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ATTENTION - RECASTS with signing of agreement ///

KUALA LUMPUR, July 28, 2006 (AFP) - US Secretary of State Condoleezza Rice and Southeast Asian foreign ministers Thursday signed a five-year action plan aimed at boosting trade, investment and political ties. The accord highlights increasing moves towards smaller regional pacts in Asia and elsewhere in the wake of the collapse of World Trade Organsiation talks earlier this week. "ASEAN is an important organisation for us," said Christopher Hill, US Assistant Secretary, Bureau of East Asian and Pacific Affairs, referring to the Association of Southeast Asian Nations. The bloc's Secretary-General Ong Keng Yong told AFP that the ASEAN-US plan of action was "predicated on the position that the United States would like to do more to open up its trade with ASEAN countries." The association groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Under the plan, both sides will work towards an ASEAN-US Trade and Investment Framework Agreement that will serve as a mechanism to ease trade and investment. The bloc offers a combined market of more than 500 million people and an alternative manufacturing base to China for multinational companies. Officials have said the plan could lay the groundwork for a possible US-ASEAN free trade pact, pointing out that ASEAN is already in talks for region-wide free-trade agreements with China and Japan. ASEAN in May signed a pact liberalising trade in goods with South Korea, but Thailand was left out due to internal disagreements and objections to Seoul's barriers on rice. Thailand, a major rice exporter, may sign on later. Analysts have said the United States would not want to be left out in case these trade talks evolve into a wider and potentially powerful East Asian free trade zone. ASEAN chief Ong said the grouping had not yet tapped the full potential of trade with the United States, the world's largest economy. The ASEAN region hosts about 88 billion dollars in direct US investments and is the third-largest overseas market for American exports, ASEAN spokesman MC Abad said. Two-way ASEAN-US trade totalled 136 billion dollars in 2005 and US exports to ASEAN countries support nearly 800,000 American jobs, more than the group's trade with China, which amounted to 130 billion dollars that same year. Apart from trade, the framework also covers other areas of cooperation such as the fight against terrorism and HIV/AIDS, and energy cooperation and diversification. mba/dk/mc