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Re: [ossig] Re: [myoss] Speech on 9th Malaysia Plan(9)-FTAs - one-sidedagreements?

Malaysia's Mahathir warns trade deal with US may harm economy

KUALA LUMPUR (AFX) - Former Prime Minister Mahathir Mohamad has warned 
that a free-trade agreement (FTA) with the United States may harm the 
economy and constrain government policy.

'I worry the FTA with the US may have an adverse effect on us,' Mahathir 
told reporters.

The two countries announced early this month that they were to begin FTA 
talks after Washington worked out accords with some 14 other countries, 
including Singapore and Australia.

Mahathir said he is concerned over any FTA because the United States is 
looking in particular at government procurement, a key area which had 
been used in the past to promote the economic standing of native Malays 
or Bumiputras.

'I understand the Americans are particularly interested in government 
procurement. They want to be able to access government procurement but 
we have used government procurement in order to correct the (economic) 
imbalances under the New Economic Policy (NEP) to give the Bumiputras a 

'If we lose that we will not be able to correct the (imbalances),' he said.

Malaysia's population of 25 mln is 60 pct ethnic Malay, with Chinese and 
Indians the minority races.

Under an affirmative action plan introduced from 1970, Malays and other 
indigenous groups receive economic, education and other benefits to 
narrow the wealth gap with the Chinese.

Racial policies were a major component of Mahathir's policies during his 
tenure as prime minister from 1981 to 2003.

However, successor Prime Minister Abdullah Ahmad Badawi last year said 
it had led to a culture of dependency, with Malay businesses relying on 
government handouts.

Malaysia signed an FTA with Japan last December and has began talks with 
Australia, New Zealand and Pakistan.

Mahathir also said that the FTA with Japan, a key trading partner, is 
not beneficial to Malaysia.

'In the FTA with Japan, we will import Japanese manufactured goods 
including motorcars; in exchange we can export vegetables and fruits. We 
are not the greatest producers of vegetables and goods. These are low 
value things.

'It would seem to me the FTA with Japan is not beneficial to us,' he said.

Japan is among one of Malaysia's top trading partners, after the United 
States, and one of the biggest investors here.

According to US government figures, two-way trade totalled 44.2 bln usd 
last year, with Malaysia enjoying a surplus of 23.2 bln usd thanks to 
booming shipments of raw materials and electronics.

ref: http://www.forbes.com/business/feeds/afx/2006/03/22/afx2612263.html

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