IMPORT SAFETY - MALAYSIA WELCOMES DIALOGUE WITH THE U.S.

UNCLAS KUALA LUMPUR 001648

SIPDIS

SIPDIS

DEPT FOR EEB/TPP/ABT AND EAP/MTS
DEPT PASS USTR FOR B. WEISEL, D. BELL, L. O'CONNOR
USDOC FOR JENNIFER BAKER
USDA FAS FOR ITP/FSTSD, CMP/MOS/EMO, CMP/HTP, ICD

E.O. 12958: N/A
TAGS: ETRD EAGR MY
SUBJECT: IMPORT SAFETY - MALAYSIA WELCOMES DIALOGUE WITH THE U.S.

REF: A) STATE 114788 B) 2005 KUALA LUMPUR 3640


1. Summary: Malaysia is interested in expanding contacts with the
United States on import safety issues. Malaysian trade officials
have been following recent USG efforts to address import safety, and
they support increased dialogue with the U.S. to preserve and
enhance Malaysia's strong trade links with the U.S. (see action
request in paragraph 4). Malaysia's principal manufacturer's
association seeks USG assistance in organizing a seminar in early
2008 to better inform Malaysian industry on U.S. import safety
procedures. This seminar would complement a pending review of
Malaysia's food safety system (stemming from a long-standing
Malaysian government request) being arranged by Embassy's Foreign
Agricultural Service office. End summary.


2. Econoff recently raised ref A demarche with Tay Lee Looi,
Director, Office of Economic and Trade Relations in the Ministry of
International Trade and Industry (MITI). Tay told econoff that MITI
was interested in a closer dialogue with the U.S. on product safety,
noting that she already was closely following the activity of the
U.S. Interagency Working Group on Import Safety. With the U.S. as
its number one export market, Malaysia is concerned about any
policies that might have a negative impact on such trade. Tay noted
that Malaysia also is concerned that its positive reputation in the
U.S. as a source of imports not be tainted by the recent attention
paid to the problem of Chinese imports to the U.S.


3. In addition to its concerns as an exporter to the U.S., Malaysia
is likewise a large importer from China. China is Malaysia's fourth
largest trading partner, with two-way trade in 2006 valued at around
USD 28 billion. Tay told econoff that Malaysia would like to expand
collaboration with the U.S. regarding best practices to protect
consumers from defective products. Malaysia's vulnerability to
defective Chinese imports was widely publicized in October when the
Malaysian Association of Standards Users announced the results of a
survey of Chinese-made toys purchased at a variety of Malaysian
retailers. Using U.S.-made lead detection equipment, the
association detected that 16 out of 24 toys tested above acceptable
lead limits as set by the U.S.


4. Action Request: The Federation of Malaysian Manufacturers (FMM),
Malaysia's largest manufacturers' association, is organizing a
seminar on import safety issues in early 2008, and has asked Embassy
for assistance in identifying appropriate U.S. experts, both from
the government and the private sector, who may be interested in
participating. The seminar's main objective would be to educate
Malaysian companies on U.S. safety and quality requirements and
procedures for imports. Embassy supports FMM's request as a means to
expand our dialogue on these issues, and we have suggested that the
event also include discussion of Malaysia's current practices.
MITI's Tay told us her ministry would also support the event.
Embassy requests Washington's assistance, both regarding suggested
speakers as well as suggested topics to include in the event.


5. A seminar on the safety of non-food imports would complement
current Embassy efforts to improve U.S.-Malaysia cooperation on the
safety of food imports. Malaysia faces similar issues as the U.S.
regarding the safety of food imports from China. In September the
Ministry of Health's Food Safety and Quality Division (FSQD)
announced that it had placed 14 Chinese exporters on a watch-list
after their food shipments had been found to be tainted with high
levels of preservatives, pesticides and heavy metals.


6. At the request of the FSQD (see ref B),Embassy's Foreign
Agricultural Service Office is arranging a review of FSQD that
initially would involve a visit by USDA consultants to assess
Malaysia's current food safety system. The subsequent USDA analysis
would form the basis for strategies to improve Malaysia's system,
which would be implemented in a follow-up visit by U.S. food safety
experts. Embassy FAS office anticipates the review taking place in
FY 2008 pending the availability of funding.


7. Key objectives of the proposed FSQD review are to 1) increase
Malaysia's understanding of the WTO rules on sanitary and
phyto-sanitary (SPS) measures, and reduce the number of such
measures on U.S. exports to Malaysia; 2) encourage Malaysia's
adoption of internationally consistent food safety and plant and
animal health measures set by CODEX, IPPC and OIE; 3) increase
Malaysia's understanding of U.S. inspection systems and its
willingness to accept products inspected under those systems; 4)
develop a written analysis of Malaysia's current food safety
policies, procedures and regulations with recommendations to bring
them into compliance with international norms; and 5) expand U.S.
exports to Malaysia.

Keith