Malaysia's trade minister said today free trade talks with the United States will continue and both parties are trying to set a date for the next round of negotiations before a crucial deadline.

Trade Minister Rafidah Aziz said she and her counterpart, US Trade Representative Susan Schwab, had discussed when to hold the next meeting after earlier fears that negotiations may have deadlocked.

"Things are moving forward ... I have asked Susan to direct her chief negotiator to now discuss with my chief negotiator when we can continue," Rafidah told reporters.

Washington is racing to conclude the FTA by the end of March to give the US Congress the requisite time of three months to consider the deal.

The FTA must be passed before July 1, when US President George W. Bush loses his Trade Promotion Authority (TPA) which allows deals to be fast-tracked. Washington fears a Democrat-controlled congress will not renew the authority.

"Time is of the essence. It's unfortunate they have the TPA," Rafidah said, acknowledging the US deadline.

She added the government wanted to "try our very best to work within the timeframe provided to us."

Sensitive or 'no go' issues

The minister said Malaysia would attempt to resolve the 58 "outstanding issues" that arose and bogged down the fifth round of talks held two weeks ago.

Rafidah said she advised government ministers on Wednesday on the status of the FTA negotiations and had requested that the relevant ministries review the issues.

She said sensitive or "no-go" issues, such as Malaysia's positive discrimination policies for its majority ethnic Malays, would be excluded from the next round of negotiations.

"The attitude of our government is that as long as the basic issues that are non-negotiable - such as the native Malay policies - are not compromised, the rest can be negotiated," she said.

Rafidah added both countries had agreed that the next meeting "may not be the full scale negotiations" and "could be just sectorial".

She did not elaborate on the nature of the 58 contentious issues except to say they involved the ministries of trade, agriculture, labour, science and technology, finance and environment.