EAEC: Still a valid prospect?<\/p>\n
By Paridah Abd. Samad<\/p>\n
KUALA LUMPUR (JP): Surprisingly, or perhaps not surprisingly,
\nASEAN is still championing the EAEC (East Asia Economic Caucus)
\ncause. ASEAN foreign ministers at the end of their annual meeting
\nin Subang Jaya, Malaysia on July 25, 1997 expressed "satisfaction
\nat the progress of EAEC" and at the increasing cooperation among
\npotential EAEC members and expressed the hope that the caucus
\nwould soon be formally instituted for the benefit of its members.
\nAn informal ASEAN summit which will be held in Kuala Lumpur from
\nDec. 14 to 16, 1997 will invite China, Japan and South Korea, a
\nde facto collection of the EAEC membership.<\/p>\n
The issue of EAEC has risen again after a lapse of some time.
\nHopefully, the rise of the issue is not related to the closing
\nterm of the present secretary-general of ASEAN, Dato' Ajit Singh.
\nWith the idea of the EAEC originating from Malaysia, Dato' Ajit
\nSingh, a Malaysian, is morally obliged to push the EAEC agenda up
\namong the highest priorities of ASEAN.<\/p>\n
But EAEC is not only championed by Malaysia. The importance of
\nits existence has been agreed by all ASEAN countries, but,
\nunfortunately, it is misunderstood by the West, especially the
\nU.S. which wasted no time persuading Japan not to join the
\ncaucus.<\/p>\n
Japan has played a significant role in delaying the formation
\nof EAEC. Indonesian Foreign Minister Ali Alatas said that "EAEC
\ncannot yet be launched as there are still objections from several
\nsides raising doubts on the part of potential members of EAEC".<\/p>\n
The Malaysian proposal for the formation of EAEC in December
\n1990, represented a stronger push from ASEAN for economic
\ncooperation within the region. The EAEC proposal was clearly
\nprompted by ASEAN's fear of the increasingly protectionist trade
\nblocs in the European Community and North America.<\/p>\n
In an atmosphere of increasing protectionism from the U.S. and
\nthe EU, the high dependence of ASEAN exporters on the American
\nand European markets will expose them to the vagaries of
\nWashington and Brussels trade policies and practices. It is
\nimportant for the ASEAN economies to become far more integrated
\nin respect to trade, investment and technology. At the same time,
\nthe EAEC proposal was also meant to take advantage of the
\nmomentum of the region's economic take-off and to rely on
\ncountries such as Japan to lead the caucus.<\/p>\n
In recent years, while Western economies were almost stagnant,
\nASEAN registered an average growth rate of about seven percent,
\nmaking it one of the most dynamic regions of the world in terms
\nof economic growth. As such, ASEAN has become more confident in
\nany decision regarding regional interests. ASEAN, particularly
\nMalaysia, which believes that Western superiority is a thing of
\nthe past, would prefer Japan to take the lead in asserting
\nEastern superiority over the West, particularly in trade and
\neconomic fields. Malaysia wanted Japan to take leadership of its
\nproposed EAEC, an idea which also reflected Malaysia's dislike of
\nthe U.S. domination of APEC. For Malaysia, Japan has not only the
\neconomic muscles, but also historical tradition in being the
\nfirst Asian country to defeat a European power -- Tsarist Russia
\nin the Russo-Japanese War of 1904-1905.<\/p>\n
The rapid economic growth of ASEAN and its Asian counterparts
\nover the past ten years has invited a great deal of interest from
\nthe U.S. and also the EU wishing to participate and to contribute
\nin the political and economic performance of the region. More
\ninterestingly, this happens at a time when these two regions,
\nespecially the U.S., are facing some difficulties with their
\ninternal economic performance.<\/p>\n
It is crucial for the U.S. to promote APEC. The U.S. with
\nmassive trade deficits and foreign debts wants to transform the
\ncountry from consumer-orientation to export-orientation.
\nWashington appears to believe that a commitment to a fast-growing
\nregional market is the key to U.S. economic recovery. Through
\nAPEC, the U.S. would explore trade arrangements with the ASEAN
\nFree Trade Area (AFTA), the North American Free Trade Area
\n(NAFTA) and the Australia and New Zealand Closer Economic
\nRelations (CER).<\/p>\n
With APEC, bilateral economic relations between the U.S. and
\nJapan have been significantly extended to the larger dimension of
\nthe Asia-Pacific region. In the current situation when U.S.
\nbilateral trade relations with Japan are becoming more difficult,
\na broader framework, the Asia-Pacific, transcends a mere
\nbilateral relationship between these two countries to bring it to
\na more significant level.<\/p>\n
As a matter of fact, the rise of ASEAN has caused its status
\nto continue to gain prominence in Japan's diplomatic strategy.
\nJapan's ASEAN strategy is to rely on economic cooperation as a
\nmeans to gradually expand and deepen its political and security
\nrelations within ASEAN. This is partly to gradually secure a
\ndominant role in the region while becoming a world political
\npower.<\/p>\n
The initiative of EAEC fits well with Japan's own long time
\ndream in regard to its long-term Asia-Pacific economic strategy.
\nIn fact, the idea of EAEC and also ARF (the ASEAN Regional Forum)
\nwas essentially first initiated by Japan. Japan has been uneasy
\nabout the U.S.'s attempt to dominate APEC and has hoped to curb
\nsuch attempts by forging closer economic arrangements with ASEAN.
\nIt is the Japanese nature to always be in a position of
\nuncertainty and not to show a firm stance on certain issues.<\/p>\n
Ironically, due to the U.S. boycott of EAEC, which again
\nconfirms the character of uncertainty of Japan, Japan has, until
\ntoday, not formally endorsed EAEC, although there appears to be
\nsignificant unofficial Japanese sympathy and support for the
\nidea. Malaysia is very disappointed by Japan's lack of courage in
\ndefying Washington's opposition to EAEC.<\/p>\n
What are the future prospects of EAEC? At a conference
\norganized by the Japan Institute of International Affairs (JIIA)
\nin Tokyo in April 1997, Prof. Michael Leifer, an analyst on
\nASEAN, from the London School of Economics said that he could not
\nsee any prospect for EAEC. And yet, the issue of EAEC is
\nofficially coming to the fore again.<\/p>\n
And at the informal ASEAN summit to be held in Kuala Lumpur on
\nDec. 14 this year, China, Japan and South Korea, a de facto
\ncollection of the EAEC membership, will be invited. The issue
\nseems to be significant, at least until the end of this year.<\/p>\n
After this, the pursuance of the issue will depend on the
\ninterest of the new secretary-general, Rodolfo C. Severino, who
\nwill replace Dato' Ajit Singh at the end of the year. He
\ncurrently serves as Undersecretary of Policy for Foreign Affairs
\nof the Philippines.<\/p>\n
Malaysia turns 40 and faces "mid-life pains" (this term quoted
\nfrom Reuter) as the result of multi-faceted problems in
\ndimensions beyond those anyone could have imagined. The financial
\nturmoil that has struck some ASEAN countries recently has seen
\nthe ringgit nosedive. Stocks are not faring much better, while
\nsome investment analysts, foreigners and locals alike, are of the
\nopinion that the economy is overheating.<\/p>\n
In Mahathir's speech celebrating the nation's 40 years of
\nindependence, he said turmoil on the stock and currency markets
\nhad cut the country's per capita income to US$4,200 from $4,600.
\nIn the aftermath of the regional currency crisis which brought
\nthe ringgit to its lowest level against the dollar since it was
\nofficially floated in 1973 and share prices on the Kuala Lumpur
\nStock Exchange (KLSE) to four-year lows, deep in its heart,
\nMalaysia might still hope that EAEC could be the mechanism to
\nfortify the economic strength of its member countries.<\/p>\n
In hoping for EAEC to become a reality, Malaysia might
\nconfidently impress on other nations that the caucus could be a
\nsignificant instrument for member countries to cooperate and help
\neach other in economic difficulties, and also prevent outsiders
\nsuch as U.S. fund manager George Soros from systematically
\nattempting to destroy Malaysia and other successful ASEAN
\neconomies for political reasons. Being part of ASEAN, new member
\ncountries like Vietnam, Laos and Myanmar would definitely like to
\nsee the caucus directly and indirectly helping to overcome their
\neconomic difficulties.<\/p>\n
Dr. Paridah Abd. Samad, is a senior lecturer at ITM Shah Alam,
\nMalaysia and was previously visiting research fellow at the Japan
\nInstitute of International Affairs (JIIA), Tokyo, Japan.<\/p>",
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