EAEC initiative lacks clear future

EAEC initiative lacks clear future

By Takehiko Kajita

TOKYO (Kyodo): Despite nearly five years of warming up exercises, the East Asia Economic Caucus (EAEC) proposed by Malaysian Prime Minister Mahathir Mohamad shows no sign of getting up and running any time soon.

Japan, fearful of antagonizing the United States, which opposes the EAEC, has been cautious about the project, refusing to clearly state whether or not it will join the planned regional body.

All Tokyo is saying is it will continue to consider the proposal. But one government official said, "I don't think anyone at any government ministry or agency is studying the matter."

"We think the EAEC is good for Japan," Malaysian Ambassador to Japan H.M. Khatib said in an interview. "But Japan does not think so."

Mahathir first floated the idea of establishing the EAEC in December 1990. The Association of Southeast Asian Nations (ASEAN) made it a joint proposal in October 1991.

The U.S. has vehemently opposed the initiative as carrying the danger of forming a trade bloc that would exclude the U.S. and other Pacific Rim nations outside East Asia.

The EAEC would include China, Japan and South Korea, as well as the seven ASEAN members of Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

"America is not Asia. The caucus is East Asia, so naturally does not include America," Khatib said.

Kuala Lumpur is also critical of Tokyo's foot-dragging on whether to join the proposed body, prompting Mahathir to threaten until only recently to boycott the informal summit of the Asia- Pacific Economic Cooperation (APEC) forum in Osaka on Nov. 19.

Malaysia's cabinet decided last week that Mahathir will attend the APEC gathering, after Japanese Prime Minister Tomiichi Murayama had sent a special emissary to Kuala Lumpur to urge the Malaysian leader to come to Osaka.

Rafidah Aziz, Malaysia's international trade and industry minister, has said Mahathir might broach the EAEC issue at the APEC summit, a move that would severely test Murayama's chairmanship at the parley.

In addition to the U.S. opposition and the Japanese reluctance, ASEAN is not necessarily monolithic, either. At their annual gathering in July, ASEAN foreign ministers reaffirmed their commitment to an early launching of the EAEC but came up with no specifics.

"ASEAN cannot let the project die but does not feel like making a fuss about it, either," foreign policy analyst Takaaki Sasaki said.

He said ASEAN wants to retain the program in case the North American Free Trade Agreement (NAFTA) and the European Union make moves toward the formation of inward-looking trade alliances.

Jiro Okamoto, an analyst at the Institute of Developing Economies, a Japanese government-affiliated think tank, said the EAEC initiative will not take shape in the immediate future.

"The scheme cropped up as a countermeasure against a U.S. offensive. The momentum for it has been weakened, because their rival is quiet now," Okamoto said of the U.S. toning down of what he called its aggressive approach toward East Asia of selective expansion of the North American free trade zone into the region.

Instead, the U.S. has been eager to pursue its economic interests within the framework of the 18-member APEC, which decided last year to set deadlines for free trade in the region -- 2010 for industrialized economies and 2020 for less-developed economies.

Masaru Yoshitomi, vice chairman of the Research Institute of the Long-Term Credit Bank of Japan, realizes the need for a "non- NAFTA" grouping under the broad rubric of APEC, through which Japan could negotiate sticky trade issues more on a multilateral basis.

Many Japanese pundits say the EAEC could start with Japan as a member if Australia and New Zealand were also invited to join.

"Japan appears to have unofficially decided to call for the inclusion of Australia and New Zealand" as a prerequisite for its participation in the proposed caucus, said Yuichiro Nagatomi, director general of the Quick Research Institute, a private think tank.

Tokyo took a step in the right direction when it signaled its refusal to attend the aborted economic ministerial meeting in April with ASEAN, China and South Korea, unless Australia and New Zealand took part as well, he said.