South Korea, Asean to Boost Investment, Lee Says (Update2)

Bloomberg
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By Heejin Koo

May 31 (Bloomberg) -- South Korea and the Association of Southeast Asian Nations will agree to boost investment and trade to speed recovery from the global economic crisis

South Korea and Asean’s 10 members will sign the accord during a two-day summit that starts tomorrow, South Korean President Lee Myung Bak said today in a speech. The countries will also pledge to elevate their yearly trade to $150 billion by 2015 from $90 billion last year.

“A global crisis needs global countermeasures,” Lee told Korean and Asean business executives on the southern South Korean island of Jeju, where the summit will be held. “A joint effort between Korea and Asean, nations full of potential, is vital.”

Lee has pushed for free-trade agreements with the U.S., the European Union and with Asean to buoy exports and avoid a recession. South Korea’s economy unexpectedly expanded 0.1 percent in the first quarter after contracting 5.1 percent the previous three months.

The won has fallen 18 percent against the dollar and 26 percent against the yen in the past 12 months.

An earlier agreement between South Korea and Asean to lower tariffs on merchandise took effect in 2007 and another on services took hold this month. South Korea exported $49 billion worth of goods to Asean nations last year and imported $41 billion.

Regional Cooperation

“Regional cooperation and integration are no longer a luxury, but a necessity,” Thai Prime Minister Abhisit Vejjajiva said in a speech following Lee at the business leaders’ gathering. “In light of the global economic and financial crisis, we need to work more closely together to ensure that our trade and investment ties will not be seriously affected.”

Asean comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

To contact the reporter on this story: Heejin Koo in Seoul at hjkoo@bloomberg.net