* Thai PM urges progress on regional economic partnership
* Bloc seeking to bolster position in face of trade war
* Chairman's statement touches on Myanmar, South China Sea
(Edits wording in first paragraph)
By Patpicha Tanakasempipat and Panu Wongcha-um
BANGKOK, June 23 (Reuters) - Southeast Asian leaders agreed
on Sunday to work together on the region's economy and security
to strengthen their position to face growing U.S.-China
tensions, as they wrapped up their summit in Bangkok.
The 10-member Association of Southeast Asian Nations (ASEAN)
will need its collective economic strength for bargaining power
globally, especially amid the trade tensions between the world's
top two economies, Thai Prime Minister Prayuth Chan-ocha told a
news conference, as chairman of the 34th ASEAN Summit.
Prayuth urged ASEAN nations to complete negotiations this
year for the China-initiated Regional Comprehensive Economic
Partnership (RCEP) pact that includes 16 countries but has been
held up by disputes between China and India over access to
markets and protected lists of goods.
Negotiations began in 2012 on RCEP, which envisages the
creation of a free trade zone encompassing 45% of the world's
population and more than a third of its GDP, but does not
involve the United States.
"This will help ASEAN handle the changes and uncertainty
that will happen in the region going forward, particularly the
impacts of trade tension between ASEAN's important trade
partners," Prayuth said.
First proposed by China, RCEP's 16 signatories comprise the
10 ASEAN member states and six Asia-Pacific countries, including
major economies China, India, Japan and South Korea. ASEAN has
existing free-trade agreements with all six countries.
"If we can do this, we will have the bargaining power and
base for negotiation. Because when combined, we are 650 million
people, the largest regional bloc in the world," the Thai prime
minister said of ASEAN.
Singaporean Prime Minister Lee Hsien Loong told reporters
that ASEAN "must expect some fallout" from the U.S.-China trade
war, pointing to Singapore's already slowing economy this year.
Four ASEAN countries - Thailand, Indonesia, Singapore and
Vietnam - will discuss the trade war in next week's G20 summit,
which assembles 20 major economies, in Tokyo, Prayuth said.
Thailand will host the next ASEAN summit in November.
ASEAN members also agreed on a common approach on a U.S.-led
Indo-Pacific initiative on Sunday, at a time when U.S.-China
tensions are rising and forcing ASEAN countries to take sides.
Prayuth hailed the bloc's agreement on the ASEAN Outlook on
the Indo-Pacific as a "significant step," as it will help guide
cooperation in the region in an increasingly polarised
geopolitical landscape.
The outlook, seen by Reuters, is aimed at "helping to
promote an enabling environment for peace, stability and
prosperity in the region in addressing common challenges".
SOUTH CHINA SEA
The chairman's statement, released later on Sunday, called
for a de-escalation of tension in the South China Sea.
The South China Sea is one of the world's busiest waterways,
and a potential flashpoint in the region as several ASEAN
members - the Philippines, Vietnam, Malaysia, Brunei and
Indonesia - as well as China and Taiwan have conflicting
territorial claims.
"We emphasised the importance of non-militarisation and
self-restraint in the conduct of all activities by claimants and
all other states ... that could further complicate the situation
and escalate tensions in the South China Sea," the statement
said, without naming China but referring instead to its
militarisation of islands and islets.
The statement also said a first reading of a Code of Conduct
negotiating draft for the disputed South China Sea would likely
be finished by this year. Thailand has said the final reading
could be expected by the end of 2021.
"There are some issues in the COC which are going to be very
difficult to work out – in their nature they are going to be
contentious," Singapore's Lee said. "I think the vital interests
will not be easy to reconcile."
The chairman's statement also said ASEAN supported the
repatriation process of Myanmar's fleeing Rohingyas, but stopped
short of condemning Myanmar.
Rights groups have called on ASEAN to rethink support for
plans to repatriate Rohingya Muslims who have fled member state
Myanmar, where activists say returnees could face discrimination
and persecution. More than 700,000 Rohingya crossed into Bangladesh in 2017,
according to U.N. agencies, after a crackdown by Myanmar's
military sparked by Rohingya insurgent attacks on security
forces.
Formed more than 50 years ago, ASEAN has historically
struggled with challenges facing the region because it works
only by consensus and is reluctant to become involved in any
matter regarded as internal to a member state.
"(We) expressed our continued support for Myanmar's
commitment to ... facilitate the voluntary return of displaced
persons in a safe, secure and dignified manner," the statement
said, not calling the Rohingya by name.
ASEAN also expected a commission created by Myanmar's
government to seek accountability through "an independent and
impartial investigation into alleged human rights violations and
related issues".
The statement, however, proved rather weak in the face of a
call on Saturday by Malaysia's foreign minister Saifuddin
Abdullah to bring the perpetrators of massacres and atrocities
against the Rohingya to justice and to "include the citizenship
of the Rohingyas" in the repatriation process.
"Developments in Myanmar ... (are) providing a litmus test
for ASEAN's capacity to manage developments in one of its member
states that have wider ramifications for the region and,
indeed, beyond," Marty Natalegawa, a former Indonesian foreign
minister, told Reuters.