A free trade agreement with Malaysia would be the third free trade agreement negotiation between the United States and a Southeast Asian nation after the U.S.-Singapore Free Trade Agreement, which came into force on January 1, 2004, and a proposed free trade agreement between the United States and Thailand, whose negotiations are currently stalled. The United States also has a free trade agreement with Australia and is negotiating a free trade agreement with South Korea. On 10 May 2004, the United States and Malaysia signed a framework agreement on trade and investment.96 Malaysia, through its economy and trade, plays a role in the interests of the United States; their role in the fight against radical Islamist organizations; the example it sees as a secular democratic Muslim state; their position as a member of ASEAN, the Asia-Pacific Economic Cooperation (APEC) and other multilateral for a; its common interest in dealing with an emerging China; 73 According to the Malaysian Ministry of Finance, the United States is its largest trading partner and largest foreign investor. According to U.S. trade figures, Malaysia was the 10th largest trading partner of the United States in 2007. In the first eleven months of 2008, the United States exported more to Malaysia than to Colombia or Peru, two other nations with outstanding free trade agreements with the United States. In the first ten months of 2008, U.S. investment in Malaysia amounted to $1.8 billion, the second largest source of foreign investment in Malaysia, after Australia.100 The U.S. Trade Representative announces and informs Congress of the Bush administration`s intention to negotiate a free trade agreement between the United States and Malaysia.
When the discussions began, the USTR`s goal was for the U.S.-Malaysia Free Trade Agreement to be considered by Congress as part of the Bipartisan Trade Promotion Authority (TPA) Act 2002 (P.L. 107-210).101 However, the law requires the President to inform Congress of his intention to conclude the agreement at least 90 calendar days before the conclusion of the trade agreement. Given that on July 1, 2007, the Presidential Trade Development Authority expired and the President did not notify Congress as of April 2, 2007, the U.S.-Malaysia Free Trade Agreement was no longer eligible to be considered under TPA 2002. The average tariff applied is calculated by deifying the tariff rate by the value of imports. Average unit rates are commonly used indicators for the actual level of customs protection in a country. These rates may be slightly lower than MFN rates, because high-rate items may not be introduced at all (so that no tariffs are paid) and because a nation may have specific trade agreements with other nations under which partners pay lower or not at all tariffs on their exports. They may also be higher when importers purchase expensive goods (such as machinery or automobiles) that are priced at higher rates. In Asia, Malaysia has already concluded free trade agreements with Japan and Singapore and is negotiating free trade agreements with Australia, India, New Zealand and Pakistan. Meanwhile, China has signed a free trade agreement with ASEAN, which includes Malaysia, which includes a trade in services agreement, which came into force in July 2007.
The proposed free trade agreement with the United States would place U.S. exporters on a similar basis to exporters from China, Japan and Singapore – Malaysia`s other major trading partners. Today, the United States and Malaysia share a diverse and growing partnership in trade, investment, security, environmental cooperation and education and cultural relations. Malaysia has a diverse democracy and is an important partner in the U.S. commitment to Southeast Asia. The two countries work closely together on security issues, including counter-terrorism, maritime awareness and regional stability, and participate in the