US automakers set big goal for Malaysia trade talks http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2006-05-03T185725Z_01_N03386579_RTRUKOC_0_US-TRADE-MALAYSIA-USA.xml&archived=False
Wed May 3, 2006
By Doug Palmer
WASHINGTON (Reuters) - The United States should press for comprehensive reform of Malaysia's highly-protected auto sector in free trade negotiations next month, a spokesman for U.S. automakers said on Wednesday.
"The Malaysian automotive market is the most unique in the world today," Stephen Collins, president of the Automotive Trade Policy Council, said at a Bush administration hearing in preparation for the first round of U.S.-Malaysia free trade talks the week of June 12.
U.S. automakers have been essentially shut out of the second-largest auto market in Southeast Asia because of Kuala Lumpur's decision two decades ago to create a Malaysian-owned and operated automotive industry, Collins said.
The government has used layers of protective and discriminatory policies to shield its "two chosen and heavily subsidized national auto companies, Proton and Perdua," from foreign competition, Collins said.
Last month, Malaysia unveiled a new national auto policy that U.S. automakers believe is an encouraging step toward liberalization of the industry, Collins said.
"But these reforms have to be understood in the context of a government that has totally controlled this industry for decades, and still clearly intends to hold on to many protections for its local producers," he said.
The United States and Malaysia launched free trade talks in March with the ambitious goal of finishing by the end of the year. Malaysia is already the United States' tenth largest trading partner, with over $44 billion in two-way trade in 2005.
"We know that we have significant work ahead, but are optimistic that the two sides can complete this agreement in the time that we have," Barbara Weisel, assistant U.S. trade representative for the Asia Pacific, said at the hearing.
The Bush administration panel heard from various manufacturing groups that also supported the pact, although the dwindling U.S. athletic and rubber shoe industry warned against cutting tariffs on imports from Malaysia.
U.S. film, music and software industries asked negotiators to include strong criminal penalties and other measures in the pact to reduce high rates of piracy in Malaysia.
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