The Federation of Malaysian Manufacturers (FMM) said that a trade pact with the US would benefit Malaysian manufacturers of footwear, textile, apparel and ceramic tableware.

FMM said such products are of interest to Malaysian manufacturers but are traditionally bogged down by high import duties.

"Elimination of these duties enables Malaysian products to gain better access into the US market," said FMM in a statement of support for a Malaysia-USA free trade agreement (FTA).

The organisation added that the FTA would also attract foreign investors, including US companies, to locate their investments in Malaysia for purpose of exporting to the US, should preferential tariffs exists.

"Undoubtedly, the FTA will enhance Malaysia's position as an attractive location for global production and hence will create more job opportunities and other technological and economic spin-offs for the country," it said.

Talks in progress

Presently, Malaysia and their US counterparts have gone through two out of five scheduled rounds of trade talks which began in July and topics covered intellectual property rights, textiles and clothing, e-commerce, telecommunications, legal services and environment. .

The subsequent rounds of talks on Sept 17, Oct 30 and Dec 11 are scheduled for completion before the expiry of the US Trade Promotion Authority in June 2007, when Congress will regain the right to amend any trade pact.

The US delegation has hinted that it would push for concessions in Malaysia's protected automotive industry and finance sector.

Another politically sensitive area includes Malaysian government procurement procedures, which sees lucrative contracts awarded to bumiputeras, as a form of positive discrimination.

Malaysian International Trade and Industry Minister Rafidah Abdul Aziz however assured Malaysians that the pact would only be inked if "it satisfied the interest of all sectors".

In 2005, the US was Malaysia's largest trading partner, accounting for 16.6 percent of Malaysia's global trade and is US 10th largest trading partner.