Trade Between the United States and Malaysia

The United States and Malaysia trade many products since the 1960s. The US exported to Malaysia 93,000 dollars in soybeans, 108,184 dollars in dairy products and eggs, 525,602 dollars in steelmaking materials, 163,461 dollars in plastic materials, 131,230 dollars in organic chemicals, 245, 501 dollars in generators and accessories, and 111,964 dollars in medicinal equipment. Malaysia imports electronics, machinery, petroleum products, plastics, vehicles, iron and steel and iron and steel products, and chemicals. Malaysia was the United States’ 21st largest goods export market in 2008. U.S. goods exports to Malaysia in 2008 were $12.9 billion. U.S. goods and services trade with Malaysia totaled $48 billion in 2007. Exports totaled $14 billion. Imports totaled $34 billion. The U.S. goods and services trade deficit with Malaysia was $20 billion in 2007. Malaysia was the United States’ 15th largest supplier of goods imports in 2008. The U.S. goods trade deficit with Malaysia was $17.8 billion in 2008. The U.S. goods trade deficit with Malaysia accounted for 2.2% of the overall U.S. goods trade deficit in 2008.

The United States and Malaysia initiated negotiations on a Free Trade Agreement (FTA) in June 2006. 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:
Competition, since Malaysia is one of the expanding markets in Asia, there is that assumption that US is a bit threatened of its standing in world economy. This was even supported by facts of its rivalry with that of Europe, Japan and China. Some Malays felt that the Americans are doing trade with them to be able to maintain its leadership in the global economy scene.
Negotiation, again, Malays think that Americans are favored while the negotiation is being pushed through. They feel that there are more representatives from the US who were working for their own interests in the trading market. They also think that the US community are updated and consulted while the Malays know nothing about what is going on behind the negotiations.

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.

It ranks as one of our top 15 trading partners, with two-way goods trade between us of more than $40 billion. Two-way trade in services adds another $3.3 billion. The accumulated stock of U.S. foreign direct investment in Malaysia is more than $13 billion, much of it in the manufacturing sector. We have a positive trade and investment dialogue on all fronts, and we are eager to continue working with Malaysia to broaden and deepen our economic relationship in the years ahead.


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Trade in Goods (Imports, Exports and Trade Balance) with Malaysia. Web. 4 Feb. 2010. .

US-Malaysia Trade Relations: A Diverse and Expanding Partnership. Web. 4 Feb. 2010. .

Background Note: Malaysia. Web. 4 Feb. 2010. .

WTO Trade Policy Review of Malaysia. Web. 4 Feb. 2010. .