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Last Updated: Monday, 29 November, 2004, 14:52 GMT
China in landmark Asean pact
Prime Ministers Lee Hsien Loong of Singapore and Thaksin Shinawatra of Thailand, Nov 29, 2004.
The agreement aims to gather 1.8bn people in one trade zone
A landmark trade agreement between 10 South East Asian countries and China has been signed at a summit in Laos.

The deal could eventually unite a quarter of the world's population in a free trade zone.

Participants at the Association of South East Nations (Asean) summit have also announced plans to hold another regular East Asian summit.

The new summit, like the trade agreement, would aim to strengthen economic ties in the region.

The Asean-China trade accord unites China and South East Asian countries in a single market worth $2trillion.

But the BBC's correspondent at the summit, Kylie Morris, says analysts were warning that the agreement was more hopeful than substantial.

Asean member countries

It commits countries to lower tariffs on goods they trade by 2010, but it excludes thousands of "sensitive goods", such as sugar, iron, steel and cars, which governments are unwilling to include in the agreement, our correspondent says.

At this stage, the deal also does not include services, nor does it tackle non-tariff barriers - impediments to trade which are normally harder to break down.

And it only encompasses South East Asia's six biggest economies. Four poorer members - Laos, Vietnam, Cambodia and Burma - have until 2015 to comply.

Wider ambitions

But Asean leaders who have signed up to the deal with China are optimistic, our correspondent says.

They see long term benefits for the region, which is already providing significant resources and capital to fuel China's economic growth.

Our correspondent says the agreement is also welcome for Beijing, as it boosts China's presence in a region that traditionally has been dominated by the United States.

Ambitions for greater regional economic power are also behind plans for an East Asian Summit (EAS), which would group the 10 Asean countries with China, Japan and South Korea on a biennial basis.

The forum had been championed by Kuala Lumpur as a means of creating a trade bloc to rival the EU and the US.

Asean Secretary-General Ong Keng Yong said the EAS' format and structure had yet to be agreed.

Its first meeting is set to take place in Malaysia next year.

The Asean summit maintained its traditions of not interfering in the internal affairs of its members.

There was no mention in the formal sessions of Burma's slow progress on democracy, despite news on Monday that the detention of opposition leader Aung San Suu Kyi has been extended.

Thailand's Prime Minister Thaksin Shinawatra also escaped any questioning over recent violence in his country's Muslim-majority south.

Shadows over Asean summit
29 Nov 04 |  Asia-Pacific
Asean speeds up free trade move
29 Nov 04 |  Asia-Pacific
US warns of bomb threats in Laos
22 Oct 04 |  Asia-Pacific
Asean: Changing, but only slowly
08 Oct 03 |  Asia-Pacific
Country profile: Laos
01 Sep 04 |  Country profiles

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