Asean Creates 'Community' At Summit Shadowed By Terrorism Worries

KUALA LUMPUR (Reuters) - Southeast Asian nations on Sunday established a formal community that attempts to create freer movement of trade and capital in an area of 625 million people with a combined economic output of $2.6 trillion.

The Community declaration was signed by leaders of the 10-member Association of Southeast Asian Nations in Kuala Lumpur, this year's host of the group's annual summit.

The Asean Community includes a political, security and socio-cultural dimension in a region with governments ranging from communist in Vietnam and quasi-military in Myanmar to the kingdom of Brunei and the boisterous democracy of the Philippines.

But it is the economic community that offers the most concrete opportunities for integration in a region whose combined gross domestic product (GDP) would make it the world's seventh-largest economy.

"In practice, we have virtually eliminated tariff barriers between us," said Malaysian Prime Minister Najib Razak, the summit host. "Now we have to assure freer movements and removal of barriers that hinder growth and investment."

The countries aim to harmonize economic strategies, recognize each other's professional qualifications, and consult more closely on macroeconomic and financial policies.

They have also agreed to enhance the connectivity of their transportation infrastructure and communications, better facilitate electronic transactions, integrate industries to promote regional sourcing, and enhance private-sector involvement in the economy.

Eight groups of professionals will be able to work more easily throughout the region: engineers, architects, nurses, doctors, dentists, accountants, surveyors and tourism professionals.

South China Sea

Following the signing ceremony, Asean leaders met with eight others from Asia and the Pacific for the annual East Asia summit: the United States, China, Japan, South Korea, India, Russia, Australia and New Zealand.

U.S. President Barack Obama was set to raise concerns at the summit about China's more assertive posture in the South China Sea. On Saturday, at a bilateral meeting with Asean leaders, Obama said countries should stop building artificial islands and militarizing their claims in the disputed South China Sea.

China has been transforming reefs in the Spratly archipelago into artificial islands and has built airfields and other facilities on them. This has caused ripples of alarm in much of East Asia about China's intentions and freedom of navigation in a waterway through which $5 trillion in ship-borne trade passes annually.

China insists it has undisputed sovereignty over most of the South China Sea, a claim that overlaps with four Asean countries.

The United States has sent military ships and war planes by China's artificial islands in recent weeks to assert its "freedom of navigation" in the sea.

Chinese Premier Li Keqiang said countries outside the region are conducting "a high-profile intervention", turning the South China Sea disputes into "a problem concerning the South China Sea's peace and stability and the freedom of navigation," the state news agency Xinhua quoted him as saying late on Saturday.

"That is in nobody's interest," Li said. "Only by expanding our common interests and seeking common ground can we narrow our differences," Li said, calling for talks between "directly concerned countries" on the issue.

Confront Islamist Extremists

Najib opened the weekend series of meetings on Saturday, calling on world leaders to confront Islamist extremism. The night before, Islamist militants killed 19 people in an attack on a hotel in Mali on Friday before Malian commandos stormed the building and rescued 170 people, many of them foreigners.

"The perpetrators of these cowardly and barbaric acts do not represent any race, religion or creed, nor should we allow them to claim to do so," Najib said in his speech at the Asean summit. "They are terrorists and should be confronted as such, with the full force of the law."

He said predominantly Islamic countries such as Malaysia have a duty to expose as lies the "ideology propagated by these extremists that is the cause of this sadistic violence."

Obama said on Saturday the Mali hotel attacks only stiffened the resolve of the United States and its allies, which would be relentless in fighting those targeting its citizens and would allow militants no safe haven.

"We will continue to root out terrorist networks," Obama told a meeting of business executives. "We will not allow these killers to have a safe haven."