EAEC could have global benefits<\/p>\n
By Mahathir Mohamad<\/p>\n
KUALA LUMPUR: In December 1990, when I proposed the simple
\nidea of an East Asia Economic Group (EAEG), which I said should
\nbe like the successful \"Cairns Group,\" I did not know I was being
\naudacious. I did not think I was proposing anything radical.<\/p>\n
Since then, there have been so many interpretations and doubts
\ncast on it and enough threats and pressures against it that the
\nproposal appears to be truly a powerful idea.<\/p>\n
Yet it is nowhere near the concept of the European Economic
\nCommunity, now the European Union, or a trade bloc like the North
\nAmerican Free Trade Agreement, or even anything like the
\nAssociation of Southeast Asian Nations grouping. As has been
\nstressed over and over again, it is to be merely a consultative
\nforum for East Asian countries.<\/p>\n
When ASEAN, fearing objections on the part of the United
\nStates, renamed it the East Asia Economic Caucus, the intention
\nwas made even clearer. ASEAN went further and proposed that it
\nbecome a caucus within the Asia Pacific Economic Cooperation,
\nthus making clear that it is subsidiary to the bigger APEC. But
\nobjections by the United States have persisted. And a few
\ncountries in East Asia that have benefited from the backwardness
\nas well as the prosperity of East Asian nations still refuse to
\ncome on board.<\/p>\n
At the risk of being repetitive, I would like to explain once
\nagain that the EAEC is merely a forum, and an informal one at
\nthat, intended for the countries of East Asia, big and small, to
\ndiscuss common economic problems. Obviously, the decisions of
\nsuch a loose forum cannot be binding. But it would certainly
\nenable the problems to be identified, discussed and solutions
\nproposed.<\/p>\n
It would be done at the level of officials and economic
\nministers. No summits are visualized. The member countries would
\nbe free to act on the possible solutions independently.
\nNevertheless, if free world trade is threatened, the forum can
\nadopt a common approach and a common stand in order to be
\neffective when debating in the General Agreement on Tariffs and
\nTrade, the World Trade Organization, or negotiating with trade
\nblocs such as the EU or NAFTA.<\/p>\n
It would be unreasonable to expect a small country like
\nMalaysia or Laos or even for ASEAN to negotiate effectively with
\nthe giant economic blocs of the West that, as we all have seen,
\nhave never hesitated to use strong-arm methods at the drop of a
\npin.<\/p>\n
Other than the specific issues agreed to for common stands,
\nthe countries in the EAEC would remain free to trade and enter
\ninto economic relations with anyone they like. They are not to be
\nrestricted in any way. In other words they are not expected to
\nact as members of a trade bloc.<\/p>\n
The other important function of the EAEC is to help the
\nmembers, particularly the last developed countries, to develop
\nthrough intensified investments and trade with other members.
\nWhen Japan, purely for its own economic reasons, invested in the
\nSoutheast Asian countries, these countries prospered. They then
\nbecame very good markets for all kinds of goods and services
\nmarketed by the developed countries, including Japan. There was
\nno preferential treatment for anyone.<\/p>\n
If the EAEC has a program for investments and trade with
\nmember countries, their development would be accelerated. With
\nprosperity, their trade with countries outside the group will
\nalso increase. No one benefits when countries are poor. But
\nprosperous developing countries will make good markets for the
\ndeveloped industrialized nations. There is no way these countries
\nare going to be able to manufacture or produce all that they
\nneed.<\/p>\n
Clearly the EAEC, far from being harmful, is beneficial to the
\neconomic prosperity of the world. The EAEC will benefit the
\nmember countries, both developed and developing, but in addition
\nthe countries outside the group that will be trading with the
\nEast Asian countries will find East Asians more able to purchase
\ngoods and services. They will need fewer loans or aid. Other poor
\ncountries in other regions will benefit from the release of such
\nfunds.<\/p>\n
Even today the prosperity of Southeast and East Asian
\ncountries has benefited those European and U.S. companies with
\nthe expertise and the products needed by these countries. With
\nthe EAEC, the economic development and prosperity of member
\ncountries will accelerate, thus increasing the business
\nopportunities of the European and U.S. companies.<\/p>\n
It is not in the interest of the EAEC countries to reject the
\nexpertise and products of Europe and the United States. Indeed
\nthey have never shown a tendency to do so. They buy the best at
\nthe lowest price. Market forces, not regional considerations,
\ninfluence them.<\/p>\n
The EAEC is intended to be an open regional organization. It
\nis not a closed one like the EU and NAFTA, where members have
\nprivileged access to each other, while nonmembers are denied
\nthese privileges. Open regionalism helps to expedite regional
\ngrowth without excluding the usual trade and other economic
\nrelations with other countries or regions.<\/p>\n
Looked at from any angle, the EAEC harms no one and is good
\nfor all. Its members are not required to change their present
\nrelations with any region or any country outside the group.
\nJapan, for example, is not required to restrict its trade with
\nthe United States or with Europe. Indeed Japan's special
\nrelations with the United States is not incompatible with the
\nEAEC. Neither are the European and North American countries
\nrequired to make any changes in their trading or economic
\nrelations with any of the member countries of the EAEC or with
\nthe group as a whole.<\/p>\n
The EAEC is a simple forum dedicated to protecting and
\npromoting free, unmanaged regional and international trade and to
\naccelerating economic growth of member countries. It is not a
\ntrade bloc, a customs union or a free trade area like the EU and
\nNAFTA. It has no political or security agenda. It does not bind
\nits members and it is not a formally structured organization.<\/p>\n
This being so, it is difficult to understand why there is so
\nmuch opposition to it. It is even more difficult to understand
\nwhy countries, which themselves belong to formal trade blocs, and
\ndo not object to trade blocs being formed in Europe, North
\nAmerica and between Australia and New Zealand -- the Australia
\nand New Zealand Close Economic Relations Trade Agreement or
\nANZCERTA -- are so vehemently opposed to the open regional forum
\nof East Asian countries. We merely want to talk to each other
\nabout our economic problems, as a group and as a region. Beyond
\nthat we are free to do what we think is best for each one of us.
\nWe are not bound or restricted or committed to submit to the
\nviews of the group.<\/p>\n
Yet we are openly told that we may not speak to each other
\nwithout the presence of the United States. Why? Are we not free?
\nAre only the Europeans free? Or is it that we cannot be trusted?
\nAre we suspected of planning an economic war on anyone; on the
\nworld? We, who have gained so much from peaceful free trade, from
\naccess to the world markets; are we insane enough to shut
\nourselves out and deprive our-selves of all that we have
\nbenefited from?<\/p>\n
I hate to suggest that there may be a racial element in this.
\nBut when we have eliminated all other reasons, we are left only
\nwith racial differences. Is it that Asians have less rights than
\npeople of European origin? Is it that Asians cannot be trusted?<\/p>\n
Asians have welcomed APEC even though the eastern Pacific
\nmembers are also members of NAFTA, a trade bloc. We trust the
\npeople of the American continent. Can we not be trusted to be
\nmembers of the EAEC forum and APEC at the same time?<\/p>\n
Most East Asian countries trade hugely with the United States.
\nWe would not want to sacrifice that trade for the sake of an East
\nAsian restrictive trade bloc. So the United States does not stand
\nto lose because of the EAEC. Indeed trade between the EAEC
\ncountries and the United States is likely to grow faster. Yet the
\nU.S. objects to the formation of the EAEC.<\/p>\n
As for Japan, the EAEC will not prevent it from trading with
\nany country or bloc. There will be no change in Japan's present
\neconomic or political relations with countries outside the EAEC.
\nBut its membership of the caucus will be seen by other East Asian
\ncountries as a genuine helpful act. It will be much more
\nmeaningful than a thousand apologies for the events that took
\nplace more than half a century ago. If Japan really wishes to
\nmake amends, then joining the EAEC would do so better than the
\nDiet passing resolutions expressing regret.<\/p>\n
I hope that this article will help to clear the misconceptions
\nand the frequently deliberate misinterpretations regarding the
\nEast Asia Economic Caucus. The EAEC is an open regional forum and
\nnothing more. Japan, as possibly the strongest member, can ensure
\nthat this will always be so.<\/p>\n
Mahathir Mohamad is prime minister of Malaysia.<\/p>\n
-- The Daily Yomiuri<\/p>\n
Window A: It is not in the interest of the EAEC countries to
\nreject the expertise and products of Europe and the United States.<\/p>\n
Window B: Asians have welcomed APEC even though the eastern
\nPacific members are also members of NAFTA, a trade bloc.<\/p>",
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