KUALA LUMPUR, Nov 12 (Bernama) -- International Trade and IndustryMinister Datuk Seri Rafidah Aziz says countries should not base theirbilateral relationships on the basis of contracts given to theircompanies.

As such, she said she did not expect India to retaliate over the failureof one Indian company in getting a double-tracking rail project inMalaysia by not buying Malaysian palm oil.

"It is Malaysia's prerogative in awarding anything as the buying andselling of products in a market place is a market place decision," shetold reporters when asked on a possible retaliation by India and China onMalaysian palm oil exports.

This followed the award of the rail project to the Malaysia MiningCorporation Bhd (MMC)-Gamuda Bhd consortium which was reported to havesubmitted the best bid in terms of cost. This had given rise to somecontroversy as both the Indian Railway Construction Co (IRCOM) and ChinaRailway Engineering Group (CREG) were part of another consortium which hadearlier received letters of intent from the Malaysian government toundertake the rail project.

It was reported that payment for the rail contract was to come in the formof Malaysian palm oil exports in that both countries would import the palmoil equivalent to the value of the rail contract in agovernment-to-government deal.

Rafidah, who had earlier opened "Automechanika Asia" or Asia'sInternational Automotive Trade Fair here today, said Primary IndustriesMinister Datuk Seri Dr Lim Keng Yaik was currently looking into thematter.

"We should not pre-empt whatever it is as a retaliation (from India andChina). I am sure they would not want to stop buying (Malaysian palm oil)simply because their companies did not get the (rail) contracts. That'snot the way economic relationships are evolved between countries," saidRafidah.

She said there were many ways and means of getting products in the marketplace and there was no reason for India not to buy palm oil if Malaysianexporters could aggressively market its products and be competitive in itspricing.

"It's a private sector purchase. If there are duties levied (by theimporting countries), that is their prerogative because if other countriescan sell their products with the same duties, why can't we?" she asked.

Rafidah said Malaysian exporters should not only look at India but thewhole world as its market place and they should aggressively pursue theirmarketing efforts.

In agreeing that the issue had been blown out of proportion, she saideconomic relationships between countries were not bound by contracts norwere they based by giving contracts to each other.

"If relationships are based on that, we will never form alliances amongourselves," she said.

Rafidah said there were times when contracts could have been awarded as inthe past but that did not mean that Malaysia was committed towards givingawards to selected companies and countries.

"A whole lot of other things are involved in the bilateral relationshipwith India," she added.

Rafidah said she did not think that the Indian government was going tomake the basis of bilateral relationship on something as flimsy ascontracts.

"That will be a porous and fragile relationship," she said.

She said countertrade should therefore not be the norm, adding that bothcountertrade and product exchange should be regarded as just other avenuesto sell Malaysian products.

-- BERNAMA