The two-way trade volume between Malaysia and the United States (US) could double by 2010 under a Free Trade Agreement (FTA), said deputy US trade representative Karan Bhatia today.

"Our National Association of Manufacturers has estimated that under a FTA, the two-way trade could be more than double by 2010," he told a press conference in Kuala Lumpur.

He said the potential growth will be across the spectrum but focused mainly on manufacturing, agriculture and services.

Karan ( right ), who is in Malaysia to continue preparations for the first round of discussions between the two nations on the FTA, said the priority similar to its negotiations with other countries was to lower the tariff to zero.

"The priority, I think first of all, what we are trying to do in our FTA is to lower the tariff to zero basically in our negotiations," he said.

Last week, US trade representative Rob Portman and International Trade and Industry Minister Rafidah Aziz announced that both countries are launching talks to hammer out a trade deal.

Focus is on Asia

Asked about the protective auto and finance sectors in Malaysia, Karan expressed hope there will be access to these and the US is trying to find a way to work through those issues.

"Right now there is really almost no trade in bilateral automobile, US exports effectively zero cars to Malaysia and Malaysia likewise to US.

"We'd like to see a greater degree of cooperation and a greater degree of integration of those markets in a way that will benefit both Malaysia and US," he said.

The US already has FTAs with Singapore and Australia. FTA negotiations are ongoing with Thailand and will start with South Korea in June

In a related development, AFP reported that while the US is running out of time for additional FTAs in Asia over the 2007 deadline, Karan had expressed hope for an eventual 'web of FTAs' in the region.

"It's a very ambitious agenda I know, but I think it's one that is very, very important for the US' own economic future," he said.

Malaysia is the US' 10th largest trading partner. Last year, the two-way trade between the two countries was worth US$44 billion.