Malaysian Manufacturers Can Compete With China Under New Trade Pact

June 16, 2006
A trade agreement with the U.S will allow Malaysian manufacturers to compete against China which enjoys a lower cost advantage. Malaysia and the U.S. concluded the first round of the Free Trade Agreement (FTA) talks in the northern resort island of ...

A trade agreement with the U.S will allow Malaysian manufacturers to compete against China which enjoys a lower cost advantage. Malaysia and the U.S. concluded the first round of the Free Trade Agreement (FTA) talks in the northern resort island of Penang on June 16.

"Preferential treatment gained through the FTA will provide Malaysian manufacturers the competitive advantage over competitors that are able to produce at lower cost such as from China," the Federation of Malaysian Manufacturers (FMM) said in a statement.

Throwing its support behind the Malaysia-US FTA, FMM said the U.S. should cut import duties on footware, textile and ceramic tableware. "While U.S. import duties are generally low for manufactured goods, there are some products of interest to Malaysian manufacturers that have high import duty such as footware, textile, apparel and ceramic tableware," it said.

FMM also said exports of textiles and clothing from Malaysia to the U.S. remained relatively unchanged in 2005 at 2.93 billion ringgit (US$813 million) compared to 2.94 billion in 2004.

The U.S. remains the leading destinations for Malaysian exports accounting for 19.7% of total exports. Among Malaysia's main exports are electrical and electronics, wood and rubber products.

Earlier last week, the U.S. delegation signaled that it would press for concessions in Malaysia's protected automotive industry and the finance sector, and push for more transparency in government procurement procedures.

Copyright Agence France-Presse, 2006

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