*EPF107 05/10/2004
Text: U.S., Malaysia Sign Trade and Investment Framework Agreement
(Agreement is first step for bilateral free trade agreement talks) (1120)

The United States and Malaysia signed a bilateral trade and investment framework agreement (TIFA) on May 10, according to an announcement released by the Office of the United States Trade Representative (USTR) the same day.

USTR Robert Zoellick and Malaysian Minister of Trade and Industry Dato' Seri Rafidah Aziz signed the agreement, which authorizes the creation of a Joint Council where trade issues such as intellectual property rights, tourism, information and communications technology, and biotechnology can be discussed. The discussions are expected to strengthen trade ties between the two nations, expanding U.S. access to the Malaysian economy while supporting Malaysia's efforts to diversify its economy, the USTR said. Malaysia is America's 10th largest trading partner.

The two sides also agreed to coordinate in regional and multilateral fora and to work toward the successful conclusion of the global trade talks known as the Doha Development Agenda of the World Trade Organization, according to the USTR.

Bilateral and regional trade liberalization with nations of the 10-member Association of Southeast Asian Nations (ASEAN) has been strongly promoted by the Bush administration since it announced the Enterprise for ASEAN Initiative (EAI) in October 2002. The EAI, intended to support stability and development in Southeast Asia by offering the prospect of free trade agreements (FTAs) between the United States and ASEAN countries that demonstrate commitment to economic reforms and openness, recommends the establishment of TIFAs as a first step in negotiating FTAs. The United States has already signed TIFAs with the governments of Indonesia, the Philippines, Thailand and Brunei Darussalam. The other five countries of ASEAN are Cambodia, Laos, Burma, Singapore, and Vietnam. The United States has an FTA with Singapore.

"This TIFA provides a useful forum to discuss ways to address bilateral trade issues," Zoellick said. "We are pleased with Malaysia's positive response to President Bush's Enterprise for ASEAN Initiative. We look forward to working closely with Malaysia to further strengthen our economic relationship bilaterally and within ASEAN."

Following is the text of the USTR's announcement:

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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
EXECUTIVE OFFICE OF THE PRESIDENT
WASHINGTON, D.C.

USTR PRESS RELEASES ARE AVAILABLE ON THE USTR WEBSITE AT www.USTR.GOV
2004-37

FOR IMMEDIATE RELEASE:
CONTACT: RICHARD MILLS/NEENA MOORJANI
May 10, 2004
(202) 395-3230

United States and Malaysia Sign Bilateral Trade and Investment Framework Agreement

5th TIFA Signed with ASEAN Member

WASHINGTON - U.S. Trade Representative Robert B. Zoellick and Malaysia's Minister of International Trade and Industry Dato' Seri Rafidah Aziz signed a Trade and Investment Framework Agreement (TIFA) today that will provide a bilateral forum to address trade issues and to help enhance trade and investment between the two countries.

"This TIFA provides a useful forum to discuss ways to address bilateral trade issues. The goal is to enhance trade between our nations as Malaysia seeks to diversify its economy," said Zoellick. "We are pleased with Malaysia's positive response to President Bush's Enterprise for ASEAN Initiative. We look forward to working closely with Malaysia to further strengthen our economic relationship bilaterally and within ASEAN."

The TIFA creates a Joint Council to expand and liberalize trade and investment. This includes areas such as intellectual property, information and communications technology, biotechnology policy, tourism, enhancing the participation of small- and medium- sized enterprises in trade and investment, and support for Malaysia, America's 10th largest trading partner, to participate in and implement trade negotiations. TIFAs can help focus attention on trade issues which often includes barriers that the U.S. faces, and, therefore, can help expand U.S. access. The two sides also agreed to coordinate in regional and multilateral fora, including working toward the successful conclusion of the global trade talks, commonly known as the Doha Development Agenda.

The ministers directed their staffs to form the Joint Council and to move ahead to begin implementing the work program contained in the Agreement. The United States has TIFAs with a number of countries in order to enhance bilateral trade ties and coordinate regionally and multilaterally through regular senior-level discussions on trade and economic issues. In addition to the TIFA signed with Malaysia today, within ASEAN (the Association for South East Asian Nations) the United States has TIFAs with Indonesia, the Philippines, Thailand and Brunei Darussalam.

The United States uses TIFA discussions to address trade issues of longstanding concern and often to establish the necessary conditions for movement toward an FTA. For example, the U.S. and Thailand have held numerous meetings under the U.S. - Thailand TIFA, signed in October 2002, including four Ministerial-level meetings. Under the TIFA, the U.S. and Thailand have focused in particular on action plans to address U.S. concerns regarding Thailand's IPR and customs regimes. Based on this progress and Thailand's commitment to opening its economy, President Bush announced in October 2003 the U.S. intention to seek to negotiate an FTA with Thailand. An FTA will encourage continued trade and investment liberalization, economic and regulatory reform, high standards of intellectual property protection, transparency, and the rule of law.

Background:

Under the Enterprise for ASEAN Initiative (EAI) announced in October 2002, the United States offered the prospect of bilateral free trade agreements with ASEAN countries that are committed to the economic reforms and openness inherent in an FTA. The United States and each ASEAN partner would jointly determine if and when they are ready to launch FTA negotiations. ASEAN countries include: Cambodia, Vietnam, Thailand, Indonesia, Malaysia, Philippines, Laos, Singapore, Brunei Darussalam and Burma. Within ASEAN, the United States has an FTA with Singapore.

The United States is aggressively working to open markets globally, regionally, and bilaterally and to expand American opportunities in overseas markets. In a January 2004 letter to the 146 WTO members, Zoellick urged Members to revive the global trade talks. In February Zoellick traveled over 30,000 miles and met with over 40 WTO members in strategic consultations. Immediately following that trip, Zoellick traveled to San Jose, Costa Rica for meetings February 23-24 with ministers from the Cairns Group of agriculture exporting countries to discuss liberalizing trade in agriculture within ongoing World Trade Organization (WTO) trade negotiations.

Over the past few months, the U.S. has completed FTAs with eight countries - Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Australia and Morocco; is negotiating FTAs with Panama and Bahrain and will begin negotiations soon with Colombia, Peru, Ecuador, the SACU countries (S. Africa, Lesotho, Botswana, Swaziland and Namibia) and Thailand. New and pending FTA partners, taken together, would constitute America's third largest export market and the sixth largest economy in the world.

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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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