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This report addresses the proposed U.S.-Malaysia free trade agreement (FTA). It provides a brief overview of the Malaysian economy, a review of U.S. interests in the proposed agreement, an examination of possible issues likely to arise during the negotiations, a comparison of tariff rates between the two countries, legislative procedures, and an appendix with a brief chronology and trade data -- including U.S. exports to Malaysia by sector and exports to Malaysia by state. The U.S. Trade Representative, on March 8, 2006, announced the Administration's intent to negotiate a free trade agreement with Malaysia. The goal of the proposed FTA is to remove tariffs and non-tariff barriers and expand trade between the two nations. Beginning in June 2006, five rounds of negotiations (alternating between the two countries) were scheduled. The negotiating goal is to complete the talks by early 2007 in order to send the proposed implementing legislation to Congress in the spring of 2007 and have Congress consider it before the Administration's Trade Promotion Authority expires on July 1, 2007. The proposed U.S.-Malaysia FTA is of interest to Congress because (1) it requires congressional approval under expedited legislative procedures; (2) it continues the trend toward greater trade liberalization and...