Such a commitment will spur economic confidence throughout the region, Mr Lee told fellow leaders from both sides at a closed-door meeting.

The collective responses will also make a difference in these times of global uncertainty, he added.

PM Lee was speaking at the first of two meetings for leaders of the Asean regional grouping and South Korea. The other will be held today.

The two-day Asean-South Korea Commemorative Summit is being held on the picturesque southern island of Jeju to mark 20 years of dialogue relations between both sides.

In his address, Mr Lee also spoke on the tensions in the Korean peninsula following North Korea's nuclear threat.

However, strengthening economic ties was the main theme of his address.

Both sides, he said, 'must continue to strengthen our regional networks, deepen our economic links, liberalise our economies and promote investments in each other's countries'.

'In this way, we can work together to steer our region forward to recovery and to further progress,' he added.

Referring to a joint communique to be issued today, Mr Lee said it 'contains many good ideas to consolidate our cooperation'.

One of them is for an Open Skies agreement, an idea he endorsed.

'Greater civil aviation links between Asean and South Korea will encourage interactions between our businesses and peoples, boost our tourism sectors and help build a more vibrant region,' he said.

Such a pact could give airlines of both sides free access and no limits on the number of flights, among other benefits.

As for the investment agreement, its signing is a 'significant leap forward', said Mr Lee.

It makes South Korea the first among the Asean Plus Three Dialogue Partners to complete a comprehensive free trade agreement (FTA) with Asean, he added. The other partners are China and Japan.

The agreement completes more than four years of negotiations on the Asean-South Korea FTA.

Earlier, two agreements on goods and services under this FTA were signed, one in 2007 and the other last month.

With the FTA, consumers can expect lower-priced goods while businesses can enjoy tariff concessions and greater ease in customs clearance, starting as early as next year.

PM Lee also welcomed the establishment of the Asean-South Korea Eminent Persons Group, tasked to take stock of relations in the past 20 years and to identify priority areas for future cooperation.

South Korea has spared no effort in celebrating the summit, blanketing Jeju Island with the flags of the 10 Asean countries and lining the roads with flower pots.

It even re-named a highway leading to the summit venue, International Convention Centre, as 'Asean Road'.

Its President Lee Myung Bak is also using the summit to plug his New Asia Initiative, which seeks deeper diplomatic and economic ties with other Asian countries beyond its traditional markets in China, Japan and Russia.

He said yesterday South Korea aims to raise bilateral trade with Asean members to over US$150 billion (S$217 billion) by 2015, up from US$90.2 billion now.

He also announced plans to double aid to US$400 million by 2015 and initiate programmes for skills sharing and cultural exchange.

'Regional cooperation in Asia is increasingly becoming a must-have necessity due to the effects of globalisation,' he said.

Asean is South Korea's third-largest trading partner and its second-largest foreign investment destination. South Korea is the bloc's fifth-largest trading partner.

Yearly, around 3.2 million South Koreans visit Asean while 800,000 from Asean holiday in the Land of the Morning Calm.

Today, PM Lee flies to Seoul for bilateral meetings with South Korean leaders.

-end of ST article