U.S. trade relations Archives

Two newly arrived Malaysian diplomats in New York underscore the importance of forging closer ties with the US, and underscore the importance of trade in promoting bilateral ties.

Amir Farid Abu Hasan, the new Malaysian consul general in New York, who was transferred from the Malaysian High Commission in Dhaka, Bangladesh, says that trade and business would lead to greater cooperation between the two countries.

Amir, who says that “New York is a different terrain altogether”, sees the crucial role the business-oriented Malaysian diaspora in the US can play in fostering closer bilateral ties. .

“We work closely with the Malaysian diaspora … there are about 21,000 Malaysians residing in the 17 state jurisdiction served by our consulate general and about 45,000 in the United States. The diaspora performs an important role in promoting Malaysia’s interests through people-to-people contacts, business and professional relations, etc. Since many Malaysians in the U.S. are engaged in business and trade, they help forge close business and trade relations with the US which is an important trading partner for us,” the envoy said in an interview with Global Trade Magazine.

The diaspora’s significance was also evident during the visit of the then Malaysian Prime Minister Ismail Sabri bin Yaakob to New York in Septemer, when a dinner was hosted for the large diaspora in the U.S. with many guests coming from across the United States.

Besides providing consular services to Malaysian nationals in the country, the consulate general promotes Malaysia’s economic interests, and coordinates with the offices of dedicated agencies in New York like the Malaysian External Trade Corp. (MATRADE) and the Malaysian Investment Development Authority (MIDA). “We cooperate with each other in various ways, including at the federal, state and city council levels,” the consul general said.

The U.S. which has, traditionally, been one of the top three trading partners of Malaysia, is viewed as a key market for the export-oriented economies of Malaysia and other Southeast Asian countries. “With uncertainties characterizing the Chinese market, which has been very lucrative for most Southeast Asian countries, the current thinking is not to put all your eggs in the China basket … the mantra is diversification,” explains Thomas Lee, a Chinese-Malaysian businessman who participates in US trade fairs for his company based in Sabah in the Borneo region.

Indeed, at the networking luncheon he hosted for his counterparts from other Asian countries on Dec. 6 at Malaysia’s permanent UN mission in New York, Amir reinforced Malaysia’s “keen interest” to intensify trading and business ties with the United States. Edward Mermelstein, the commissioner in the New York Mayor’s Office for International Affairs, and his deputy Dilip Chauhan, were among the invited guests.

Amir’s resolve to improve US-Malaysian bilateral trade and economic ties is also shared by the newly appointed Malaysian trade commissioner, Nyaee Ayup, at the MATRADE office in New York.

The new trade commissioner worked at MATRADE’s head office in Kuala Lumpur before she was assigned to New York. Prior to that, she had served as Malaysia’s trade commissioner in the Philippines from 2014-2018. Nyaee has intimate knowledge of major industries that drive Malaysia’s exports, including electrical and electronics, information technology, green technology, etc.

A product of the National University of Malaysia, where she studied statistics, Nyaee has come at a time when the U.S. economy is facing a slowdown accompanied by high inflation, prompting many economists and pundits to believe that America may be headed towards a recession.

Nyaee acknowledged in an interview in her office that the US slowdown could pose a challenge “as it may possibly affect our overall exports to the US which is our third largest trading partner”.

But, as she put it, “you can also find opportunity in a critical situation”. Malaysia’s forte lies in having a strong base in such crucial industries as the electrical and electronic industry. The semiconductors product category is an area where Malaysia can use its existing presence in the US to further strengthen its market position, particularly since many American companies are seeking to diversify their supply chains. “This could open up new opportunities for Malaysia in the US market.”

Another industry in which Malaysia can flex its muscles is healthcare, with international buyers from around the world, including the US, showing interest in Malaysia’s medical devices, as is evident at the annual MEDICA trade fair, the world’s leading event for medical devices held in Dusseldorf, Germany, which attracts large Malaysian exhibitor contingents.

The Covid pandemic has led to an unprecedented demand not only for PPE products but also for scientific and medical devices. “The Covid has also aroused interest in many parts of the world, including the US, for medical devices produced In Malaysia,” Nyaee said, adding that the healthcare sector is inherent with strong business potential for healthcare products.

Nyaee said that trade fairs and exhibitions provided an excellent platform to showcase products; Malaysian companies, she said, were already participating in a number of industry-related trade fairs.

According to trade figures provided by MATRADE, Malaysia’s 2021 exports to the US amounted to US$ 34.31 billion, up from US$ 26.03 billion in 2020; imports from the US in 2021 amounted to $ 18.02 billion up from $ 16.60 billion in 2020. Malaysia’s exports during the first ten months (Jan-Oct) of 2022 amounted to $ 31.39 billion, up from $ 27.79 billion during the year earlier period, while imports in the Jan.-Oct. 2022 period amounted to $ 19.37 billion over $ 14.81 billion in the previous year’s corresponding period.

Malaysia’s major exports to the US consist of electrical and electronic products, rubber products, optical and scientific equipment, wood products, etc., while imports from the US consist of electrical and electronic products, chemicals and chemical products, machinery equipment and parts, optical and scientific equipment, etc.

Author’s Bio

Manik Mehta, a New York based journalist, writes extensively on foreign affairs/diplomacy, United Nations, U.S. bilateral relations, global markets, business/trade, shipping/logistics, etc.

On December 10, Speaker Nancy Pelosi, the Trump administration, along with leaders in Mexico and Canada, announced a compromise to the new North American trade deal, known as the U.S. Mexico and Canada Agreement. Eleventh-hour concessions by the Administration and Mexico are likely to result in a win for labor, President Trump, and ultimately market stability.

The final deal gives Democrats in Congress a few big wins in the pharmaceutical and labor industries, as well as environmental standards, and gives President Trump the victory of having his new trade deal on the path to ratification by all countries involved. Canada managed to receive much of what they requested, despite the slight opening of the Canadian dairy market to U.S. producers.

One of the biggest changes from the original draft USMCA in the compromise trade agreement is the negotiated labor monitoring and penalties for noncompliance. While the original draft required Mexico to change its laws to make it easier for workers to unionize, the compromise created an interagency committee that will monitor Mexico’s labor reform, established benchmarks and penalties for Mexico’s labor reform process, and established labor attachés in Mexico for on-the-ground reporting about Mexico’s labor practices.

Below is an outline of the changes to the USMCA – the House is expected to vote on the deal next week, though the Senate will likely not address the bill until the impeachment process has concluded:

For workers, language was removed that made it difficult to prove that trading partners are not protecting workers from violence in their respective countries. Now, Mexico has agreed to a “rapid-response labor mechanism” (see ANNEX 31-A) that allows independent, multinational three-person panels to investigate Mexican factories. Mexico, too, can have a panel investigate factories in the U.S. If a violation of union rights is found, a complaint can be filed, and the country making the accusation can determine the period of time that the accused county can have to address the concern. Provisions against Forced Labor also remain strong in the agreement. The deal is expected to also create 176,000 new jobs in the U.S. (See Article 23.3-23.4, ‘Labor Rights.)

For the environment, Democrats have promised that the deal has an added commitment that all the countries will have seven multilateral environment agreements (MEAs), alongside language that will allow the list to grow over time. Provisions include prioritization and monitoring of MEA commitments, and maintain and strengthen the protection of endangered species, the Montreal Protocol, prevention of pollution from ships, regulation of whaling, protection of the Ozone Layer and more (Article 1.3 Amendment and Article 24.9 Amendment)

For the pharmaceutical industry, the deal’s former provision that gave biologics a 10-year exclusivity period on the market is now entirely taken out. Democrats argued against the exclusivity period, concerned it could increase the cost of drugs, and succeeded in eliminating language that allows patent evergreening – when brand-name drug manufactures extend patents an additional to maintain power in the market when a new or related drug is created. (See the deletion of Article 20.49 ‘Biologics’)

For the internet, a Democratic concession led to maintained protections in the USMCA for technology companies, giving legal immunity for content posted by their users, as well as legal protections when these companies seek to moderate platforms. These provisions remain the same from Section 230 of the Communications Decency Act of the USMCA.

For the steel industry, while the deal already exempted the Canada and Mexico from steel and aluminum tariffs, the revised agreement has strict rules of origin in the automotive industry. The deal states that seven years after entry into the USMCA, all steel manufacturing must occur in one or more of the countries involved, except for the refinement of steel additives. Ten years after the agreement, the countries will consider appropriate requirements in the interest of all parties for aluminum to also be considered. (See Chapter 4, ‘Rules of Origin’)

For Canada and dairy, the U.S. will be able to export 3.6% of Canada’s dairy market, currently at 1%. Dairy companies in the U.S. can sell their products into Mexico duty-free, with access to common-named cheeses, while Canada is opening its market with more duty-free quotas for U.S. dairy products. The deal eliminates Canada’s 6/7 milk pricing system, and holds Canadian export of dairy to the standards of international trade rules.

And for the auto industry, in order to avoid tariffs, a car or truck must have 75% of its components made in the U.S., Mexico or Canada, up from 62.5% today. Also, workers making the cars or trucks, at least 30% of the work, must be earning at least $16 an hour. By 2023, that number is 40% of the work done on cars.

With the United States positioning itself to negotiate several more trade deals, labor hopes that these last-minute changes set a benchmark for labor standards and enforcement moving forward and, likewise, the President hopes it demonstrates he can close a major trade deal.

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Note: Ryan Bernstein, formerly chief of staff to Senator John Hoeven (R-ND) is a senior vice president with McGuireWoods Consulting federal public affairs group.Mariam Eatedali is a research associate at McGuireWoods Consulting; she previously consulted with former representatives and senators to address foreign economic and diplomatic concerns while she was a fellow for the U.S. Association of Former Members of Congress

Malaysia Sees Trade as Vehicle to Forge Closer Bilateral Ties with US

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