ambassador Keith reassured the press of the U.S.
commitment to the region and to Malaysia, pointing to the passage on September 17,
2007 of House Resolution 518 commemorating Malaysia’s 50th anniversary as
evidence.
On December 30, 2007, U.S. Assistant Trade Representative Weisel confirmed
that “the U.S. continues to seek to conclude the agreement by this summer, which we
believe is achievable ...”96 U.S. Assistant Trade Representative Weisel also said that
the Bush Administration would seek an “appropriate vehicle” to obtain congressional
approval of the proposed FTA once the negotiations were completed.97
On January 14, 2008, Malaysia and the United States began their sixth round of
formal negotiations in Kuala Lumpur over the terms of a possible U.S.-Malaysia Free
Trade Agreement. In a statement to the press on the day the talks began, U.S.
embassy spokeswoman Kathryn Taylor said the United States was seeking “real,
demonstrable progress” during the sixth round of talks, but also pointed out that
“there is no deadline” for completing the agreement.98 However, in an interview with
the press that same day, Ambassador Keith stated he was hoping that the negotiations
would be completed by the middle of 2008.99
Assessments of the outcome of the sixth round of talks have been mixed. A
news story from China reported that four key issues were discussed during the talks
— investment, trade in goods and services, intellectual property rights, and “legal
94 Tamimi Omar, “US-Malaysia FTA Likely after Bush Administration,” The Edge Daily,
November 14, 2007.
95 Oorrjitham, op cit.
96 Rupa Damodaran, Malaysia-US FTA Talks to Resume on January 14,” Business Times,
December 30, 2007.
97 Ibid.
98 “After 1-year Hiatus, Malaysia and US Resume FTA Talks,” The Times of India, January
14, 2008.
99 Kevin Tan, “US Hopeful of FTA with M’sia by Mid-year,” The Edge Daily, January 24,
2008.

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CRS-30
issues.”100 According to Xinhua, the United States is “hopeful of concluding its free
trade agreement with Malaysia by this summer...”101 Malaysia’s official news agency,
Bernama, provided a similar positive assessment of the sixth round of talks, quoting
U.S. Assistant Trade Representative Weisel, “We have largely reached the goal set
for the week. The two sides have moved significantly on a wide range of
issues...progress we made this week is encouraging.”102 The New Strait Times of
Malaysia published a similar story on the sixth round of talks on January 18, 2008,
referring to the progress that had been made and possibility of concluding the
negotiations by summer.103
Press accounts of the status of the FTA talks turned less optimistic a few days
later. On January 24, 2008, Bernama printed two separate stories on the FTA
negotiations. The first article reported that Malaysian International Trade and
Industry Minister Rafidah Rafidah saw no need for a deadline for concluding the
trade talks.104 The second article stated that U.S. Ambassador Keith had indicated that
if the FTA with Malaysia were not completed by the end of July, the United States
would focus its attention on other FTA agreements.105 Ambassador Keith was quoted
as saying, “We will turn our attention to seal the pacts with South Korea and
Columbia before the end of the Bush Administration. There will be no hard
feelings.”106
Another sign about the status of the negotiations was the lack of a decision on
the date and place to hold the next round of talks. The United States stated that there
was agreement on “the next steps” — communicating on a full set of issues still to
be resolved and setting the dates for the next round of talks.107 However, Minister
Rafidah Rafidah reportedly said on the status of the negotiations, “Whatever issues
that can be cleared first, they have cleared. We don’t have to meet again.”108
100 “U.S., Malaysia Make Progress in Trade Talks,” Xinhua, January 18, 2008.
101 Ibid.
102 “US Aims to Conclude FTA by Summer, Insists on Government Procurement,” Bernama,
January 17, 2008.
103 Anna Maria Samsuddin, “US, Malaysia Make Progress in Trade Talks: Weisel,” New
Strait Times, January 18, 2008.
104 “No Need for Deadline to Conclude Malaysia-US FTA, Says Rafidah,” Bernama,
January 24, 2008.
105 “US to Sign FTA with Other Countries if Talks with Malaysia Fail,” Bernama, January
24, 2008.
106 Ibid.
107 “US Aims to Conclude FTA by Summer, Insists on Government Procurement,” Bernama,
January 17, 2008.
108 “No Need for Deadline to Conclude Malaysia-US FTA, Says Rafidah,” Bernama,
January 24, 2008.

---

CRS-31
Legislative Requirements
When the talks began, the USTR’s goal was to have the U.S.-Malaysia FTA
implementing bill considered by Congress under “fast track” expedited procedures
of the Bipartisan Trade Promotion Authority (TPA) Act of 2002 (P.L. 107-210).109
However, the statute requires the President to notify Congress of his intention to
enter into the agreement at least 90 calendar days before entering into the trade
agreement. Since the President’s Trade Promotion Authority expired on July 1, 2007,
and the President did not notify the Congress by the April 2, 2007 deadline, the U.S.-
Malaysia FTA became ineligible to be considered under the 2002 TPA.
As a result, there are several possible scenarios under which a proposed FTA
with Malaysia might be considered by Congress. First, if Congress were to extend,
renew or revise Trade Promotion Authority beyond its expiration date, then the U.S.-
Malaysia FTA might be considered under the provisions of a new TPA law. Second,
Congress could choose to pass legislation providing temporary or limited TPA for
the proposed U.S.-Malaysia FTA. This approach was used when Congress considered
the Uruguay Round Agreements. Third, Congress could consider the proposed U.S.-
Malaysia FTA without TPA, as it did with the U.S.-Jordan FTA. However,
consideration of the proposed FTA with Malaysia without TPA would potentially
allow Congress to amend the implementing bill in ways that could modify the terms
of the trade agreement.
In the meantime, while negotiations with Malaysia on the proposed FTA are
incomplete, 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. P.L. 107-210 (Section 2104) provides for close
consultations with the Executive Branch during and following the negotiations. Such
consultations could lead to changes in the draft agreement before it is signed.
Legislation
110th Congress
At the time this report was updated, there were no bills introduced directly
related to 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 and co-sponsored by Representatives Walter B. Jones,
109 For more detailed information about trade promotion authority, see CRS Report
RL33743, Trade Promotion Authority (TPA): Issues, Options, and Prospects for Renewal,
by J. F. Hornbeck and William Cooper.

---

CRS-32
Jr., Marcy Kaptur, and Michael H. Michaud. The bill was referred to the House
Ways and Means Committee.
Also, H.R. 3684 would limit the President’s ability to reduce or alter U.S.
import duties unless the President certified for Congress that the trading partner was
providing “meaningful market access” for U.S. exports.

---

CRS-33
Appendix A. Chronology110
2008
January 14
Sixth Round of Talks held in Kuala Lumpur
2007
April 13
Informal Round of negotiations held in Washington, DC.
March 7
Malaysian Cabinet meet to discuss 58 outstanding issues in the
FTA negotiations.
February 5
Fifth Round of negotiations 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.
110 This chronology is based on various news reports, press releases, and notifications.

---

CRS-34
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.
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-35
Appendix B. U.S. Merchandise Exports to Malaysia
by Two-Digit Harmonized System Codes, 2004-2006
(US$ Million; FAS value)
Description
2004
2005
2006
Total Exports to Malaysia
10,896.8
10,450.9
12,550.1
01
Live Animals
0.6
2.3
2.4
02
Meat
2.1
3.3
2.0
03
Fish and Seafood
3.0
3.0
6.0
04
Dairy, Eggs, Honey, etc
24.7
33.5
48.7
05
Other of Animal Origin
0.1
0.2
0.3
06
Live Trees and Plants
0.0
0.0
0.0
07
Vegetables
3.9
5.5
6.2
08
Edible Fruit and Nuts
105.3
117.6
94.3
09
Spices, Coffee and Tea
0.5
0.8
0.8
10
Cereals
15.8
29.8
23.5
11
Milling; Malt; Starch
2.1
1.5
1.6
12
Misc Grain, Seed, Fruit
61.4
26.2
58.8
13
Lac; Vegetable Sap, Extract
1.8
2.1
1.9
14
Other Vegetable
0.0
0.0
0.0
15
Fats and Oils
2.0
1.7
2.6
16
Prepared Meat, Fish, etc
0.3
1.0
0.8
17
Sugars
6.7
7.2
9.6
18
Cocoa
3.4
4.9
3.3
19
Baking Related
4.3
5.2
4.5
20
Preserved Food
23.1
23.2
24.3
21
Miscellaneous Food
41.0
46.7
48.8
22
Beverages
5.1
4.0
5.8
23
Food Waste; Animal Feed
33.9
37.2
39.2
24
Tobacco
35.2
27.9
21.1
25
Salt; Sulfur; Earth, Stone
8.5
4.5
8.7
26
Ores, Slag, Ash
3.8
4.0
5.0
27
Mineral Fuel, Oil Etc
28.5
30.3
42.6
28
Inorg Chem; Rare Earth mt
48.9
61.9
73.5
29
Organic Chemicals
147.8
113.1
107.0
30
Pharmaceutical Products
25.0
29.9
39.4
31
Fertilizers
6.6
6.0
5.5
32
Tanning, Dye, Paint, Putty
16.8
20.3
17.2
33
Perfumery, Cosmetic, etc
32.2
29.7
37.0

---

CRS-36
Description
2004
2005
2006
34
Soap, Wax, Etc; Dental Prep
25.5
27.7
32.6
35
Albumins; Mod Starch; Glue
9.2
8.0
10.7
36
Explosives
5.9
3.6
3.7
37
Photographic/Cinematography
3.2
4.6
4.2
38
Misc. Chemical Products
67.0
76.8
73.8
39
Plastic
217.1
222.2
208.4
40
Rubber
16.0
34.1
45.4
41
Hides and Skins
0.2
0.1
0.1
42
Leather Art; Saddlery; Bags
1.9
2.6
3.0
43
Furskin+ Artificial Fur
0.0
0.0
0.0
44
Wood
39.0
30.1
29.7
45
Cork
0.1
0.1
0.0
46
Straw, Esparto
0.2
0.0
0.0
47
Woodpulp, Etc.
25.0
26.4
28.1
48
Paper, Paperboard
63.2
71.7
67.5
49
Book+ Newspaper; Manuscript
15.9
20.1
18.3
50
Silk; Silk Yarn, Fabric
0.4
0.3
0.5
51
Animal Hair+ Yarn, Fabric
0.0
0.0
0.0
52
Cotton+ Yarn, Fabric
7.2
5.4
8.5
53
Other Vegetable Textile Fiber
0.0
0.0
0.0
54
Manmade Filament, Fabric
3.9
4.0
2.8
55
Manmade Staple Fibers
3.3
2.5
2.9
56
Wadding, Felt, Twine, Rope
9.9
14.7
7.0
57
Textile Floor Coverings
0.6
0.2
0.5
58
Special Woven Fabric, Etc
1.2
0.5
1.0
59
Impregnated Text Fabrics
3.3
3.9
2.9
60
Knit, Crocheted Fabrics
0.2
0.3
0.1
61
Knit Apparel
0.6
0.8
0.3
62
Woven Apparel
1.7
2.4
1.4
63
Misc Textile Articles
3.4
7.0
9.6
64
Footwear
0.4
0.8
0.7
65
Headgear
0.1
0.3
0.3
66
Umbrella, Walking-sticks, Etc
0.0
0.0
0.0
67
Artificial Flowers, Feathers
0.0
0.0
0.0
68
Stone, Plaster, Cement, Etc
6.3
11.7
16.4
69
Ceramic Products
11.7
9.5
4.3
70
Glass and Glassware
25.0
27.0
30.4
71
Precious Stones, Metals
37.2
37.1
48.9

---

CRS-37
Description
2004
2005
2006
72
Iron and Steel
96.2
121.3
211.8
73
Iron/steel Products
28.8
28.0
33.0
74
Copper+ Articles Thereof
29.8
27.4
30.0
75
Nickel+ Articles Thereof
3.2
3.0
4.0
76
Aluminum
44.3
43.5
43.4
78
Lead
3.0
4.4
3.0
79
Zinc+articles Thereof
0.1
0.6
1.8
80
Tin + Articles Thereof
0.7
0.1
6.8
81
Other Base Metals, etc.
6.4
7.8
17.0
82
Tools, Cutlery, of Base Metals
20.9
22.5
28.3
83
Misc Art of Base Metal
29.0
8.6
10.0
84
Machinery
1,375.8
1,744.8
1,687.3
85
Electrical Machinery
6,477.4
5,985.7
7,131.2
86
Railway; Trf Sign eq
8.2
5.5
3.4
87
Vehicles, Not Railway
12.2
15.8
13.7
88
Aircraft, Spacecraft
580.7
255.8
807.3
89
Ships and Boats
0.6
10.5
1.2
90
Optic, not 8544; Medical Instr
637.6
567.8
834.5
91
Clocks and Watches
0.9
1.3
0.9
92
Musical Instruments
0.8
1.2
1.9
93
Arms and Ammunition
1.1
1.3
2.2
94
Furniture and Bedding
11.1
29.8
13.7
95
Toys and Sports Equipment
15.2
19.2
19.6
96
Miscellaneous Manufactures
3.4
2.5
6.3
97
Art and Antiques
0.1
0.2
0.4
98
Special Other
208.8
201.4
231.2
Source of data: U.S. International Trade Commission.

---

CRS-38
Appendix C. U.S. Merchandise Imports from
Malaysia by Two-Digit Harmonized System Codes,
2004-2006
(U.S.$ Millions, CIF values)
HS
Description
2004
2005
2006
Total Imports from Malaysia
29,050.8
34,675.8
37,521.1
01
Live Animals
0.2
0.2
0.1
02
Meat
0.0
0.0
0.0
03
Fish and Seafood
123.8
130.2
152.5
04
Dairy, Eggs, Honey, etc
0.8
0.8
0.3
05
Other of Animal Origin
0.1
0.1
0.1
06
Live Trees and Plants
0.6
0.8
0.8
07
Vegetables
0.2
0.3
0.1
08
Edible Fruit and Nuts
0.0
0.0
0.0
09
Spices, Coffee and Tea
1.5
1.8
3.6
10
Cereals
0.1
0.0
0.1
11
Milling; Malt; Starch
0.1
0.2
0.0
12
Misc. Grain, Seed, Fruit
0.1
0.2
0.3
13
Lac; Vegetable Sap, Extract
0.0
0.2
0.3
14
Other Vegetable
0.0
0.0
0.0
15
Fats and Oils
283.7
343.3
458.0
16
Prepared Meat, Fish, etc
27.2
18.3
21.7
17
Sugars
0.3
1.1
0.7
18
Cocoa
115.7
117.6
113.8
19
Baking Related
9.3
11.1
11.5
20
Preserved Food
10.0
9.4
8.4
21
Miscellaneous Food
4.4
9.6
22.7
22
Beverages
2.3
4.2
6.7
23
Food Waste; Animal Feed
0.7
0.7
4.2
24
Tobacco
1.9
1.0
0.0
25
Salt; Sulfur; Earth, Stone
0.2
0.2
0.2
26
Ores, Slag, Ash
6.0
9.5
10.7
27
Mineral Fuel, Oil Etc
638.1
549.7
457.8
28
Inorg Chem; Rare Earth mt
4.8
14.6
3.7
29
Organic Chemicals
113.1
108.0
94.5
30
Pharmaceutical Products
1.8
1.1
2.8
31
Fertilizers
5.8
13.4
14.7
32
Tanning, Dye, Paint, Putty
8.6
17.7
14.7
33
Perfumery, Cosmetic, etc
4.4
3.9
4.5

---

CRS-39
HS
Description
2004
2005
2006
34
Soap, Wax, Etc; Dental Prep
19.0
21.6
25.3
35
Albumins; Mod Starch; Glue
1.0
0.7
0.6
36
Explosives
0.0
0.0
0.0
37
Photographic/Cinematography
6.6
1.5
3.3
38
Misc. Chemical Products
169.6
184.7
218.1
39
Plastic
104.9
153.3
187.6
40
Rubber
652.1
728.8
866.0
41
Hides and Skins
0.4
0.1
0.3
42
Leather Art; Saddlery; Bags
3.2
5.5
12.0
43
Furskin+ Artificial Fur
0.0
0.0
0.0
44
Wood
407.1
402.0
433.5
45
Cork
0.1
0.0
0.0
46
Straw, Esparto
0.2
0.2
0.0
47
Woodpulp, Etc.
0.0
0.0
0.0
48
Paper, Paperboard
13.0
19.4
19.8
49
Book+ Newspaper; Manuscript
18.2
22.5
21.9
50
Silk; Silk Yarn, Fabric
0.0
0.0
0.0
51
Animal Hair+ Yarn, Fabric
1.2
0.6
0.3
52
Cotton+ Yarn, Fabric
23.5
13.1
11.9
53
Other Vegetable Textile Fiber
0.0
0.0
0.0
54
Manmade Filament, Fabric
16.9
18.0
18.4
55
Manmade Staple Fibers
4.1
3.2
11.0
56
Wadding, Felt, Twine, Rope
14.4
12.5
12.5
57
Textile Floor Coverings
0.0
0.1
0.2
58
Special Woven Fabric, Etc
1.6
2.2
3.3
59
Impregnated Text Fabrics
0.3
0.6
0.6
60
Knit, Crocheted Fabrics
0.2
0.0
0.1
61
Knit Apparel
461.8
462.2
459.2
62
Woven Apparel
310.7
274.7
283.4
63
Misc Textile Articles
5.4
8.3
6.0
64
Footwear
1.8
1.8
2.7
65
Headgear
5.0
3.5
3.1
66
Umbrella, Walking-sticks, Etc
0.0
0.0
0.0
67
Artificial Flowers, Feathers
0.0
0.0
0.0
68
Stone, Plaster, Cement, Etc
3.7
5.3
2.8
69
Ceramic Products
42.0
38.1
36.8
70
Glass and Glassware
14.3
6.8
9.8
71
Precious Stones, Metals
24.0
30.3
30.5

---

CRS-40
HS
Description
2004
2005
2006
72
Iron and Steel
136.8
143.7
323.5
73
Iron/steel Products
82.2
88.2
123.8
74
Copper+ Articles Thereof
39.8
57.5
107.3
75
Nickel+ Articles Thereof
0.1
0.0
0.4
76
Aluminum
55.2
54.5
38.4
78
Lead
0.1
0.0
0.0
79
Zinc+articles Thereof
1.4
1.6
1.0
80
Tin + Articles Thereof
58.1
16.3
4.3
81
Other Base Metals, etc.
0.2
0.0
2.2
82
Tools, Cutlery, of Base Metals
5.3
5.7
5.1
83
Misc Art of Base Metal
19.3
23.0
22.5
84
Machinery
11,569.0
13,130.8
15,229.2
85
Electrical Machinery
11,324.3
15,050.6
14927.4
86
Railway; Trf Sign eq
0.8
0.4
0.9
87
Vehicles, Not Railway
32.8
30.2
32.6
88
Aircraft, Spacecraft
16.4
21.2
27.8
89
Ships and Boats
18.6
20.7
30.3
90
Optic, not 8544; Medical Instr
562.4
630.8
781.9
91
Clocks and Watches
7.8
7.0
1.9
92
Musical Instruments
1.5
2.3
2.0
93
Arms and Ammunition
0.3
0.4
0.5
94
Furniture and Bedding
774.6
914.7
993.8
95
Toys and Sports Equipment
108.2
109.9
96.8
96
Miscellaneous Manufactures
21.7
26.1
26.4
97
Art and Antiques
0.1
0.2
0.5
98
Special Other
313.9
301.4
376.2
99
Other Special Impr Provisions
208.0
247.9
273.6
Source of data: U.S. International Trade Commission

---

CRS-41
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
12,550,114,964
Alabama
27,160,270
24,425,479
32,055,731
Alaska
2,000,206
1,813,626
2,110,093
Arizona
744,014,007
778,635,471
807,939,654
Arkansas
15,263,079
12,050,640
12,353,817
California
2,002,388,800
1,942,191,137
2,513,952,947
Colorado
309,549,133
246,070,261
242,385,175
Connecticut
115,406,682
114,754,076
155,254,165
Delaware
8,580,453
12,072,472
12,631,167
District of Columbia
5,640,896
6,039,473
4,385,022
Florida
203,539,271
231,743,583
173,148,221
Georgia
85,386,931
84,660,541
63,860,742
Hawaii
96,903
7,930,844
8,729,921
Idaho
76,218,522
150,169,568
152,678,546
Illinois
261,480,753
233,014,823
321,274,991
Indiana
70,243,195
75,637,157
84,684,105
Iowa
31,229,324
34,417,553
36,166,670
Kansas
12,203,078
43,921,675
31,366,494
Kentucky
101,566,265
105,452,644
104,453,457
Louisiana
86,285,530
93,281,049
98,725,028
Maine
338,618,230
364,620,488
673,323,738
Maryland
21,166,814
20,541,456
21,148,459
Massachusetts
647,796,147
617,424,506
535,218,544
Michigan
107,150,107
76,433,815
61,516,319
Minnesota
125,381,273
185,478,087
188,188,446
Mississippi
6,050,965
7,761,611
9,551,863
Missouri
39,145,703
53,055,452
49,591,784
Montana
7,115,256
7,299,633
5,299,170
Nebraska
10,647,856
7,694,801
10,251,464
Nevada
20,619,915
36,558,369
67,638,870
New Hampshire
28,324,662
23,599,334
31,681,570

---

CRS-42
State
2004
2005
2006
New Jersey
68,544,266
79,902,011
63,340,489
New Mexico
224,757,438
342,690,777
490,070,276
New York
262,615,745
239,089,398
261,746,725
North Carolina
224,306,679
182,297,150
141,396,851
North Dakota
1,693,282
1,042,341
835,254
Ohio
95,680,748
119,244,964
83,616,979
Oklahoma
10,676,189
16,839,087
14,238,542
Oregon
496,119,486
914,641,433
1,215,184,557
Pennsylvania
169,800,898
169,153,558
181,489,006
Puerto Rico
12,850,147
23,768,292
16,792,176
Rhode Island
10,376,932
15,151,515
10,424,503
South Carolina
53,346,819
71,598,593
67,769,659
South Dakota
5,570,883
6,527,987
4,783,698
Tennessee
77,969,653
128,416,941
165,627,371
Texas
2,552,312,853
1,755,128,948
1,952,756,060
Utah
39,977,110
49,548,407
29,682,822
Vermont
102,461,173
123,452,142
189,630,719
Virgin Islands
0
120,041
6,680,464
Virginia
146,447,729
86,692,347
57,529,454
Washington
559,023,402
214,293,330
757,707,760
West Virginia
12,735,157
23,059,667
8,463,557
Wisconsin
77,893,113
119,143,320
127,042,669
Wyoming
12,875,861
17,680,970
15,815,491
Unallocated
168,449,096
152,690,498
175,923,709
Source: World Trade Atlas.

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