For non-agricultural products (excluding oil), the average tariff on Malaysia`s MFN is 8.7% compared to 4.0% in the United States. The tariff ranges are similar. However, rates are particularly high in Malaysian sectors where the government is promoting industry growth. For transport equipment, the average tariff of 25.6% for Malaysia is more than ten times higher than the US fare of 2.5%. For non-electric machinery, a sector in which the two countries currently export to each other, the Malaysian tariff rate (6.3%) is more than four times the U.S. rate of 1.4%. Similarly, Malaysia`s rate of electrical machinery (9.2%) significantly higher than the United States (2.2%). Both nations could see economic benefits from the proposed free trade agreement, but there will be winners and losers in both countries and other countries that are not part of the bilateral agreement. Overall, bilateral trade flows would likely increase, perhaps to the detriment of some domestic and foreign producers and their workers. In 2007, the United States was Malaysia`s largest trading partner and Malaysia was the 10th largest trading partner of the United States. The United States was Malaysia`s largest export market and second largest import supplier in 2007. Appreciations on the outcome of the seventh round of discussions were mixed. A report from China reported that four key issues were discussed during the discussions: investment, trade in goods and services, intellectual property rights and „legal issues“.

20 According to Xinhua, the United States „hoped to conclude its free trade agreement with Malaysia by the summer… „21 Prior to the opening of free trade negotiations, Malaysia reportedly tried to keep financial services completely out of the negotiations, but agreed to include these services in free trade negotiations. However, Malaysia has abolished the requirements that foreign banks receive 50% of their credit from local banks, allowed them to search for any amount of ringgit (national currency) credit without authorization, fluctuated Ringgit`s exchange rate instead of being strictly linked to the dollar, and allowed foreign banks to open four additional branches in 2006.60 However, the recent financial crisis in the United States has revived concerns in Malaysia about the risks associated with greater participation in its financial sector. Soon Li Tsin, „People with HIV/AIDS anti-FTA protest,“ Malaysiakini, 11 January 2007. The eighth round of negotiations took place from July 14 to 18, 2008 in Washington, D.C. The Malaysian delegation was led by the Secretary General of the Minister of International Trade and Industry (MITI), Abdul Rahman Mamat. The chief negotiator of the U.S. government was the deputy USTR Weisel. The negotiations covered the themes of six working groups on agricultural trade, trade in services, investment, IPR, health and plant health measures (SPS) and legislation.

When the talks began, the USTR`s goal was the Malaysian Free Trade Agreement by Congress under the fast-tracked Bipartisan Trade Promotion Authority (TPA) Act of 2002 (P.L.