Tuesday, November 24, 2009

US-Malaysia Relations

Prime Minister Najib has gone to the United States for a brief visit to promote investment. In describing the situation in Europe before the First World War, German historian Leopold von Ranke talked about the importance of diplomatic maneuvers between the two countries. When Ranke wrote about the regional alliance in the late 19th century Europe, such alliance was limited to military and political alliance, not including economic cooperation.
However, Ranke's view has given us inspiration to understand that the relations to boost regional alliance can be achieved through cooperation instead of confrontation. The regional community can come together in a more open-minded attitude to enhance inter-state friendship, and accelerate economic development. Such a concept can be applied to Prime Minister Najib's visit to the United States.

Free Trade Agreement
When we talk about trade with the United States, of concern to us is that until today the Malaysian Government has not signed the pending Malaysia-US Free Trade Agreement (MUSFTA) with the United States. The coverage of MUSFTA is, in fact, very comprehensive. It includes trade in services, investment, agriculture, manufactured goods, and areas concerning intellectual property rights. On manufactured goods alone, the items our Malaysian Government has asked the US Government to reduce or exempt tax are more than 600 items, inclusive of electronic products, iron and steel and plastic products.
The scope and breadth of the fields covered in the pending MUSFTA are massive. On the subject matter relating to intellectual property rights, the issues involved are even more complicated. The United States is Malaysia's largest investment country. From Malaysia's perspective, if Malaysia and the United States can negotiate to have MUSFTA sealed, Malaysia can create more investment opportunities for the country, increase its exports to the United States and create more job opportunities for Malaysians. In trade and service sector, the signing of MUSFTA will also allow Malaysia's financial services, mail delivery, telecommunications, and other fields to attain better and more efficient service to customers.
However, over the past three years, the negotiation on MUSFTA did not obtain any progress. This led to both parties putting blame and accusing each other.

Government Procurement System
Malaysia said that the United States was using its strong power to bully the weaker Malaysia. Instead, the United States blamed the lack of transparency in Malaysia's national policies. The lack of transparency was especially noted in the area whereby the United States has asked the Malaysian Government to open up the government procurement system that the Malaysian Government has reserved mainly for the bumiputera (indigenous group, the Malays).
In fact, it was probably because the Malaysian Government has listed the protection of the special rights of the bumipuutera as "no compromise" condition that the signing of the free trade agreement between the two countries has not been able to sail through in the past three years. In fact, both Malaysia and the United States should understand that confrontation can only lead to lose-lose situation. It is only through cooperation that countries can survive and prosper. The international community is going through rapid and radical change and evolving into a new international model of coexistence that is using regional cooperation to attain peace and prosperity in the international order.

Regional Security
Moreover, as we move away from economic issue and talk about regional security, the sovereignty dispute of Nansha Islands (part of Spratly islands) in South China Sea has again surfaced after the Malaysian and the United States Navy fleet gathered in the South China Sea and held a military exercise in June this year. This joint exercise has caused considerable concern to countries surrounding Malaysia.
Territorial dispute over the group of Spratly Islands in South China Sea might move to two different directions. One direction is that if relevant countries involved in the territorial claims cannot stop worrying about the increasing disputes over the sovereign rights of the Spratly Islands, this worry can lead to suspicions among Southeast Asian countries.

Territorial Dispute
In the process, while some countries might seek to get help from outsiders such as Russia or the United States to settle the disputes, others might not want foreign power to intervene in disputes. Such development is not conducive to the unity of the region. Another possible direction that might happen to this territorial dispute of the islands in South China Sea is related to the decline in national prestige and the weakening of public power in some of the countries involved. This will result in these countries not able to use strong military means or diplomatic influence to claim their rights on these islands or make their declaration.
Malaysia led by Prime Minister Najib would want to take nonconfrontational path to face security challenges. Malaysia hopes to build a mesh of economic network by working together with other countries to the degree to bring the United States and Europe into the wider mesh of global economic network. When President Obama met with Prime Minister Najib in Singapore, both leaders had discussed counter-terrorism, human trafficking, and pirate activities. These are the issues both national leaders can discuss further when they meet or talk again in Washington.

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