Free trade to top talks among East Asian leaders

Free trade to top talks among East Asian leaders

Eileen Ng, Agence France-Presse, Phnom Penh

Southeast Asian leaders will discuss growing concerns over
North Korea's nuclear capacity and lay the groundwork to create
an ambitious East Asian free trade area at a summit Monday with
Japan, China and South Korea, diplomats say.

The annual talks will also center on new security cooperation
to curb the growing threat of terrorism following recent bloody
bombings in Indonesia's Bali island and the southern Philippines,
they say.

China, Japan and South Korea are due to hold initial talks
among themselves on North Korea's nuclear program before raising
it in Monday's summit with the 10-member Association of Southeast
Asian Nations (ASEAN).

"It (North Korea) is an important issue and the leaders would
like to make their positions clear," Japan's foreign affairs vice
minister Toshiyuki Takano told AFP.

"Economic cooperation is also very important. Terrorism will
be discussed as well as some other regional issues."

Another senior official also said ASEAN leaders would state
their stance on Pyongyang's nuclear program.

Diplomats say leaders are expected to adopt a report to be
presented by a study group formed last year to assess plans for
an East Asian summit, similar to an East Asian caucus mooted by
Malaysian Prime Minister Mahathir Mohamad a decade ago.

The proposal was shot down then by the United States amid
fears it could form a protectionist trade bloc. But ASEAN last
year endorsed a free-trade agreement with China and agreed to
explore plans to enlarge it to include Japan and South Korea.

The report involves long-term plans for an East Asian Free
Trade Area (FTA) -- a powerful alliance with a market size of
over two billion people in 13 countries, an East Asian Investment
Area and a regional financing facility.

For immediate measures, it calls for the creation of an East
Asian Business Council, trade preferential treatment for least
developed countries and a regional investment network to lure
foreign capital.

The report also lists a range of development programs,
especially in the areas of human resources and information
technology.

The proposed East Asian FTA, if realized, would engulf a move
by ASEAN and China to set up the world's largest free-trade zone
by about 2010 covering 1.7 billion people and two-way trade worth
US$1.2 trillion, officials say.

ASEAN will seal that FTA framework pact during a separate
summit Monday with China, which will lead to tariff cuts on
selected farm products by as early as 2003.

Mahathir, Asia's longest serving leader, is expected to push
for plans during the summit to set up an 'ASEAN Plus Three'
bureau to bring in China, Japan and South Korea in Kuala Lumpur,
officials say.

The 76-year-old veteran leader's offer to host an 'ASEAN Plus
Three' secretariat was rejected in July by Singapore, Thailand
and Indonesia, who fear it would undermine the existing ASEAN
secretariat in Jakarta.

An ASEAN source said Malaysia would rally support for its
proposal as a "farewell gift" to Mahathir, who is making his last
ASEAN appearance before he steps down in October 2003.

ASEAN already holds various ministerial meetings with China,
Japan and South Korea in the areas of finance, trade,
agriculture, tourism and labor.

Under an ASEAN initiative to link their international reserves
with the three countries to prevent a repetition of the 1997-98
currency crisis, 10 bilateral currency-swap agreements worth
US$26.5 billion have been signed and four more are being
negotiated.