German Chancellor Gerhard Schroeder left Malaysia for Singapore today as part of his week-long Southeast Asian tour to boost ties despite the deadly Severe Acute Respiratory Syndrome outbreak in the region.

During Schroeder's first stop in Malaysia, the two sides agreed to set up a joint economic commission to boost trade.

Last year, Germany was Malaysia's ninth largest trading partner with bilateral trade at US$5.03 million, and its top foreign investor with manufacturing investments worth US$1.32 million.

On the economic commission, Trade Minister Rafidah Aziz.said despite the sluggish global scenario, there was an uptrend o­n German investments in the country.

There was already a strong foundation between private sectors of the two countries and "we see trade improving," she told reporters after talks with German Economics and Labour Minister Wolfgang Clement late yesterday.

The German minister praised Malaysia's rapid development growth and said the commission would be particularly beneficial to the private sector.

Rafidah and Clement earlier witnessed the signing of an agreement between the Malaysian and Germany chambers of commerce and industry to strengthen economic and trade relations.

UN-led role in Iraq

There are some 300 German companies in Malaysia, led by chemicals giant BASF AG and industrial concern Siemens AG.

Schroeder and Prime Minister Dr Mahathir Mohamad yesterday called for a United Nations role in rebuilding war-torn Iraq and backed an independent Palestinian state to restore peace in the Middle East.

Schroeder's delegation includes his economics and labour minister Wolfgang Clement and business leaders.

After Singapore, he has scheduled stops in Indonesia and Vietnam.