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.