November 1, 2002

     MANILA — Southeast Asian leaders at their annual talks next week are expected to seek stiffer counterterrorism measures and sign a landmark pact with China to forge the world's largest free-trade area, officials said.

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     The 10 Association of Southeast Asian Nations (ASEAN) leaders will meet Nov. 4-5 in Cambodia's capital, Phnom Penh, for the first time since the deadly Bali blast, the biggest terrorist strike since the September 11, 2001, attacks in the United States.
     The terrorism threat — and the reported presence of Osama bin Laden's al Qaeda-linked cells in Malaysia, Singapore, the Philippines and Indonesia — is seen as the biggest challenge to Southeast Asia in about 25 years.
     "Today's international terrorism is probably the most serious security threat in the region since the Indochina conflict," ASEAN spokesman M.C. Abad said.
     The Vietnam War was followed by a long civil war in Cambodia that provoked an invasion by Vietnamese troops in 1978 to oust a Chinese-backed regime. Beijing responded with a brief incursion into northern Vietnam.
     Since then, ASEAN has been preoccupied with managing interstate relations and conflict, not with nontraditional security issues, such as terrorism, regional diplomats say.
     "The leaders of ASEAN have taken cognizance of this threat to regional stability and economic recovery and the imperative of regional and international cooperation to combat it," Mr. Abad said.
     The ASEAN leaders are expected "to exchange views on how to further intensify the ongoing collaboration to counter this nontraditional security threat."
     The Oct. 12 terrorist attack on Indonesia's Bali island tourism paradise killed more than 190 people, mostly foreigners, and injured hundreds more.
     There are growing suspicions that Jemaah Islamiyah, a regional terrorist group believed linked to al Qaeda, had a hand in the Bali carnage, which dampened not only Southeast Asia's vibrant tourism industry, but also frightened off potential foreign investors.
     Investment house Morgan Stanley has warned that the Bali incident could permanently raise the risk premium for the whole of Southeast Asia.
     There is growing doubt among international investors that the region can contain its geopolitical and domestic sociopolitical risks, given its "strong and inseparable ties to Islam," Morgan Stanley economist Daniel Lian said in a recent report.
     Muslims account for more than half of the 500 million people in Southeast Asia. Indonesia is the world's most populous Muslim nation.
     ASEAN member states — Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam — have already signed a regional counterterrorism agreement and have another pact with the United States to fight the scourge.
     Mr. Abad, the ASEAN spokesman, said that while terrorism would place high on the agenda of the group's eighth summit, "the leaders are expected to remain focused on the economic agenda, such as enhancing the region's competitiveness through economic integration."
     The ASEAN leaders are slated to sign a pact with Chinese Prime Minister Zhu Rongji for a giant free-trade area (FTA) covering 2 billion people of Southeast Asia and China.
     The ASEAN summit is usually followed by a meeting with the leaders of China, Japan and South Korea. This year, India will make its debut with the participation of Prime Minister Atal Behari Vajpayee.
     Details of the ASEAN-China FTA plan are to be incorporated in a "framework agreement on ASEAN-China economic cooperation," regional diplomats said.
     "Under this agreement, we hope to commence negotiations for tariff reduction and elimination for goods in early 2003, to be concluded in about a year," a senior diplomat told AFP.
     He said the objective was for China to have a free-trade area with senior ASEAN member states Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand by between 2010 and 2013, and the newer members Burma, Cambodia, Laos and Vietnam between 2013 and 2016.
     The ASEAN leaders are also expected to sign with China a hotly debated declaration to resolve disputes in the South China Sea.
     Brunei, Malaysia, the Philippines and Vietnam, as well as China and Taiwan, have laid claims to the Spratly Islands, a potential military flash point in the South China Sea.

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Updated at 10:00 p.m.