The Latest: ASEAN community still needs work

Staff Writer
Columbus CEO

KUALA LUMPUR, Malaysia (AP) — Ten Southeast Asian heads of state and nine world leaders, including President Barack Obama, are meeting in Malaysia to discuss trade and economic issues. Terrorism and disputes over the South China Sea are also on the agenda. (All times local):

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3:45 p.m.

The ASEAN Business Advisory Council says the transformation of the diverse region into an ASEAN Economic Community by Dec. 31 is "not the finished article" and much work needs to be done.

Council Chairman Mohamad Munir Abdul Majid says trade in goods across the region is largely tariff-free, but significant non-tariff barriers and measures are hindering their seamless flow.

He told a regional business conference on the sidelines of ASEAN summits this weekend that progress in the liberalization of services, in free flow of investment and capital, and freer movement of skilled labor have also been slow.

Munir called for governments to work closely with the private sector to move the AEC further ahead and remove all impediments and non-compliance to make the Europe-like community a viable entity.

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3:20 p.m.

The Organization of Economic Cooperation and Development says growth in China is expected to continue to slow to an average of 6 percent annually over the next five years, while India's expansion will pick up to 7.3 percent during the same period.

According to the OECD annual outlook launched at a regional business conference on the sidelines of ASEAN summits this weekend, China's slowdown means lower export demand and investment flows to Southeast Asia, which will see growth dip to an average 5.2 percent annually through to 2020.

The report cites China's slowdown, U.S. monetary tightening and slowing productivity growth as key challenges to maintain the region's growth momentum.

It says the transformation of the Southeast Asian region into an economic community modelled after the European Union by Dec. 31 is a major milestone, but actual integration activities such as in services sector have been slow. It calls for more efforts to help poorer members Cambodia, Laos and Myanmar to narrow development gaps in the region.

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1 p.m.

The head of Southeast Asia's main grouping says the region needs a legally binding agreement to ensure that a maritime dispute with China is resolved peacefully, because an existing declaration of amity has proved to be useless.

The 10 members of the Association of Southeast Asian Nations and China signed the declaration, known by its acronym DOC, in 2002, promising in good faith to resolve their territorial and jurisdictional disputes by peaceful means, without "resorting to the threat or use of force."

ASEAN Secretary-General Le Luong Minh told The Associated Press Friday that "the DOC has never been fully and effectively implemented and that's why we need a new agreement which would be legally binding."

He says such an agreement should be capable of not only preventing but also managing incidents such as "the ones that have been taking place." He did not name China but was referring to Beijing's recent land reclamation and the construction of artificial islands in the South China Sea.

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12:35 p.m.

Prime Minister Najib Razak of Malaysia says Southeast Asia will be the fourth-largest market in the world by 2050, thanks to the formation of a regional economic community.

Najib was speaking at a business conference Friday, held on the sidelines of a series of summits this weekend, led by the Association of Southeast Asian Nations, or ASEAN.

He says: "The coming into being of the ASEAN community marks a new beginning for more than 630 million people, the birth of an integrated region — an entity that is a global economic force."

ASEAN is scheduled to formally sign on Sunday a charter to announce the creation of the ASEAN Economic Community.

Najib says "as a single market ... ASEAN will be the fourth largest in the world by 2050, at the latest."

He says that last year, collective foreign investment in the region hit $136 billion, more than in the U.S. or China. He says ASEAN is expected to post an average annual GDP growth of 5.6 percent through to 2019.

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9 a.m.

Malaysian Prime Minister Najib Razak says the formation of the ASEAN Economic Community will benefit poor and unskilled workers.

He says strong economic growth and an inflow of foreign direct investments have created jobs, with the average ASEAN unemployment rate at a low of 3.3 percent. He said this in an interview with national news agency Bernama published Friday.

He said there are huge opportunities for skilled workers, as countries look to grow from higher value-added activities and knowledge-based sectors.

ASEAN is a grouping of 10 countries in Southeast Asia. It embarked on the creation of a Europe-like economic community a decade ago, and it will be formally declared as an entity at the grouping's summit this weekend.

Najib says there is still more work to be done, as creating an integrated economic community cannot be done overnight.

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8 a.m.

Malaysian police say they have stepped up security significantly for a regional leaders' summit this weekend amid unconfirmed reports of the presence of Islamic State suicide bombers in Kuala Lumpur.

National police chief Khalid Abu Bakar says reports of imminent threats in Malaysia "have yet to be confirmed." An internal police memo that was leaked on social media this week warned the Islamic State has suicide bombers in Kuala Lumpur and in Sabah state on Borneo island.

Khalid said in a statement late Thursday that security has been tightened for the regional summit involving 18 world leaders, including U.S. President Barack Obama, in the wake of last week's deadly attacks in Paris.

Malaysia has detained about 150 suspects since 2013, some who were allegedly plotting attacks in the country.