Malaysia, South Korea mull free trade pact

PUTRAJAYA, Malaysia — Malaysia and South Korea agreed Friday to explore a free trade agreement as the two countries seek to double trade over the next five years.

The decision followed talks between Prime Minister Najib Razak and South Korean President Lee Myung-bak, whose three-day visit to Malaysia was aimed at boosting economic ties and commemorating 50 years of relations between the two countries.

Najib said two-way trade had soared 34 percent this year and is expected to exceed $16 billion. Both leaders are keen to negotiate a free trade deal, that will complement a similar pact already in place between South Korea and the 10-member Association of Southeast Asian Nations, he said. Malaysia is an ASEAN member.

"We believe that if there is a separate bilateral free trade agreement between Malaysia and (South Korea), it will certainly enhance our bilateral economic cooperation," Najib told a joint news conference.

"We manage to achieve a tremendous amount of bilateral trade this year in the figure of $16 billion. In the next five years, I am confident we can double this figure," Lee added.

Both leaders agreed to set up a business council to bolster ties between their private sectors and for South Korea and Malaysia to jointly invest in markets in developing countries and work together in oil and gas projects.

Lee also invited Malaysia to study South Korea's use of nuclear power as a source of clean energy.

"The nuclear reactor is going to be the energy of the future, which will not only help us attain our energy needs but also help us tackle climate change," Lee said.

In a joint statement, the leaders condemned North Korea's recent attack on South Korea's Yeonpyeong Island as an "unprovoked act of hostilities" and a serious threat to peace and stability in the Korean peninsula. They urged North Korea to abandon all nuclear weapons and cease existing nuclear and ballistic missile programs.

The island, a tiny enclave of military bases and fishing communities along the Koreas' disputed sea border, went up in flames and was left a scene of destruction.

The two Koreas remain in a technical state of war because their three-year conflict ended in 1953 with a truce, not a peace treaty. North Korea disputes the maritime border drawn by U.N. forces and considers the waters around the front-line islands its territory.