26/6/06 (The Edge News)  -  The US-Malaysia free trade agreement (FTA) can be concluded by year-end as major benefits far outweigh any negative impacts, according to US-based Trade Adjustment Assistance Coalition (TAAC) executive director Howard Rosen.

“Both parties would not have started negotiations if we did not think it will be concluded successfully in time. The bottom line is that there is no room for posturing,” he said at a press briefing in Kuala Lumpur on June 26.

He said the US-Malaysia FTA was likely to benefit an exporting-nation like Malaysia. Malaysian exports to the US account for more than half of the former's total exports.

The sectoral issues in the US-Malaysia FTA are agriculture (palm oil and rice); services (higher education, tourism and travel, financial services and professional and business services); and the automotive market.

However, he said the major concern would be the strong pharmaceutical lobby, which represents the major drug manufacturers in the US, “which could hijack the FTA talks”.

Rosen, who was in Bangkok recently to attend the US-Thailand FTA talks, said pharmaceutical was a "very big" issue due to the large number of HIV cases there.

At the US-Thailand talks, the US drug makers had attached intellectual property rights (IPRs) issues to pharmaceuticals, when in the past IPRs were mainly for entertainment, computers, and DVDs and CDs.

Rosen, who will present a paper on the “US-Malaysia FTA: Prospects for economic integration and prosperity” in Kuala Lumpur on June 27, said the US negotiating authority would expire in July next year and there was not much time left to conclude the talks.

On the economic front, he said the US economy could slow down over the next two years and hence, this could see more protectionism, instead of trade liberalisation.

Meanwhile, the Ministry of International Trade and Industry (Miti) said in a statement on June 26 that Malaysia has requested for early duty elimination for textiles and garments, rubber and wood, ceramics, electrical and electronics and agricultural products, with current duties ranging from 5% to 32%, at the recent FTA negotiations.

“Tariffs on non-sensitive products have been proposed to be eliminated faster while sensitive products be given flexibility," it said, adding that the first round of the talks, held on June 12 to 15, covered 18 issues.

“Both sides also proposed that there should be adequate safeguard provisions to allow for remedial measures to be taken should injury to domestic industries occur as a result of liberalisation,” it added.

However, Miti said discussions were still at preliminary stages for areas such as environment, competition policy and intellectual property rights.

It added that Malaysia was seeking longer time frames for liberalisation of sensitive products and services sectors, and flexibility to undertake policy measures for its developmental needs.