South Korean President Lee Myung-bak greets the Myanmar Prime Minister, General Thein Sein, ahead of the opening of the South Korea-ASEAN special summit at Seogwipo, on Jeju Island, on June 1.

SEOGWIPO, South Korea – South Korea and ASEAN on June 2 completed a free trade agreement covering almost 650 million people, while vowing to fight protectionism and tackling together the global economic crisis.

The agreement was made at a two-day summit planned by Seoul to strengthen economic, political and cultural links with the Association of Southeast Asian Nations (ASEAN) and to celebrate the 20th anniversary of South Korea becoming a dialogue partner of the regional bloc.

The leaders of South Korea and the group of 10 Southeast Asian nations ended the summit by also pledging further cooperation to boost Asia’s financial sector by supporting the development of a stronger regional bond market.

In an immediate move to strengthen economic ties, Seoul and ASEAN signed an agreement to complete a free trade pact they hope will nearly double trade to US$150 billion by 2015.

The investment accord is the final plank of a comprehensive pact that also covers trade in goods and services. The trade in goods pact went into effect in 2007 and the services agreement last month after talks began in 2005.

In 2008, two-way trade was worth $90.2 billion, compared with $46.4 billion in 2004.

“Today, Korea and ASEAN have taken another important step towards being partners for real and friends for good,” summit host and South Korean President Lee Myung-Bak told a news conference.

He predicted that by 2015, when ASEAN achieves its goal to become a single market and manufacturing base, the grouping would “probably supersede the European Union in terms of size and importance as an economic bloc”.

Thai Prime Minister Abhisit Vejjajiva, whose country currently holds ASEAN’s rotating chair, described South Korea as one of ASEAN’s “strongest and most active partners”.

In an end-of-summit statement, they called also for the speedy implementation of a $120-billion emergency currency pool agreed last month with China and Japan to help East Asian economies fight financial stress.

They also called for the setting up of an “independent surveillance unit” to detect signs of future financial crises before they hit the region and to assess countries wanting to draw from the currency pool.

In response to the global economic downturn, the 11 leaders reaffirmed their “commitment to do our utmost to stimulate economic growth in the region and stand firm against protectionism”, according to the statement.

They said strengthening the Asian bond market will allow the region’s massive savings to be used to fund development projects and spur growth, while there was also a pledge to expand cooperation in the energy sector.

South Korea is pushing to further increase its presence and influence in ASEAN, which has a combined population of almost 600 million and gross domestic product of around $1.3 trillion.

Analysts said Seoul’s neighbours China and Japan are already ahead in engaging the regional bloc.

South Korea’s finance ministry said the country sees ASEAN “as an export market which can offset sluggish markets in developed countries”, especially after the global financial crisis.

Apart from exports, ASEAN officials say South Korean companies are expected to benefit from infrastructure spending, which is a major part of government stimulus packages in Southeast Asia.

Seoul will also have better access to the region’s massive wealth in natural resources including timber, rubber and oil and gas.

North Korea was also high up the agenda at the summit after it tested its second nuclear bomb on May 25. It followed up by renouncing the 1953 armistice on the Korean peninsula and launching short-range missiles.

Pyongyang also appears to be preparing a long-range missile test.

South Korean President Lee Myung-Bak and the 10 ASEAN leaders in a statement condemned the nuclear test and recent missile launches as “clear violations” of UN Security Council resolutions and of agreements reached at six-party nuclear disarmament talks.

They said peaceful denuclearisation of the Korean peninsula was essential to keep the regional peace and expressed full support for resumption of the stalled six-party talks.

“North Korea’s underground test is a serious threat to peace and security in Northeast Asia and beyond,” Lee told a closing news conference, expressing “sincere gratitude” to ASEAN’s leaders for their statement.