by M. Jegathesan =(PICTURE)=

KUALA LUMPUR, Aug 25, 2006 (AFP) - The United States on Friday signed a trade and investment pact with Southeast Asia in a bid to bolster its influence in the region which is growing closer to China. The Trade and Investment Framework Arrangement (TIFA), seen as a precursor to a full free-trade agreement, was inked by US Trade Representative Susan Schwab and her Southeast Asian counterparts. "The ASEAN region as you know is a very high priority for not just US commercial and economic ties but for the overall geo-political interest and commitments of the United States," Schwab told reporters. Washington has already signed TIFA pacts with key regional economies. The new deal with the Association of Southeast Asian Nations (ASEAN) prepares the way for a free-trade agreement (FTA) between the bloc and the United States, its largest trading partner. Both Schwab and Southeast Asian ministers have been reluctant to say when FTA negotiations could begin, but one ASEAN official told AFP that talks could begin in 2010 when six ASEAN members implement trade liberalisation programs. Schwab said the TIFA would boost economic ties between the US and ASEAN which with a population of 560 million was "one of the most rapidly growing and dynamic economies in the world." "In a trading relationship that now constitutes 150 billion dollars a year, ASEAN makes up the fourth largest trading partner with the United States... A TIFA is going to generate trade and investment," she said. Under the TIFA, the United States and ASEAN will establish a formal ministerial dialogue which is aimed at expanding trade and investment. They have also agreed to initiate a work plan on three projects key towards starting free-trade negotiations. They include the creation of a common ASEAN system for entry of goods, establishing an agreement on sanitary standards to foster agricultural trade, and harmonising standards for pharmaceutical registration and approvals. An ASEAN official told AFP that the situation had changed since 2002 when work began at a painstaking pace on the US-ASEAN TIFA deal. "TIFA will give political impetus to our economic relations. Talks took four years to conclude. It began in 2002 but US interest (then) was not there," he said. "Now they realise the importance of ASEAN. They want to keep their influence in the region here," he said. "They are aware that trade between ASEAN and China is increasing." One major irritant to the US-ASEAN relationship has been military-run Myanmar, which the US has heavy sanctions against over its refusal to introduce democratic reforms or release opposition leader Aung San Suu Kyi. Schwab said Thursday that the trade embargo was unaffected by the TIFA pact, which did not change the fact that the US does not and will not trade with Myanmar. "The TIFA creates building blocks and those building blocks will affect countries with which we have trade, they aren't going to affect a country with which we don't have trade," she said. "Obviously the United States has great concerns over the situation with Burma (Myanmar) and the regime in Burma," she said but signalled it would not sacrifice its relationship with ASEAN over the issue. "When you think of the volume and the value of trade between ASEAN countries and the United States, and foreign direct investment, we are very much a part of this region and we intend to stay with it." jsm/sls/lh