Speech One: General Remarks

It's great to be back in Penang and to see so many members of the Northern Region of the AMCHAM. And it's even better to be here today because I get to present Intel with a special citation from the Department of State, but more about that in a moment.

It has been a few months since I last spoke to this group and I am very pleased to say that the U.S.-Malaysian relationship is better than ever. Despite record oil prices and the possibility of a global economic downturn, our bilateral trade continues to grow. At the end of 2005, our two nations appeared on track to conducting over $43 billion worth of business. Our projections suggest that the U.S. will remain Malaysia's largest trading partner and that Malaysia will remain our 10th largest partner. But I probably don't need to tell you a lot about this because the companies in Penang are the major driver of U.S. trade with Malaysia.

Diplomatically, we are also on the upswing. We've had more high profile visits to Malaysia during the past year than in any period in recent memory: Deputy Secretary of State Zoellick, Under Secretary Karen Hughes, Attorney General Gonzalez, and Deputy Assistant Secretary Chris Hill, just to name a few. On February 23, we will be welcoming Treasury Under Secretary Tim Adams to Kuala Lumpur. AmCham will be hosting a luncheon for him in KL and of course you are all invited.

We have also had a variety of working level meetings on various political, security, and economic issues. There will be five more U.S. naval visits to Malaysia over the next few months. I'm reciting all these visits to illustrate the point that U.S. government officials are once again traveling to Malaysia. This country is clearly on Washington's radar screen, as it should be, once again.

The most exciting new government initiative on the horizon is the possibility of the U.S. and Malaysia entering into negotiations on a Free Trade Agreement. I am sure that you are all aware that Minister of International Trade Rafidah has announced Malaysia's readiness to launch negotiations. On the U.S. side, the U.S. Trade Representative's Office, Treasury, State, and other departments in Washington are actively studying the question. I see clear benefits to the U.S. from a FTA with Malaysia and I know that your industry representatives in Washington are making their voices heard. I don't want to predict the outcome of the process, but I believe the fact that we are considering this important step is yet another sign of greater bilateral confidence in our relationship.

Should USTR recommend to Congress that we begin negotiations, our Trade Promotion Authority legislation -- which is the law under which we must operate -- dictates a number of steps and constraints. We have been meeting with various ministries in Malaysia to explain the requirements under which we, in the USA, must operate and to make sure that they are fully aware of the scope of the obligations entailed in a FTA with the U.S. An FTA with the U.S. would be more comprehensive and far ranging than any trade agreement that Malaysia has signed so far. Everything is on the table when we sit down to negotiate an FTA.

It would also have to be a very fast paced negotiation due to the time constraints placed on us by the Trade Promotion Authority. Once the Administration has communicated its intention to launch negotiations, there would be a mandatory 90- day consultation period with the U.S. Congress before we could begin formal discussions with Malaysia. Once negotiations are complete and we have initialed a text, Congress must have at least 90 days to review and approve it. Since the Trade Promotion Authority expires on June 30, 2007, that leaves us less than a year to conclude an agreement. This would be a very ambitious schedule and out two governments must determine whether we would have the time we need. Let me conclude this by repeating -- especially for the reporters -- that no final decision has been reached. I hope we will have a decision -- one way or the other -- soon.

While these broader deliberations continue, we continue to pursue many key individual goals. We continue to push for more liberalization in the financial services sector: depegging the ringgit and moving to a float based on a basket of currencies was a good start but we would like to see more. While we welcome Bank Negara's recent announcement to allow foreign banks to set up four new branches, some of the restrictions they added have undercut the value of this step. The "fine print" of the Bank's new policy dictates that no new branches may be within 5 kilometers of domestic banking institutions. This severely limits the scope for new development and does not allow businesses to make decisions based on what makes sense for their company.

Protecting intellectual property rights also continues to be at the top of our agenda. A few months back, representatives of the entertainment industry were quoted in the press as saying that they had forensic evidence that licensed - I repeat - licensed optical disc lines had been producing pirated copies of CD's. To the best of our knowledge, the authorities have yet to take action in this case. Effective enforcement requires expeditious action, but too often that has not been the case when it comes to IPR.

I do think that we are seeing a new determination on the part of the Malaysian government to protect intellectual property. We've been encouraged by statements that the government may establish a special IPR court this year. We've also been discussing with the appropriate authorities the idea of holding an IPR roundtable that would bring together representatives from the Malaysian and U.S. governments, and from private industry to discuss how we can work together to strengthen enforcement. We hope to be able to hold the roundtable in the next couple of months.

Transparency also is an important issue for us. As business people, you know the importance of predictability in regulatory and other government decision-making. You can't plan your next move if you don't know the rules of the game. I appreciate that this is a sensitive issue in Malaysia, but it is an issue that must be addressed to retain investor confidence and improve domestic economic efficiency.

I think that I have spoken for long enough for an introduction. I would like to hear what is on your minds and I am happy to take any questions that you might have.

Speech Two: Intel's Award for Corporate Excellence 2005

U.S. government initiatives are not the only components of America's foreign relationships. Companies, such as yours, contribute just as much or more to our goodwill and understanding in your daily conduct of business in Malaysia. In 1999, the Department of State established the Secretary's Awards for Corporate Excellence to recognize the important role U.S. businesses play in advancing best practices, good corporate governance, and democratic values overseas. The Department of State is committed to working with American business to further these exemplary practices worldwide and to highlight the contributions that business makes to improve lives at home and abroad.

I am here today to recognize Intel's achievements, but all of your companies do many of the same activities every day just in carrying out your daily business. All of you embody American values of hard work, innovation, investment in people, charitable giving, and service to the community. By interacting with U.S. business, average Malaysians learn more about the U.S. and American values than can be found in government meetings.

Intel Malaysia's nomination was one of 60 for the Secretary of State's Award for Corporate Excellence -- the highest number of nominations ever. It competed with companies located in every region of the world, was one of the ten finalists and was specially recognized for its corporate citizenship, innovation and exemplary business practices in Malaysia.

Intel Malaysia's original investment in Malaysia was $2 million and a staff of 100. 33 years later, it has more than $2.6 billion invested in Malaysia and a work force of 8500 on three campuses. It is Intel Corporation's largest offshore facility and most advanced assembly and test site, building, developing and designing Intel's flagship products. It has won numerous awards for quality, safety and environmental awareness.

Intel Malaysia exemplifies the characteristics of a good corporate citizen in its relationships with its employees and customers, and its concern for the local community and environment. Allow me to give some specific examples.

Intel Malaysia sets clear standards for ethical business practice and integrity by requiring its employees "to conduct business with uncompromising integrity and professionalism." American firms are held to higher ethical practices than those of many other nations and it is critical that Intel and other U.S. companies demonstrate these practices to the rest of Malaysia. In this way, you show that it is up to business, as well as government, to stamp out bribery and kickbacks.

Intel modeled American charitable behavior when more than 200 employees volunteered for clean up and relief activities in Penang and Kedah after the tsunami. Intel Malaysia employees donated over $43,000. This mirrors the best of America's private charity efforts. U.S. companies donated a total of $560 million in relief aid to nations devastated by the tsunami. We hope that Malaysians and people all over the world are aware that Americans care and give of their time and savings to help alleviate such suffering. I thank Intel and all American companies in Malaysia who donated to the tsunami relief.

Most critically, Intel invests in Malaysia's future through science, engineering, and math education in Malaysia. The firm's International Science and Engineering Fair has been recognized as the premier competition for secondary schools. National level winners go on to the international level competition in the U.S. 27,000 teachers have been instructed in the use of technology in the classroom through Intel's Teach for the Future program. Another 2000 teachers have benefited from a program in science jointly organized with the Academy of Science Malaysia. Intel collaborates with six local universities to strengthen science and math education at the university level. All told, Intel Malaysia has invested more than $5.3 million in education development programs.

Perhaps the key contribution that Intel Malaysia and other U.S. firms make to improving relations between Malaysia and the U.S. is their daily practice of business. On any given day, if I go to the visa section in the U.S. Embassy, there are likely to be bright, young Intel scientists and engineers applying for visas to visit the U.S. on business or pleasure. By simply sending your employees on these training trips and work assignments, you expand understanding and appreciation of Malaysian values and practices among Americans. Your staff, in turn, get to see the U.S. in a whole new light. They travel to the headquarters, learn new skills and develop greater understanding of U.S. values, and, hopefully, bring what they have learned back to Malaysia to pass on to others here. Perhaps they also get to stop at Disneyland or the Grand Canyon on the way back. This, too, helps build relationships and lasting impressions and showcases American culture in a way that no government initiative can.

And so, on behalf of all of the employees of Intel Malaysia, who commit themselves to corporate excellence every day, inside and outside of the factory, I would like to ask KC Yoon, Managing Director to please come to the podium.

It is my great pleasure to present to Intel Corporation The Secretary of State's Award for Corporate Excellence Special Citation In recognition of corporate citizenship, innovation, and exemplary business practices in Malaysia.