Malaysia has warned it will drop free trade talks with the US if it is asked to scrap a multi-billion-dollar gas deal with Iran, a news report said yesterday.
US House of Representatives' Foreign Affairs Committee Chairman Tom Lantos has urged the suspension of negotiations to forge a free trade agreement with Malaysia until it halts a US$16 billion deal to develop gas fields in southern Iran.
The US is working to sanction Iran over what it believes is a program to develop nuclear weapons.
In an angry reaction, Trade Minister Rafidah Aziz told Washington to stay out of Malaysia's affairs and warned the government will not bow to any threats, the Malay-language Utusan Malaysia reported.
"I am ready to advise the government to cancel the FTA discussions immediately because the US doesn't respect the preliminary terms of the discussion," Rafidah told the newspaper.
"Among the preliminary conditions for the FTA talks agreed between Malaysia and the US are that there be no political agenda. The agreement focuses on markets and both countries don't interfere in each other's domestic policies," she said.
Malaysia doesn't need the free trade deal, and Washington is the one pushing for it, she said.
Prime Minister Abdullah Ahmad Badawi said yesterday the US has no right to stop Malaysia from conducting business with any country.
"We are firm on our stand, don't bring any political matters into trade," he was quoted as saying by national news agency Bernama.
Rafidah and other trade officials could not be immediately reached for comment yesterday.
The 25-year project to develop two gas fields in Iran, which has the world's second-largest gas reserves, was signed last month between the state-owned National Iranian Oil Co and Malaysia's SKS Ventures.
The tension over Malaysia's gas deal with Iran comes ahead of a crucial fifth round of talks next week in Sabah State on Borneo, where negotiators will attempt to bridge differences to conclude the pact before a July 1 deadline.
Rafidah said she was confident the FTA talks would proceed.
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