I. Commercial Overview

Malaysia is the 14th largest U.S. trading partner.  U.S. exports
to Malaysia exceeded $6 billion in 1993.  Total two-way trade
grew 31% in 1993, to $16.6 billion.  The U.S. has been the
largest foreign investor in Malaysia for the past three years.
The cumulative value of U.S. private investment in Malaysia is
nearly $8 billion.  Sixty-five percent of that is in the oil and
gas sector, with the rest in manufacturing, especially
semiconductors and other electronic products.

The Malaysian economy grew at 8.5% in 1993 and is forecast to
grow at a similar pace in 1994.  Economic growth has averaged 7%
per annum over the last three decades.  In the process, Malaysia
has been transformed from a low income producer of commodities
like tin, rubber, and palm oil into a middle income exporter of
manufactured products.  It is now, for example, the world's third
largest producer of semiconductors and the world's largest
exporter.  Malaysian per capita income has risen to $3,234 in
1993 in terms of international exchange rates.  In terms of
purchasing power parity it is well over $7,000.

Although the population of Malaysia is only 19 million, it is a
more important market for US exports than many countries of much
larger size.  This market is, moreover, continuing to grow
rapidly in line with the on-going expansion and transformation of
the economy.  There are no significant barriers to U.S. business
in Malaysia.  Most sectors of the economy are very open to
international trade, and U.S. products have been successful in
practically all of them.  The U.S. is Malaysia's second largest
supplier.  In 1993 the U.S. supplied 16.9% of Malaysian imports.
Japan was first with 27.4%.  Singapore was third, with 15.2%.
Taiwan was fourth, with 5.4%.  Malaysia's agricultural import
market is worth US $3 billion; of that, the U.S. share is 8.4%.

Principal opportunities for U.S. manufactured exports include
electronic components, production and test equipment; oil and gas
production equipment; telecommunications equipment; aircraft and
parts; chemicals; industrial process controls; electric power
generation and distribution equipment; pollution control equipment
and other environmental products and services; scientific and
medical instruments; and construction equipment.  In the
agricultural sector, principal opportunities include soybeans,
fresh fruit, temperate hardwood lumber and frozen french fries.