MIDA: MALAYSIA UPHILL Task Getting FDIs Pressing Ahead With Record 2006 Approvals; Cabinet Final Say-M'sia-US FTA Talks over Procurement & Services

UPDATE: Feb16 2007

February 15, 2007 21:39 PM
Cabinet To Decide On Some Of M'sia-US FTA Issues

KUALA LUMPUR, Feb 15 (Bernama) -- The latest position of the Malaysia-United States free trade arrangement (FTA) negotiations will be presented to the Cabinet, said International Trade and Industry Minister Datuk Seri Rafidah Aziz Thursday. She said the Cabinet ministers were briefed on the negotiations yesterday but there were certain things that would have to be decided later by the Cabinet. "There are some things which we didn't decide, which will be decided at the Cabinet level when I present the papers.

The cabinet will relook and decide," she told a press conference after chairing the Wanita Umno Exco meeting, here today. Rafidah said Deputy Prime Minister Datuk Seri Najib Tun Razak, who chaired the meeting yesterday, had indicated that Malaysia wanted to do its best to work within the timeframe provided. The US is keen to conclude talks by March, ahead of the expiry of President George Bush's Trade Promotion Authority in July this year. But several issues have yet to be sorted out.

"For as long as the basic issues that are non-negotiable -- Bumiputera policy, sovereign right of government to make policy -- as long as things like that are not compromised, the rest can be negotiated," she said. At the briefing yesterday, there were 58 outstanding issues, of which 16 issues involved the Ministry of Domestic and Consumer Affairs, while others involved the Ministry of Agriculture and Agro-based Industries, the Human Resources Ministry and several others. "It is not MITI's position alone, it is the position of every ministry and agency involved that constitutes Malaysia's position. "So..it is very important that every ministry and agency concerned, understand the full implications of the position they put forward for the Cabinet and for the government to consider," Rafidah said. Asked whether Malaysia wanted the FTA more than the US, she said:

"It's like getting married, do you want to get married more than he does?" After a very detailed and technical briefing yesterday, Rafidah said she received a call from US Trade Representative Susan C. Schwab from Washington who had indicated that the US was also committed to resuming talks in order to complete the negotiations. She said Susan would direct her chief negotiator, Barbara Weisel to discuss with MITI's secretary-general Datuk Abdul Rahman Mamat as to when to continue their negotiations. The talks may not be the whole full-scale thing but more of discussions on issues that require negotiating. Others could be resolved via phone, she said. A news report today said that several ministries which were involved in the FTA talks have been given a week to submit their views to the Cabinet for further action.

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Malaysia, US race against clock on FTA talks
Thursday February 15, 7:54 PM

KUALA LUMPUR (AFP) - Malaysia's trade minister has said 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 Thursday 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." 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 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
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MIDA REPORT: MALAYSIA UPHILL Task Getting New FDIs Amid Stiff Competition From Other Emerging Economies; Cabinet Final Say-M'sia-US FTA Talks over US demand in Government Tenders & Procurements Policies hurting Malaysia's NEP & Bumiputra Rights. Malaysia wants to have the cake and eat it as well!

Malaysia's strategic importance as an attractive investment destination received a major boost last year when foreign investments in approved manufacturing projects reached a record level of RM20.2 billion -- the highest level chalked up todate compared with RM17.9 billion in 2005 and RM13.1 billion in 2004. Minister of International Trade and Industry Datuk Seri Rafidah Aziz said this at a press conference.

Rafidah says obstacles in FTA talks were likenening to planning a Malay Wedding. The obstacles are more problematic if one of the parties is a convert and the other party refused to compromise on a great number of issues especially in areas of government tenders and procurements which could hurt Malaysia's social policies, especially in regard to Bumiputra rights. No way will the government sacrifice the affirmative NEP for the US government procurement market worth US300 Billion though Baba Food Products are interested to expand their curry powder share.

Japan was the largest source of foreign investment last year, accounting for 4.4 billion ringgit, the highest level since 1996. The second-biggest investor was the Netherlands, with approvals worth 3.3 billion ringgit, followed by Australia with 2.6 billion ringgit and the U.S. with 2.5 billion ringgit

High energy prices are boosting investment in Malaysia, Southeast Asia's second-largest oil and gas producer and the world's biggest palm oil exporter. Rising investment may help bolster economic growth amid slowing overseas demand for made-in-Malaysia electronics.
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MALAYSIA SEES TOUGH CHALLENGE ATTRACTING FDIS GOING

FORWARD - MIDA 13-Feb-2007 12:58:00; from ZOOMFinance

KUALA LUMPUR (XFN-ASIA) - Malaysia expects a challenging task ahead in
attracting foreign direct investments amid stiff competition from other emerging economies. "The task ahead is challenging, and therefore the coordinated effort of all the ministries and departments, and the state governments is necessary, if Malaysia is to maintain its competitiveness and continue to receive high levels of foreign and domestic investments,"

Rafidah Aziz, Minister of International Trade and Industry, said. "The government will continue with its efforts to promote investments in the targeted sectors and services activities," she said, noting that tours to promote trade and investment opportunities in Malaysia for this year will cover the US, Europe, East Asia and Australia. The government approved projects worth about 46 bln rgt in 2006, up from 32 bln in 2005, according to an industrial performance report issued by the Malaysian Industrial Development Authority (MIDA).= = == = = =

February 13, 2007 16:29 PM
Record RM20.2 Bln In Foreign Investments In Manufacturing In 2006

KUALA LUMPUR, Feb 13 (Bernama) -- Malaysia's strategic importance as an attractive investment destination received a major boost when foreign investments in approved manufacturing projects last year reached a record level of RM20.2 billion -- the highest level chalked up todate compared with RM17.9 billion in 2005 and RM13.1 billion in 2004. Besides being its best ever performance in attracting manufacturing investment, it clearly showed that "Malaysia continued to remain an attractive destination for foreign direct investment"

Minister of International Trade and Industry Datuk Seri Rafidah Aziz, announced here today. Taking into account both local and foreign investments, a total of 1,077 projects involving investments of RM46 billion were approved compared with RM31 billion in 1,027 projects in 2005. Approved investments for the manufacturing sector were the highest recorded todate, exceeding by RM18.5 billion the annual target of RM27.5 billion set under the Third Industrial Master Plan (IMP3).

Announcing what is surely a feather in the cap for Malaysia's efforts to woo investments, Rafidah, the longest-serving trade and industry minister in the world, said Japan was the largest source of FDIs with RM4.4 billion last year from RM3.7 billion a year earlier. This was followed by the Netherlands RM3.3 billion (RM1.7 billion); Australia RM2.6 billion (RM155.9 million); the United States RM2.5 billion (RM5.2 billion); and Singapore RM1.9 billion (RM2.9 billion). The electrical and electronics sector continued to attract the larger share of foreign investment amounting to RM8.6 billion or 42.6 percent of the total approved investments, she said at the annual press conference of the performance of the manufacturing and services sectors 2006 by the Malaysian Industrial Development Authority (Mida) here today. Mida is an agency under her ministry.

Rafidah said Malaysia was able to attract several prominent international companies to set-up their regional headquarters here last year including General Electric (US), Eppendorf AG (Germany), Aker Kvaerner Group (Norway), Nippon Electric Glass and Bridgestone Group (Japan), IBA Health Ltd (Australia) and Volvo Cars Malaysia (Sweden). Malaysia also became the regional headquarters for oil and gas companies and has recorded 17 companies having their operational headquarters here. The minister said with the establishment of more regional centres, it could generate spin-off benefits to the economy, in terms of employment, demand for Malaysian products and services, and business opportunities for the insurance, banking and logistics sectors. She said the manufacturing sector expanded by 8.0 percent in the first three quarters of 2006, contributing to 32 percent of the country's gross domestic product (GDP). The non-government services sector grew by 5.9 percent and accounted for 50.7 percent of the country's GDP. The industrial production index (IPI) for the manufacturing sector increased by 7.3 percent to 138.8 in 2006 between January and November.
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February 13, 2007 14:34 PM

Companies Not Investing In Security, Says Rafidah

KUALA LUMPUR, Feb 13 (Bernama) -- Minister of International Trade and Industry Datuk Seri Rafidah Aziz has expressed concern that companies are not investing much in security systems, saying security precautions must be comprehensive covering the whole value chain in a company's operations.

"There is a need for companies to invest in security systems in order to protect their companies," she said when responding to a question that companies have not been investing much in security. Some companies have not taken up security as an important aspect in their business, she told a press conference here today.

Late last year, several companies lost millions following a high-profile robbery at a warehouse in Penang where microchips estimated at RM47 million were stolen. To counter this, Rafidah has suggested that companies make security "a very important package" in their total operations. She said security should not only be in-house but should be undertaken along the whole value chain. Companies also need to work closely with the police as they offer services in terms of security, she said.

Rafidah also said the "human resource manager must also make sure and check the background of the company's potential workers before hiring them." "I wonder whether the human resource manager actually do a proper vetting of their drivers, storekeepers or people who are left to man their products worth billion of ringgit," she added. Rafidah also said that managers or security officers should consider installing alarm system and monitoring system at home so that they can monitor the real situation in their factories.” If you value your product, you must make sure that every service provider along the value chain are secured. With extra precaution, this kind of issues would not arise," the minister said.” Let (us) be high-tech about security in tandem with high-technology level of our industries," she added.
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February 13, 2007 16:09 PM
American Electronics Firms Keep Faith In Malaysia

KUALA LUMPUR, Feb 13 (Bernama) -- With their faith firmly entrenched in Malaysia's investment climate, many American electrical and electronic companies plan to continue investing in this country for a good mix of factors including modern infrastructure, good international air, sea and cyber linkages coupled with its excellent external trade linkages with most countries and relatively low operating costs.

Other pull factors were the English speaking workforce, highly skilled labour, lower indirect labour costs, the Malaysian Industrial Development Authority (Mida), said when releasing its 2006 report on the performance of the manufacturing and services sectors here today. Mida also said that the Malaysian workforce has higher operational competencies to enable companies to increase their production quickly and make adjustments in responding to market demands. The agency, which comes under the Ministry of International Trade and Industry (MITI), said these conclusions were borne out of a survey carried out by the Malaysian American Electronics Industry in 2006 which indicated that "many of their member companies plan to continue investing in the country in the coming years.”
Against such a backdrop and growth over the last three decades, Mida said that Malaysia has developed into a major global manufacturing base for the electronics industry. The electrical and electronics industry continued to attract large investments last year, amounting to RM10 billion. Out of the 170 projects approved, 111 projects (RM8 billion) were for expansion or diversification activities, it said. Investments approved were mainly in electronics components (RM7.6 billion) and industrial electronics (RM1.4 billion). More Malaysian American Electronics Industry companies have chosen to shift their design and development operations to Malaysia, because of the incentives offered and the ability to move their operations up the value chain, Mida said. The Research and Development expenditure by member companies of the association is estimated at RM1.2 billion for last year.
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Malaysia Factory Investment Approvals Climb to Record

Updated : 13-02-2007 Media : Bloomberg; Story By : Stephanie Phang

Feb. 13 (Bloomberg) -- Malaysia's approved manufacturing investment climbed to a record last year, as rising energy prices spurred investment in oil, gas and biodiesel projects, and electronics makers such as Motorala Inc. and Fuji Electrics Malaysia planned expansions. Approved investments jumped to 46 billion ringgit ($13 billion) in 2006 from 31 billion ringgit in the previous year, the Malaysian Industrial Development Authority said in a report in Kuala Lumpur today. More than 40 percent of the projects approved were from foreign companies. ``These numbers will translate into higher private investment growth,'' said Lee Heng Guie, chief economist at CIMB Investment Bank Bhd. in Kuala Lumpur. High energy prices are boosting investment in Malaysia, Southeast Asia's second-largest oil and gas producer and the world's biggest palm oil exporter. Rising investment may help bolster economic growth amid slowing overseas demand for made-in-Malaysia electronics. The bulk of approvals for investment projects last year were for petroleum products including petrochemicals, according to today's report.

This was largely due to the approval of a new 7.7 billion ringgit oil refinery being constructed by SKS Development Sdn. Foreign companies accounted for 20.2 billion ringgit, or 43.9 percent, of the approved investments in manufacturing last year, from 17.9 billion ringgit in 2005. Domestic investments approved rose to 25.8 billion ringgit last year from 13.1 billion ringgit in 2005. Japan was the largest source of foreign investment last year, accounting for 4.4 billion ringgit, the highest level since 1996. The second-biggest investor was the Netherlands, with approvals worth 3.3 billion ringgit, followed by Australia with 2.6 billion ringgit and the U.S. with 2.5 billion ringgit. Approved investment in services, which includes real estate, transport and tourism, was 33.1 billion ringgit in the first three quarters of 2006, compared with 54.2 billion ringgit for all of the previous year.

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Malaysia Says 58 Issues Outstanding in U.S. Trade Negotiations

Updated : 13-02-2007 Media : Bloomberg;Story By : Stephanie Phang

Feb. 13 (Bloomberg) -- Malaysia's government, in talks to bolster $49 billion of two-way trade with the U.S., said there were 58 issues still outstanding in the negotiations. Talks between the Southeast Asian nation and the U.S. were continuing at an informal level and the two nations were not at the stage of calling off negotiations, Malaysia's trade minister Rafidah Aziz told reporters in Kuala Lumpur today. Failure to reach agreement would make Malaysia the second country with which free-trade talks with the U.S. have faltered. Talks with Thailand stalled amid protests by groups, including HIV-AIDS patients, who said the cost of medication may go up under a free-trade agreement with the U.S. The U.S., which hasn't signed a free-trade agreement with a Southeast Asian country since a 2003 accord with Singapore, is also seeking to conclude talks with South Korea this year.

The U.S., which started talks with Malaysia in June, sought to concludetalks by the end of March in order to push an agreement through the U.S.Congress before President George W. Bush's so-called trade promotionauthority expires in July. Malaysia's total trade with the U.S. grew 6.1 percent to 170.8 billion ringgit ($49 billion) in 2006 from 160.95 billion ringgit in 2005, the Ministry of International Trade and Industry said in a Feb. 9 report. Trade with the U.S. accounted for 16 percent of Malaysia's global trade, the report said. Deputy U.S. Trade Representative Karan K. Bhatia said on Jan. 31 that issues such as how the Malaysian government awards contracts remained unresolved. Malaysia's government on Feb. 2. said it was ready to shelve the talks after U.S. House Foreign Affairs Committee Chairman Tom Lantos demanded a Malaysian company scrap a contract to develop gas fields in Iran.

February 13, 2007 13:54 PM
No Deadlock In M'sia-US FTA Talks, Says Rafidah

KUALA LUMPUR, Feb 13 (Bernama) -- There is no deadlock in the negotiations for a free trade agreement (FTA) between Malaysia and the United States despite talks ending without an agreement after the fifth round in Sabah last week. Minister of International Trade and Industry Datuk Seri Rafidah Aziz, said "it is an ongoing process (and) both parties have to come to a resolution for the outstanding issues."She, however, did not disclose the outstanding issues. The U.S. has been keen to conclude talks by March ahead of the expiry of President George Bush's Trade Promotion Authority in July this year. Rafidah told a press conference here today that she would be briefing the cabinet tomorrow to get some resolution for these outstanding issues. The minister said that about 58 issues have been discussed throughout the previous round of discussions.
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February 13, 2007 19:27 PM

"Wedding Woes" For FTA Talks

KUALA LUMPUR, Feb 13 (Bernama) -- A randy groom eager to marry fast, the bride-in-waiting wanting to wait a little longer, the couple undecided where to live, difficulty in determining the dowry and a future mother-in-law not ready for the wedding were all the ingredients Datuk Seri Rafidah Aziz used to describe the obstacles Malaysia and the United States face in hammering out a free trade pact. Likening FTA negotiations to the difficulties associated with planning a Malay wedding, the International Trade and Industry Minister said negotiations would go on until both sides agree to conclude a pact or call it off altogether.

Rafidah's analogy in describing the talks as such came about after she was clearly exasperated when reporters suggested that the talks were "deadlocked" after the fifth round last week during a press conference, here Tuesday. The US was keen to conclude talks by March ahead of the expiry of President George Bush's Trade Promotion Authority in July this year but with issues yet to be sorted out. Despite this, Rafidah said "the wedding is on" but faced "issues" which needed to be resolved. But her exasperation was tinged with doses of humour as she went about elaborately describing the understanding needed between the groom and bride -- as was needed between Kuala Lumpur and Washington -- in agreeing on things ranging from fixing the date, where to marry, where to live and the quantum of the dowry.

For instance, Rafidah said the boy might opt for a June wedding but the girl insisting it was too early might favour August. "But the randy boy would say, I can't wait that long," she said to peals of laughter from the audience comprising more than 100 officials from the private sector, government and the media. Rafidah said that finally, the couple might compromise and settle for a July wedding. But that's not the end of the story, she said. Even after agreeing to a date suitable to both of them, "alas!, the bride's mother might not be ready. Then, there's the quantum of dowry to be decided and agreed upon, she said. "The guy says RM5,000 enough lah, but then the girl says "malulah" (its embarrassing).

Your classmate paid RM10,000, you know. It's not that I need the money, it's for show, for the public," said Rafidah. Rafidah said the bride might respond by saying, "But I need to borrow money from the cooperative" to which the groom might say, "borrowlah, nevermind, after the honeymoon we start paying back." The guy might then retort "RM10,000 is too much, how about RM8,000" and the girl might reply, "okay lah, RM8,000 is okay."

The minister said that "once we have gone through all the issues and continue the negotiations... until we come to a day that we say Alamak! (Oh my gosh!) sorry, so much hassle, better call off the wedding and remain good friends." Rafidah revealed there were 58 issues discussed throughout the previous round of discussions. Some of the difficult areas were government procurement, labour, intellectual property rights, etc. She said the best negotiations usually were not held under the stress of formality but in an "environment where parties were ready to understand the sensitivities." When asked whether the negotiations could be concluded by this year, Rafidah said: "It depends on the status of talks, whether they are formal or informal, whether we meet the deadline and how fast we resolve it."
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January 31, 2007 20:45 PM

US Optimistic Of Concluding FTA Talks By End-March
KUALA LUMPUR, Jan 31 (Bernama) -- The US is optimistic the current free trade agreement (FTA) talks with Malaysia will be concluded by end-March following positive progress of the negotiations. US Deputy Trade Representative, Karan Bhatia, said the negotiations had made good progress in many areas. "Of the 23 chapters in the FTA, a number of them were near conclusion except for two particularly sensitive areas -- procurement and services," he told reporters, here Wednesday. Bhatia is here on a three-day visit from Monday ahead of the fifth round of Malaysia-US FTA negotiations in Kota Kinabalu next Monday. His visit was a follow-up to the meeting between US Trade Representative Susan Schwab and Minister of International Trade and Industry Datuk Seri Rafidah Aziz in Davos, Switzerland last week. "My message here this week is to urge the Malaysian government and negotiators and our own negotiators to do everything we can to break the differences," he said. Bhatia remained optimistic the talks could be concluded when the fifth round of negotiations starts next week.” There is a window of opportunity, by which we could try to make it happened.

The fifth round is the key to this we need to close the chapters of the FTA," he said. Bhatiar said s
ervices, important for both Malaysia and the US, must be open and there must be competition. He said there were worries the US demand in the areas of government tenders and procurements could hurt Malaysia's social policies, especially in regard to Bumiputra rights.” The US has no intention of undermining Malaysia's preferential policies but will call for greater transparency in the two areas," he said. Bahtia said Malaysia would be able to compete on a level playing field with a guaranteed right to compete with US firms in the US market. "Through the FTA, the US will also open the US government procurement market, worth roughly US$300 billion (US$1=RM3.47) a year to Malaysian firms," he said.
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January 31, 2007 18:27 PM US-M'sia FTA To Benefit SMEs

KUALA LUMPUR, Jan 31 (Bernama) -- Small and medium enterprises (SMEs), especially those in the textile, garment and shoe industries, could gain greater market access with the US-Malaysia Free Trade Agreement (FTA), Federation of Malaysian Manufacturers (FMM) president, Datuk Yong Poh Kon, said. Yong said Malaysia should be more liberal towards opening up its market for US as it would benefit trade and investment flows for both countries. US Deputy Trade Representative, Karan Bhatia, said Malaysia should seize the opportunity and conclude FTA talks with US by March because of the uncertainty over the renewal of the current administration's trade promotion authority by the US congress.” Malaysian exporters will benefit from lower US tariffs while importers will be able to enjoy more competitive pricing," Yong said at a media briefing after the seminar on "Expanding Malaysia-US Trade Relations with FTA: Benefits to SMEs".

At the seminar, two Malaysian companies, Smart Reader and Baba Food Products expressed their intentions to expand into US.Personal advisor to chief executive officer of Smart Reader, S. Selvanathan, said US was a lucrative market and the company would expand to New York to start a franchise for its educational programme.Smart Reader, a provider of educational programmes, has already expanded its wings in China, Philippines, Thailand and Syria. Meanwhile, Baba said it was gearing up to penetrate overseas market. International business consultant, Patricia Irvine, said Baba has not been aggressive in the overseas market before.” However, the trend is changing. We are stepping up our production to meet the overseas market. US is a huge market we are eyeing now," she said.