International Trade and Industry Minister Muhyiddin Yassin has cautioned the United States and Europe against introducing protectionist policies to defend their economies from the global slowdown.

"At times like these when things are difficult... there must not be any measures to hamper trade, whether directly or indirectly, in the form of non-tariff barriers or whatever rules and procedures," he said.

muhyiddin yasin "We are concerned that developed countries, with their internal problems and the financial crisis they are facing, (countries) like the US and Europe might just be doing that," he told reporters.

Malaysia's economy is largely export driven and the United States is its second-largest trading partner after neighbouring Singapore.

Muhyiddin said however that leaders at the recent Group of 20 powers meeting in Washington had said they would not condone protectionist policies from any country.

"It has to be as open as possible. We would like to see trade flows as usual, in fact more," he said.

Malaysia's exports rose 15.1 percent in September and 16 percent for the first nine months of the year on sustained demand for electronic goods and commodities.

Weaker demand

Muhyiddin said earlier this month that weaker demand for electrical and electronics products in the US was offset by growth from Southeast Asia and other emerging economies including China, India, Russia and Brazil.

The US is the main market for Malaysia's electrical and electronics goods, which account for about 40 percent of total exports.

The minister said trade talks between the nations were presently on hold until president-elect Barack Obama's administration comes into power in January.

Trade talks which began in March 2006 have dragged on for eight rounds, becoming bogged down in sensitive areas including Malaysia's system of affirmative action for Malays who dominate the multiracial population.

"We still want to move forward and we have been given a new mandate by the cabinet to see how things can be addressed, including some of the contentious issues," Muhyiddin said.