Thailand finds formula to settle rice dispute with SKorea, officials say

MANILA (AP) - Thailand has found a way to settle a dispute over rice with South Korea, allowing it to eventually join a free-trade deal between fellow Southeast Asian countries and Seoul, officials said Thursday.

ASEAN has been frenziedly pursuing free trade deals to bolster its competitiveness and lure foreign investments, which its member states fear they could lose to Asian powerhouses China and India.

ASEAN members, except Thailand, signed an agreement in May 2006 to start freeing up barriers to trade in goods as part of plans to create a free trade area by 2012.

Thailand, the world's top rice exporter, refused to join to protest South Korea's insistence on excluding rice.

ASEAN Secretary-General Ong Keng Yong said both sides have found a way to resolve the rice issue in recent negotiations.

"They have reached some understanding," Ong told reporters.

Philippine Trade Assistant Secretary Ramon Vicente Kabigting said South Korea has stood pat on the exclusion of rice from the deal, but Thailand was now willing to accept that in an arrangement where it would slow down the liberalization of trade in certain commodities with South Korea, Kabigting said.

Under that arrangement, Thailand could now sign ASEAN's agreement with South Korea on trade in goods, one of three key components in a proposed free trade area, he said.

"The Thais will finally join up on the trade in goods," Kabigting said on the sidelines of an annual meeting of senior ASEAN economic officials.

Another key agreement, trade in services, may be signed by ASEAN and South Korea in November, and negotiations for the last component for a free-trade area, an accord on investments, may be completed next year, he said.

Meanwhile, ASEAN's free trade talks with Japan have progressed, with both sides agreeing on the text of possible accords on trade in services and investment, according to Kabigting.

Negotiations were continuing on the wording of a proposed agreement in trading in goods, he said.

Negotiators were working to include a section about economic cooperation in the comprehensive free-trade deal they are trying to forge to allow both sides to pursue future projects even after deal is signed, he said.

ASEAN has also been negotiating free trade deals with Australia, China, India and New Zealand and soon will soon start talks with the European Union.

ASEAN's members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam _ countries ranging from some of Southeast Asia's most affluent to some of its poorest.