The United States and 10 Southeast Asian nations signed a trade and investment arrangement on Friday (25/8/06) that opens the door to possible free-trade talks, reports Indonesia’s Trade and Investment News published by the Coordinating Ministry for the Economy. 

US Trade Representative Susan Schwab signed the Trade and Investment Framework Arrangement in Malaysia with the 10 member states of the Association of Southeast Asian Nations (ASEAN). 

"The can-do spirit of the members of ASEAN reflects the can-do spirit we are so proud of in the United States," Schwab said after signing the pact, according to Reuters.  "The TIFA with ASEAN represents an important step forward in the trade relationship with the region." 

The US is the biggest buyer of ASEAN goods and the region's largest foreign direct investor, injecting $8.7 billion into the region last year, ASEAN data shows.  In 2004, US demand accounted for 14% of ASEAN exports.  

The framework agreement seeks to lower non-tariff barriers to trade and investment and is a necessary first step if both sides want to begin free-trade negotiations.  Washington has played down this prospect, although it already has a free-trade deal with Singapore and is in free-trade talks with Malaysia and Thailand. 

Work to build on the pact will involve development of an ASEAN single-window facility to smooth the flow of goods to the US, and cooperation to foster trade in agricultural goods and new drugs, Malaysian Trade Minister Rafidah Aziz said. 

"This is not a legally binding document but a framework for technical cooperation," she added.