Intra-Asean trade may suffer if oil prices continue to climb amid rising fears of a US-led war on Iraq, Malaysia's trade minister Rafidah Aziz said today.

If oil importing countries needed to spend more, "their capacity to import other items would be diminished," she told a news conference ahead of an Association of Southeast Asian Nations economic ministers meeting in Brunei on Sept 11-15.

The spectre of war in Iraq "worries everybody I think. When that happens, the oil price will go through the ceiling, I'm sure."

Rafidah, who will lead Malaysia's delegation to the Asean meeting, said the gathering would focus on enhancing regional trade and exchanging views on the World Trade Organiszation.

On the sidelines of the meeting, Southeast Asian ministers will meet their counterparts from China, Japan, South Korea, Australia, New Zealand and India.

Rafidah said the talks with China would address five priority areas to strengthen cooperation, including agriculture, information technology and investment.

Integrated market

A framework agreement on the Asean-China Free Trade Area, with an integrated market of 1.7 billion consumers, would be prepared for adoption at the leaders' summit in Cambodia in November.

Bilateral trade between China and Asean countries had maintained an average annual growth rate of 15 percent, she said.

Trade in the first half of this year reached 23.55 billion dollars, representing an increase of 18.7 percent over the same period last year.

Rafidah said the meeting with Japan would study the final report of the experts group on Asean-Japan Closer Economic Partnership, which would also be tabled in Cambodia during the summit.

Discussions with Australia and New Zealand would centre on trade facilitation and investment promotion.

Rafidah said Asean ministers would also meet their counterparts from China, Japan and South Korea to discuss issues of common interest prior to the Asia-Europe Meeting (Asem) in Copenhagen later this month.

The United States, Japan, European Union, China, Taiwan and South Korea are the six largest trading partners of Asean.

Trade within ASEAN stood at 160 billion dollars in 2001. The organisation groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand and Vietnam. AFP