Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	PARIS, FRANCE 
Tarikh/Date 	: 	07/07/94 
Tajuk/Title  	: 	THE JOINT MALAYSIA - FRANCE 
			BUSINESSMEN MEETING 


 
    I am honoured to be present here today to address  such
a  distinguished  audience  of leading French industrialists
and businessmen  together  with  members  of  the  Malaysian
delegation.   I would like to take this opportunity to thank
the CNPF (Conseil National Du  Patronat  Francais)  for  the
initiative in organising this function today.
2.    Bilateral relationship between our countries continues
to be cordial, resulting in the  strengthening  of  economic
ties.   Bilateral trade between Malaysia and France has been
expanding steadily at an average rate of about 18  per  cent
per annum over the past five years.  Total trade between our
countries  has  grown from US$680 million (RM1.7 billion) in
1989 to US$1.3 billion (RM3.4 billion) in 1993.    Currently
manufactured  goods constituted more than 70 per cent of the
exports.    Bilateral  trade  is  equally  balanced  between
imports  and exports.  It accounts for about 1.4 per cent of
Malaysia's external trade.
3.    France is the fifth largest investor in Malaysia  with
a total investment of US$1.9 billion (RM4.8 billion) for the
period 1980 - 1993.  This accounts for about  5.9 percent of
total foreign investments made in Malaysia for that period.
4.   To facilitate bilateral cooperation, the two  countries
have concluded the following framework arrangements:
   -    Air Services Agreement;
   -    Cultural and Technical Cooperation Agreement;
   -    Investment Guarantee  Agreement;  and
   -    Double Taxation Agreement.
5.   The business communities of both  countries  have  also
established  COFRAMA  (France-Malaysia  Economic Cooperation
Committee) and MAFRETA (Malaysia-France Economic  and  Trade
Association) to intensify further economic cooperation.
6.      Although  the  progress  made  in  bilateral ties is
encouraging, I am confident that  there  are  potentials  to
further  enhance our cooperation in existing and new sectors
taking into account developments in France, Malaysia and the
respective regions in which both our countries are  located.
The  purpose  of  my  visit  here with a large delegation of
leading entrepreneurs and businessmen is to meet with French
business leaders and to identify areas of  common  interests
for our cooperation.
7.   Malaysia has an expanding economy.  The average rate of
GDP  growth  over  the past six years is 8 per cent plus per
annum.  The economy continues to be strong and  is  expected
to achieve a growth rate of 8.5 per cent this year.
8.    The rapidly expanding manufacturing sector contributes
significantly  to  the  strong  growth   in   the   economy.
Industrial  output  grew  by  13  per  cent  in  1993.   The
expansion of the Malaysian economy  has  contributed  to  an
expansion  in  trade.    Total trade expanded by 16 per cent
from US$79  billion  (RM205.1  billion)  in  1992  to  US$92
billion  (RM238.6  billion) in 1993.   Malaysia is today the
19th largest trading  nation  in  the  world.    To  support
Malaysia's  expanding  economy,  much importance is given to
upgrade and expand infrastructure and support services  such
as  energy  and water supply, transport, telecommunications,
skills development, housing, etc.
9.   Malaysia welcomes foreign companies to  participate  in
the  development  of  the  country's  economy through trade,
investment  and  supply  of  services.    In  this   regard,
Malaysia's   expanding   economy   creates  significant  new
opportunities for those companies involved in these sectors.
10.   Malaysia continues  to  be  an  attractive  place  for
foreign investments.  According to the World Competitiveness
Report 1993 published by the World Economic Forum in Geneva,
Malaysia    ranks   fourth   in   terms   of   international
competitiveness among the emerging economies, that is, after
Singapore, Taiwan and Hong Kong.  Its strong points are  its
domestic    economic    strength,    financial   facilities,
international  trade   policies,   stable   government   and
management  development  and  a  government  that  is openly
pro-business.
11.   As a  major  trading  nation  with  a  well  developed
manufacturing  sector,  France  is certainly in a favourable
position to increase  its  participation  in  the  Malaysian
economy.
12.     France  is  a  leading  industrial  nation  and  has
technology in diverse industrial sectors.  Malaysia can draw
considerably upon the French experience in  such  industries
to strengthen and diversify further the Malaysian industrial
base  particularly  in  the  development of export-oriented,
high value-added and high- technology industries.   Although
France  is  the leading European investor in Malaysia, there
are opportunities to further intensify  cooperation  in  the
industrial sector.
13.            I wish to take this opportunity to express my
appreciation to the French Government for the support it has
given to its companies to invest overseas.  It has initiated
the  establishment of SOFINASIA (Societe Pour Le Financement
des  Investisements   en   ASIA),   a   foreign   investment
institution, to assist French companies with venture capital
for their investments.  In addition, it was also responsible
for  the  decision  taken  to  station  a  French investment
adviser in MIDA, Malaysian Indusrial Development  Authority,
to  assist French companies proposing to invest in Malaysia.
Both these initiatives have certainly been useful to support
Malaysia's  effort  to  increase   French   investments   in
Malaysia.
14.    Given  the priorities of Malaysia's industrialisation
drive and the technological capabilities  of  France,  areas
which  offer  opportunities  for  French  investment are:-
    -   Aeronautical  components;
    -   Chemicals;
    -   Pharmaceuticals;
    -   Machinery and equipment;
    -   Technical rubber and plastic products;
    -   Agro-based industries; and
    -   Resource-based industries.
15.    Malaysia  is also actively strengthening the base for
the provision of support service  for  the  high  technology
industries.    I would urge French companies, especially the
large multinationals, to consider relocating their  Research
and   Development  (R&D)  activities  to  Malaysia  to  take
advantage of  the  country's  rapid  economic  growth.    To
facilitate  this,  technology  parks  have  been  set  up to
provide the infrastructure for R&D activities to support the
operations of high technology industries.
16.    Malaysia  is  a  favourable  location   for   foreign
investments  as  it  is  situated  in the dynamic East Asian
Region.  This is further enhanced by the plan  to  establish
an  ASEAN Free Trade Area (AFTA).  The AFTA will be achieved
through   the   implementation   of   a   Common   Effective
Preferential  Tariff  (CEPT)  scheme  which  requires member
countries to reduce their import duty to a range of zero  to
five  per cent over a stipulated period.  Initially the AFTA
is envisaged to be realised by  the  year  2008.    However,
there  is now a shared feeling among member countries on the
need  to  accelerate  the  establishment  of  the  AFTA   by
shortening its timeframe, to 10 years, while maintaining its
commencement year of 1993.
17.    The ASEAN economy is nowhere near as large as that of
the European Union.  However, I am convinced that ASEAN  has
a  great  potential to develop into an integrated economy to
exploit the comparative advantages in the region.  ASEAN  is
among  the  fastest  growing economies in the world.  As you
know  it  is  when  economies  are  actively  growing   that
opportunities abound.
18.  Besides ASEAN, the East Asian region is also an area of
substantial  opportunities  with  its  equally rapid pace of
economic  development.    Malaysian  companies  are  already
participating  in  diverse  sectors  in the economies of the
emerging countries of the  region.    These  companies  have
accumulated  useful contacts and knowledge on the market and
they are prepared  to  create  strategic  partnerships  with
relevant   French   companies   which   have  the  necessary
technology and expertise to cooperate and undertake  jointly
new ventures in these markets.
19.     The  recent  conclusion  of  the  Uruguay  Round  of
Multilateral Trade Negotiations in Marrakesh augurs well for
the expansion in trade and investment flows.   However,  the
full  benefits  of the Uruguay Round can only be realised if
all countries can translate their political commitment  into
action   in   carrying   out   all   their  obligations  and
implementing all the  concessions  agreed  upon.    In  this
respect,  the major trading countries should demonstrate the
leadership required in taking the necessary steps to  ratify
the  Agreement  establishing  the  World  Trade Organisation
(WTO) so that the WTO can come into force on 1 January  1995
as targetted.
20.   Malaysia is ready to undertake all its commitments and
will take the necessary steps to  modify  its  policies  and
take measures to ring them into conformity with the  Uruguay
Round Agreement.  Some of the  adjustments that  have  to be
made  would  certainly  not  be  easy.   They  involve  some
sacrifices  on  market  liberalisation  measures  which  are
required to be made as agreed.  However, this is a difficult
action that every contracting party has  to  take  if  major
benefits are to be derived from an  expanding  international
trade.
21.  Malaysia is ready to ratify the WTO Agreement.  We  are
optimistic   that   the   effective  implementation  of  the
Agreement by all countries  would  provide  a  stronger  and
clearer  legal  framework  for  the conduct of international
trade and a  more  effective  dispute  settlement  mechanism
under the WTO.
22.    In  the  context  of  the  work programme of the WTO,
Malaysia is concerned over the effort made by some countries
to establish linkages between  labour  standards  or  social
clause with international trade.
23.   Developing countries, including Malaysia, are strongly
opposed to the move to link international trade with  labour
standards  as  lower  cost  of  labour  is  often  the  sole
comparative advantage that they have.    This  lower  labour
cost is not due to exploitation of the workers.  The cost of
living,  and  very  often, the rate of inflation in the more
competitive of the developing countries are very low.  Their
wages buy much more than their dollar equivalent would  seem
to indicate.  On the other hand the developed countries have
a  host  of  comparative  advantages  which include capital,
technology  management  skills,   marketing   know-how   and
extensive  networks built up over many decades.  If the sole
comparative  advantage  of  the  developing   countries   is
nullified,  they  will  get  no investment and their massive
workforce will be unemployed.  By no stretch of  imagination
can we regard this as social justice.
24.           The European Union (EU) is an important market
for  Malaysia's  exports.    Exports  to  the EU amounted to
US$6.7 billion (RM17.5 billion) in 1993.   This  represented
about  14.4  per  cent  of  Malaysia's total external trade.
With the proposed expansion of the EU  to  include  Austria,
Finland,  Norway and Sweden by 1st January 1995, the EU will
become an even more important market for Malaysia's exports.
The  enlarged  EU  will  certainly   create   new   business
opportunities.
25.  In view of the importance of the EU as a contributor to
international  trade  and  as  a market for exports from the
developing countries, it  is  important  for  France  as  an
important  component  member  to ensure that the enlarged EU
continues to be liberal in its trade policies and contribute
to the strengthening of the multilateral trading system  and
promote  the  growth  of  international trade and investment
flows.
26.   The visit of my delegation  here  today  is  aimed  at
enhancing  bilateral  ties.    With the support given by the
government of  both  countries,  I  am  confident  that  our
businessmen  will  succeed in forging new business ties that
would intensify the existing bilateral cooperation  for  our
mutual benefit.