Reuters-ASEAN kicks off meetings as

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Subject: Reuters-ASEAN kicks off meetings as Indonesia tensions rise

Wednesday September 29, 3:41 am Eastern Time
ASEAN kicks off meetings as Indonesia tensions rise
By Valerie Lee

SINGAPORE, Sept 29 (Reuters) - Southeast Asia's trade and economic ministers
kicked off meetings in Singapore on Wednesday amid a rift between Australia
and Indonesia that threatened to overshadow the region's push towards free
trade.

But senior officials from the Association of South East Asian Nations
(ASEAN) said rising temperatures between Indonesia and Australia on the
trade front failed to affect Wednesday morning proceedings.

``There is nothing yet. We haven't talked to the Australians,'' ASEAN
Secretary-General Rodolfo Severino told reporters at the sidelines of the
conference.

ASEAN groups Singapore, Indonesia, Malaysia, the Philippines, Thailand,
Brunei, Laos, Vietnam, Cambodia and Myanmar. Australia and New Zealand are
the group's trade dialogue partners.

Trade became an issue between Australia and Indonesia when Jakarta said it
would help find new supply sources for importers who wanted to stop buying
Australian products after relations between the neighbours soured over East
Timor.

On his arrival in Singapore, Indonesian Trade Minister Rahardi Ramelan
declined comment on whether he was going to meet his Australian counterpart,
Mark Vaile.

On Tuesday Ramelan turned down an offer to meet Vaile, who hoped to have
bilateral talks on Friday to smooth over strained relations between the two
nations. But an Indonesian official said on Wednesday the meeting may yet
take place.

INVESTMENT SESSION PAVES WAY FOR INVESTMENT FLOWS

The ASEAN Economic Ministers meeting officially opens on Thursday, followed
by sessions between the group and Australia and New Zealand, and also
officials from Japan.

Officials said Wednesday's ASEAN Investment Area council meeting had paved
the way for free investment flows in the region.

``Despite the economic crisis, the will to push on with the opening up of
the ASEAN Investment Area remains very strong,'' said Singapore's Trade and
Industry Minister George Yeo.

``Reflecting all this is the common political will to move as a region.''

Under the investment area agreement, ASEAN member countries are committed to
opening up industries and granting national treatment to all ASEAN investors
immediately, except in certain industries.

At the grouping's ASEAN Free Trade Area council meeting in the afternoon,
Malaysia was widely expected to ask for ``breathing space'' for inclusion of
some automotive products in the list of items with five to zero percent
tariffs as its motor vehicle industry was badly hit during the Asian crisis.

According to local newspaper reports, Malaysia was ready to cut tariffs on
car parts and components to between zero and five pct by the ASEAN deadline
of 2002, but not for imports of completely knocked down and completely built
up units.

ASEAN's Severino declined comment on the matter.