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(3rd LD) S. Korea, Malaysia seek bilateral FTA, closer ties on energy, defense

All Headlines 16:16 December 10, 2010

(ATTN: UPDATES throughout with leaders' comments at press conference, details; CLARIFIES newly-signed pacts)
By Lee Chi-dong

PUTRAJAYA, Malaysia, Dec. 10 (Yonhap) -- South Korea and Malaysia agreed Friday to push for a bilateral free trade agreement (FTA) and step up cooperation on energy and defense.

The summit deal reached at a meeting between South Korean President Lee Myung-bak and Malaysian Prime Minister Najib Razak in Putrajaya came as the two sides mark the 50th anniversary of the establishment of diplomatic relations this year.

"The two leaders agreed to explore ways and means, including a possible free trade agreement, for the further enhancement of trade and economic ties between the Republic of Korea and Malaysia," a joint statement read.

In 2007, South Korea launched an FTA with the 10-member Association of Southeast Asian Nations (ASEAN), which includes Malaysia, but Seoul hopes for a higher-level separate FTA with the country, one of South Korea's major economic partners. Two-way trade is projected to exceed US$16 billion this year.

Lee said he and the Malaysian leader have set the goal of doubling the volume in the next five years.

South Korea, whose economy heavily depends on trade, has been aggressive in forging trade pacts with other nations, highlighted by the sealing of an FTA with the European Union in October. Earlier this month, Seoul and Washington completed protracted additional talks on their FTA.

South Korea and Malaysia are expected to promptly begin a joint study on the effectiveness of their FTA, although it remains unclear whether or when they will start full-fledged negotiations.

At a joint press conference with Lee after the summit, the Malaysian leader supported Seoul's proposal for a bilateral FTA.

"The ASEAN-Republic of Korea FTA already in place has given a strong impetus to relations between the two sides. If there is a separate bilateral FTA, it will enhance bilateral economic cooperation," he said.

The South Korean president held out expectations that South Korea and Malaysia can team up to tap into foreign markets.

"What is important among today's agreements is that the two nations have decided to work together to make inroads into third nations, taking advantage of their respective strengths," Lee said.

In their talks held at the prime minister's office in Putrajaya, an administrative city just south of Kuala Lumpur, Lee and Najib also agreed to further enhance defense cooperation between their countries, according to the joint statement. South Korea views Malaysia, along with Indonesia, as a major regional partner for weaponry development and trade.

The leaders agreed to promote both government- and civilian-level collaboration on oil and gas exploration, and production and the development of green technology, bio-technology and information and communications technology.

South Korea, the world's No. 2 liquefied natural gas (LNG) buyer after Japan, imported 25.8 million tons of LNG last year, 23 percent of which came from Malaysia, government data showed.

South Korea-Malaysia partnerships, traditionally boosted by cooperation on natural resources, are now expanding to renewable energy development, such as solar power and electric car battery production, as well as education and culture.

In addition, the leaders agreed to "further cooperate on peaceful uses of nuclear energy" as stated in a 2009 pact between their related government agencies.

Malaysia is a potential market for South Korea's nuclear power technology exports, which were spurred by its US$20 billion contract with the United Arab Emirates a year ago to construct nuclear reactors there.

On regional security, South Korea and Malaysia condemned North Korea's recent artillery attack on the South Korean border island of Yeonpyeong, which killed two soldiers and two civilians.

The leaders "shared the view that the attack constitutes an unprovoked act of hostilities in contravention of the principles enshrined in the United Nations Charter, as well as a serious threat to the peace and stability of the Korean Peninsula," a statement read.

The two nations signed a treaty on mutual legal assistance in criminal matters and memorandums of understanding on science-technology research and collaboration in the biofuels and bioenergy industries.

Lee was to wrap up a two-day state visit here later Friday. It is Lee's first trip to the Southeast Asian nation since taking office in early 2008.

The two sides agreed that Lee's trip "was pivotal in giving a fresh impetus" to their ties, the statement said.


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