Malaysia and Pakistan will likely sign a free trade agreement (FTA) by the end of the year, Prime Minister Abdullah Ahmad Badawi said today after talks with his Pakistani counterpart Shaukat Aziz.

"We had a very successful bilateral meeting," Abdullah told reporters. "The discussion on the FTA is proceeding very well. In all probablilty we will be able to sign an agreement by the end of the year.

"I'm happy to inform that progress has been made in various fields, in trade, communications and aviation.

"We hope to have more flights connecting Malaysia and Pakistan. We welcome PIA (Pakistan International Airlines) to come to Malaysia any time it chooses."

Abdullah said Malaysia supported Pakistan's wish to become a full dialogue partner in the 10-member Association of Southeast Asian Nations (Asean).

"We welcome Pakistan's more active role in Asean as a dialogue partner at an appropriate date," he said.

Profitable journey

Aziz said Pakistan's wanted to develop "a comprehensive economic partnership with Malaysia" and hoped the free trade talks would produce an interim agreement by July.

"We see this as a beginning of a profitable journey for both countries," he said.

On the push for a position as an Asean dialogue partner, already held by neighbouring India, Aziz said it would mean "our economic, political and cultural ties would strengthen."

Aziz, accompanied by seven cabinet ministers in a delegation of 25, is reciprocating a visit by Abdullah to Islamabad in February during which the plan for a trade agreement was announced.

Total trade between the two Muslim countries in 2003 was US$713 million, with US$623 million going to Malaysia, mainly for palm oil. Malaysia imports rice and textiles from Pakistan.

Malaysia is also actively involved in oil and gas projects, construction and communications in Pakistan, and a member of Aziz's delegation said they were hoping to encourage further investment in real estate and tourism.

The Malaysian government has announced plans to recruit 100,000 Pakistani workers amid an acute labour shortage caused by a crackdown on illegal immigrants that sent hundreds of thousands of illegal workers fleeing the country earlier this year.

Referring to this proposal, Aziz said: "We hope Pakistanis, white and blue collar, will come to Malaysia to share the economic progress of your country."

The prime ministers took no questions after making their statements to reporters.