How The Partnership Flourished
Malaysia is a country found in the Southeast Asian region. It is the southernmost nation of the said area and is notable for its very sound economy. As a developing nation though, it had its own share of downfalls. One fact that supports this statement is the slowing down of economic growth in the 1980's due to decreasing prices and demand for its prime export commodities. Agriculture played a vital role in its development with rice as its major subsistence crop. Around two-thirds of Malaysia's exports earnings relied upon rubber and tin until the 1960's. Back then, it supplied about one-fourth of the world's tin. Recently, the market had improved with petroleum from offshore reserves as well as palm oil comprising bulk of its exports. After the 1960's, the industrial sector boomed rapidly. Electronic components especially semiconductor chips led the manufacturing side. Other essential industries are electrical machinery and textiles and clothing. Malaysia patterned its government with the British system though it had federal policies on its own. Despite following the pattern of the Britons, Malaysia did not hinder itself from negotiating with other vital nations in world trade. Since the country and its officials believe in independence, it welcomed free trade with a big hand. As part of this, it had strengthened an alliance through diversity and expansion with that of United States. The US now ranks as Malaysia's largest trading partner and foreign investor. Foreign American firms on Malaysian ground focused on electronics, machinery, energy and manufacturing. The Asian country on the other hand, ranks tenth among all foreign trading partners of the US. With more than $40 billion amount of trade between the two nations, a friendship flourished. As of June 2006, the two governments had launched a negotiation for bilateral free trade between the two nations. Major Exports and Imports Between Malaysia and US The primary export commodities of Malaysia to other nations in international trade are electronic equipment, wood products, petroleum, liquefied natural gas, rubber, palm oil, chemicals and textiles. The major export partners are US, Singapore, Japan, China, Hong Kong and Thailand. Malaysian imports from other countries are comprised of electronics, petroleum products, vehicles, iron and steel, machinery, plastics and chemicals. Its primary suppliers are Japan, US, Singapore, China, Taiwan, Thailand, South Korea and Germany. The US Census Bureau has recorded the trade of US with respect to other nations. Regarding the country's trade with Malaysia, the total amount of exports as of October 2008 was recorded at $11.31 billion while the imports from the said Asian nation made $26.69 billion on US grounds. For the year 2007, the following statistical data are available:
Since their partnership, Malaysia and the United States have not yet made any trade agreement for their business. Currently on the works is the Free Trade Agreement (FTA) which was launched in June 2006. Among the vital portions of negotiating this pact included proposals on several issues such as:
The original Trade and Investment Framework Agreement between Malaysia and the United States started in 2004. Several years after the plans were made, there is still no concrete trade agreement governing the business relations of the two parties. With this, several conflicts were encountered and the barriers raised a lot of concerns. Export subsidies, intellectual property rights, pharmaceutical matters and other services were the main issues which also needed to be settled. The reason for not coming up with a concrete Free Trade Agreement is intensified by several speculations on who will really benefit from the trade. Obviously, on the Malaysian side, critics have been intensifying issues saying that the US gains more if not most of the advantages of the FTA. Some of the issues presented were:
While the US-Malaysia FTA and its objectives have not been realized yet, there is nothing that the two governments should be worried about. After all, their government officials are the ones dealing with each other hence they know very well what transpires during their discussions. Pushing through with the FTA is possible without thinking about what critics are saying. More trade opportunities for US in Malaysian markets can be concentrated on. One good thing that Americans should take advantage of is Malaysia's hosting of the 2009 Global Outsourcing Conference. This is to be held to provide techniques on how to solve the global economic crisis which had affected a lot if not all of the nations in the world. This is a good way to start picking up the missing pieces of the puzzle. The closure of large financial institutions in the US during the current year (2008) had made its way to hamper businesses in a lot of countries. With Malaysia's concern to the existing problem, the 2009 Global Outsourcing Conference will tackle issues that will lead to outsourcing opportunities. The conference opens chances for employment not only for the benefit of the Asian continent but for the entire world as well. Malaysia was chosen to handle the Asian leg because of the success of the Information Technology World Congress held last May 2008. This is something that the US should look forward to. US-Malaysia Trade References
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Note: Trade statistics, industry links, economic projections and global business resources on this page have been compiled from hundreds of trade related websites, government guides and resources on the Internet. We provide this valuable information for industrial suppliers, manufacturers, exporters and importers seeking to enter or expland business opportunities in Malaysia.
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