Malaysia threatens to pull out from free-trade talks with US
Feb 2 Malaysia's government threatened to halt free-trade talks with the US after House Foreign Affairs Committee Chairman Tom Lantos demanded a Malaysian company scrap a contract to develop gas fields in Iran. Free-trade agreement "negotiations cannot be held hostage to any political demand, and cannot be conducted under such threats,'' the ministry of international trade and industry said in an e-mailed statement in Kuala Lumpur. Malaysia is "ready to suspend negotiations if the situation warrants it.''
Representative Lantos, a California Democrat said om January 31 the US should suspend negotiations for a free-trade accord with Malaysia unless the country ensures that an agreement by SKS Ventures Sdn. to develop two gas fields in Iran's section of the Persian Gulf is cancelled. The spat, coming days before the two countries start a fifth round of talks on a free-trade agreement, is the latest obstacle facing US negotiators seeking to reach an accord before April to get an agreement through Congress by July.
"The writing is all on the wall,'' said Andrew Aeria, an LSE Enterprise & IdeaGlobal political analyst. "Both sides are posturing politics'' and a trade agreement probably won't be concluded this year. Lantos, who made his request in a letter to US Trade Representative Susan Schwab, said the investment may run afoul of US sanctions against Iran and benefit Iran at a time when the US is pressuring it to give up nuclear ambitions.
Iran, under US economic sanctions and at odds with the US and European Union nations over the nuclear programme, is seeking companies from Asia and elsewhere to help develop its energy industry. On January 7, SKS Ventures agreed to develop the Golshan and Ferdows fields in the Persian Gulf, and one week later added a deal to build a power plant in the Zanjan province. The US and Malaysia started trade talks last year "with the full understanding that there would be no political agenda and no interference into domestic policies,'' Malaysia's trade ministry said on Friday. Lantos's call "does not augur well for the negotiations.'' A Democratic Congress has to approve any trade agreement that the US and Malaysia may reach. While Lantos alone can't block an agreement, he may be able to rally opposition on national security grounds. Negotiations
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