US-Malaysia Bilateral Relations

Ever since Malaysia gained independence in 1967, Malaysia has continued to maintain close relationship with the United States. In the fields of trade and economic as well as in cultural and educational exchanges, the bilateral ties between the two countries have never been cut off at any one time but that over the years the relationship between Malaysia and the United States has remained intimate and close.
Harmonious Ties
In more recent years, the mutual visits between the senior government officials from Malaysia and the United States have even been more frequent than before. From 17 to 18 May, Prime Minister Najib Razak will again pay an official visit to the United States. Najib's coming visit to the United States is a trip that all Malaysians have high expectation on the result it will bring to the country. This is a trip that the two countries can expect to further strengthen the already harmonious ties. This will also be a trip that can promote bilateral economic activities.
All along, Malaysia and the United States have maintained sustainable and multiple bilateral cooperation ties in many fields. Of special note is that the economic and trade ties between the two countries have continued to grow along a stable path. Such a stable bilateral economic and trade relationship between the two can be traced as early as from the 1960's period.
During the 1960's period, the goods that the United States exported to Malaysia have included soy beans, dairy, manufacturing materials for making iron and steel, plastic, organic chemistry, generators and accessories and medical equipment. The finished US products Malaysia would want to import from the United States have included products such as electronic appliances, machineries, petroleum products, plastics, vehicles, steel and iron products as well as chemical products.
According to the 2010 Annual report of the Bank Negara Malaysia (Central Bank of Malaysia), the United States is now Malaysia's fourth largest trading partner. The total trade volume between Malaysia and the United States has accounted for 10 percent of Malaysia's total trade volume.
Malaysia's Department of Statistics has also pointed out that as of the first quarter of 2011 (that ends in March); the United States is still Malaysia's largest investor. The US investment capital to Malaysia has reached $322.6 million.
On the other hand, the information provided by the US Department of State website has stated that Malaysia is the 18th largest trading partner of the United States. The average annual two-way trade volume between the United States and Malaysia has amounted to $33.7 billion.
In 2009, the trade in services volume between Malaysia and the United States has reached $2.8 billion. In 2009, Malaysia was the United States' 21st largest export country with a US export volume to Malaysia totaling $10.4 billion. In 2009, Malaysia was the 13th largest good supplier country for the United States; the US import volume from Malaysia was $23.3 billion.
On a cumulative calculation, the United States is the largest foreign investor in Malaysia. The United States was also the largest single source of new foreign direct investment for Malaysia in 2010.
Many US enterprises have already established their bases in Malaysia. Most of these US companies are involved in the electronics, manufacturing, and oil and gas industries. Until the end of 2009, the US direct investment in the manufacturing sector in Malaysia was $15.1 billion (about M$45.3bil ringgit), with billions of dollars of additional investment in the oil and gas and financial services sector.
As for Malaysia's foreign direct investment in the United States, in 2009, it has reached $430mil (about M$1.29bil ringgit). The foreign direct investment was mainly in the wholesale area.
Free Trade Agreement Negotiation
In March 2006, Malaysia and the United States initiated a negotiation on a bilateral free trade agreement. But the original bilateral trade and investment agreement framework actually began in 2004.
Nevertheless, after Malaysia and the United States began their formal round of free trade agreement in 2006, representatives from both countries held another meeting in Penang from 12 to 16 June in 2006. On 17 July, representatives from both countries held a second round of Malaysia-US Free Trade Agreement negotiation in Washington, D.C.
To negotiate for this Malaysia-US Free Trade Agreement, Malaysia and the United States have established 19 negotiation subcommittees to deal with the different trade issues between the two countries. By December 2008, both countries have already gone through eight rounds of trade negotiation and the free trade agreement deals between the two countries were almost come to a seal. However, due to the fact that on issues relating to Malaysian Government's government tendering system and on Malaysia's national policy relating to certain competition issue, both countries could not reach a consensus. In the end the Malaysia-US Trade Negotiation Agreement could not be sealed.
Nevertheless, in October 2010 Malaysia decided to join the region to negotiate for a Trans-Pacific Partnership (TPP) free trade agreement. On 5 October 2010, US Trade Representative Ron Kirk also officially informed the Speaker of the US House of Representatives that Malaysia has officially joined in the negotiations on the TPP agreement. This TPP free trade agreement is a multilateral partnership trade agreement. It includes countries such as Australia, the United States, Chile, Peru, New Zealand, Singapore, Brunei Darussalam, Singapore, and Vietnam. The main purpose of the TPP is to provide a platform for the United States and other large economic body such as countries in the Asia-Pacific region to create a wider trade market collectively. This TPP free trade agreement when sealed, will become a high level trade agreement in the 21st century.
Besides economic and trade cooperation, the bilateral cooperation ties between Malaysia and the United States have also extended to other areas. This is especially so in the cooperation in security issues including counterterrorism, maritime domain awareness, and regional stability. The relationship between the United States and Malaysian militaries is also strong with numerous exchanges, training, joint exercises, and visits. In July 2006 when the then US Secretary of State Condoleezza Rice visited Kuala Lumpur, Malaysia and the United States have even signed a Mutual Legal Assistance Treaty (MLAT).
On people-to-people exchange, Malaysia and the United States have a long standing history. As of today, the total Malaysians who have studied in the United States is well over 100,000. During peak period, the total yearly Malaysian students registered at the US universities can be over 7,000.
Government-Sponsored Exchange Programs
In 2009, approximately 130 Malaysians have taken part in US Government-sponsored exchange programs for professional development and study. Each year, about 50 Americans travel to Malaysia under US Government auspices to share their experience as visiting academics or speakers.
In addition, over the years, more than 1,500 Malaysians have participated in the US Government's International Visitor Leadership Program (IVLP). Approximately 2,000 Malaysians have participated in the US Fulbright Program, Humphrey Program, Eisenhower Program, and Youth Exchange for Study Program.
For the above mentioned US Government sponsored programs, prominent Malaysian alumni have included federal ministers, deputy ministers, and members of parliament from both the ruling party and opposition parties. Former Prime Minister Tun Mahathir has also become an alumnus of a US Government sponsored exchange program held in 1973.