I’m happy that the Democrats have taken over the House. They’re likely to take over the Senate too. Despite that, I don’t share with many economic policies espoused by the Democrats. While I’m unsure where do they stand on the ongoing Malaysia-US FTA negotiation, it’s probably fair to say that the Democrats would take on a protectionist stance. If that’s the case, then the US negotiation team would’ve weaker influence to wield against the Malaysian negotiation team.
On top of that, the US team’s authority is fast expiring, making the scenario for the US team more depressing; the trade promotion authority will expire in July 2007. With a Democrats-dominated Congress, it’s possible that the Congress won’t renew the power the US trade authority currently enjoys. Earlier, I’ve suggested that time is on the Malaysian side. With the current development, that suggestion has become more compelling than before.
Talking about free trade, another FTA is on the horizon. It’s with Pakistan:
KUALA LUMPUR, Malaysia (AP) – Malaysia wants Pakistan to cut import duties on motor vehicles and palm oil under a proposed free trade agreement that both sides hope to conclude by the year-end and implement from January, a report said Tuesday.
We know what we want. But what does Malaysia offer to Pakistan? According to the Daily Express:
Malaysia’s offer to Pakistan covers 114 tariff lines which include yarn, textiles and clothing while Pakistan offers 125 products such as electrical appliances, machinery, plastic products, chemical, rubber and timber products.
On the Malaysia-Pakistan FTA negotiations, Rafidah said Malaysia has requested reduction in import duties on motor vehicles.
“We have identified products of interest to us and so are they. We are now finalising whether we can offer what they requested and whether they can accept our requests. Hopefully, there will be some movements,” she said.
On services, Rafidah said, Malaysia has made the same offer to Pakistan in the Doha Round.
They are accountancy, engineering, architecture, construction, higher education, distributive trade, franchising, health, oil and energy.
Cool, but does Pakistan really want in return? The article doesn’t say. I wish the information was more readily available to the public. Alas, transparency isn’t the Malaysian government’s forte.
Regardless, in all likelihoods, Malaysia should come out on top in this FTA. Why? Well:
“For the January-August 2006 period, Malaysia has exported RM24.3 million worth of products to Pakistan, mainly petrochemical products, oleic acid and rubber.
“Unfortunately, there were no exports from Pakistan and this showed that Pakistani businessmen are not taking advantage of the EHP which took effect from January 1 this year,” she said.
Hey, we could use some of your nuclear stuff. Export us some, will ya?
According to Slate (thanks John for the lead):
As a result of this year’s election, it now seems unlikely that the new Congress will extend George W. Bush’s ”fast-track” trade-negotiating authority, which expires this summer. The results are further bad news for the Doha round and bilateral trade agreements with South Korea and other countries. It is possible that congressional Democrats will revive efforts to saddle China with punitive tariffs as punishment for ”currency manipulation.” It would be going too far to say that the 2006 election ushers in a new protectionist consensus. But free trade has definitely left the building.
Needless to say, I agree.
