According to stories today in the Wall Street Journal, Reuters and others, the U.S. and Malaysia are engaged in talks over a possible free trade agreement. Those involved hope a deal could be struck by year end. Legislators are predicting the pact will fly through the approval process.

The Southeast Asia nation is the tenth largest trading partner of the U.S., the report says, with $44 billion exchanged last year.

Moreover, electrical and electronics production comprise Malaysia’s top industrial sector. In 2004, the industry exported some $63.6 billion of goods, with semiconductors ($23.5 billion), industrial ($19.7 billion) and consumer products ($5.2 billion) leading the way (all figures $US). For more on the industry click here.

Several EMS companies have major operations there, including Solectron, Plexus, Celestica, Sanmina-SCI, Jabil and Flextronics.

Should U.S. employees be worried? Probably not: Nearly 85% of Malaysia’s exports to the U.S. are already tariff-free, the story says.