The United States voiced confidence on Wednesday of reaching a deal with Malaysia on the thorny area of government procurement in free-trade talks.
Malaysia is barred from a potential $250 billion in US government procurement of goods and services until it further opens up its own procedures, which Kula Lumpur uses to help ethnic Malay businesses under affirmative-action policies.
"The first two days of the negotiations have gone extremely well. There are a lot of areas where we already see eye to eye," US negotiator Barbara Weisel told reporters in Kuala Lumpur.
Both sides resumed talks in Malaysia this week, with Washington hoping to reach a deal by early 2007 so it can be put to Congress before US trade promotion authority expires. Weisel said agreement on government procurement must be part of a free-trade deal with Malaysia.
The United States is Malaysia's biggest trade partner and foreign investor. Malaysia is Washington's 10th largest trading partner, with more than $44 billion in two-way trade in 2005. Since talks began in June, government procurement has emerged as a difficult area, along with Malaysia's state-controlled car industry and its ban on majority foreign ownership of banks.