The United States launched free trade negotiations with Malaysia last week, seeking to build on an existing pact with Singapore and boost its economic ties in the strategically important Southeast Asian region.

"Malaysia has been at the forefront of the economic dynamism transforming Asia in recent years," US Trade Representative Rob Portman said in a statement prepared for a joint news conference with Malaysian International Trade and Industry Minister Rafidah Aziz.

"It already is our tenth largest trading partner, with $44 billion in two-way trade in 2005. Combined with a new trade opening agreement, Malaysia's rapidly growing economy will help generate meaningful export opportunities for our workers, service providers and farmers," Portman said.

An announcement that the two countries would begin free trade negotiations has been expected for weeks.

Portman pledged to work closely with both Democrats and Republicans as he negotiates the free trade pact.

The United States already has a free trade pact in the region with Singapore and has been struggling to finish negotiations on a pact with Thailand launched two years ago.

Removing trade and investment barriers between the United States and Malaysia "will improve market access, enhance competitiveness and increase prosperity for both countries," Portman said.

The US business community is very interested in a free trade agreement with Malaysia, said Cal Cohen, president of the Emergency Committee for American Trade.

"Many US companies have facilities in Malaysia right now, are major exporters to Malaysia and see tremendous potential for export growth" under a free trade pact, Cohen said.

US law requires the Bush administration to give Congress 90 days' notice before formally beginning trade talks.

The new negotiations come at time when members of the World Trade Organization are struggling to finish a new world trade deal by the end of this year.

That has increased interest in Congress for the United States to negotiate new bilateral trade deals before White House negotiating authority expires.

Washington and Seoul recently announced they would begin free trade negotiations in May. The US-Malaysia talks are expected to formally start in June.

The White House would need to finish both negotiations quickly to get them through Congress before its negotiating authority expires in mid-2007.

Cohen said he hopeful was the United States and Malaysia could reach a deal before the end of 2006.

"It's certainly a possibility ... It remains to be seen how much can be accomplished how quickly," Cohen said. (Reuters)