US-Malaysia Free Trade Agreement

U.S. – Malaysia Free Trade Agreement

U.S. – Malaysia Free Trade Agreement

In 2005, the United States and Malaysia announced that they would begin negotiations on a bilateral free trade agreement to eliminate trade barriers between the two nations. Negotiations continued throughout 2006 and then were halted after April 2007. Some of the unresolved issues include financial services, intellectual property, competition policies, government procurement and labor.

During the third round of negotiations held in Kuala Lumpur, the United States offered to open about $250 billion worth of procurement to Malaysia under the proposed FTA.  Since the two countries launched the FTA talks in mid-2005, six rounds of negotiations have been held so far with the last meeting in Washington in April 2007.

Both countries had hoped to reach a deal by early 2007. But talks were delayed by a change in Malaysia’s lead negotiator and Kuala Lumpur’s hesitation to open the country’s government procurement market to more U.S. companies.

Malaysia is currently the United States’ 22nd largest export destination, with $56.65 billion in 2020. The U.S. exported $12.49 billion to Malaysia, with top export categories being computers,  chemicals, waste and scrap, and transportation equipment. In 2020, California exported $2.1 billion to Malaysia, comprising 16.8 percent of U.S. exports in goods to the country.

Malaysia’s leading exports to the United States include computers and electronic products making up 58.9% of the total.

According to the U.S.-ASEAN Business Council, it is expected to take at least two more formal rounds of the negotiations to finish a deal.

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