'EAEC phobia' affects some countries, KL says

'EAEC phobia' affects some countries, KL says

KUALA LUMPUR (Reuter): Malaysian Trade and Industry Minister
Rafidah Aziz said yesterday some countries have "unfathomable"
fears of an Asian economic caucus and are trying to block its
formation.

"Some countries seem to have developed an EAEC (East Asian
Economic Caucus)-phobia, for reasons quite unfathomable, and have
tried very hard to stall the realization of the proposal,
although it has now received ASEAN (Association of Southeast
Asian Nations) consensus," Rafidah said in Kuala Lumpur.
ASEAN groups Malaysia, Singapore, Indonesia, Thailand, Brunei and
the Philippines.

Rafidah, repeating Malaysia's defense of an idea it first
proposed, said the EAEC was not meant to be a trade bloc and its
formation would enhance regional and international trade.

"Malaysia believes in open regionalism and the proposal to
establish an EAEC is with the objective of synergizing the
collective strengths of the East Asian economies," she said at a
tax conference.

Malaysian Prime Minister Mahathir Mohamad proposed the caucus
in 1990 as a regional trade grouping to rival the existing Asia-
Pacific Economic Cooperation (APEC) forum that links countries in
the Pacific Rim and the United States and to counterweight trade
blocs in Europe and North America.

The EAEC idea, which excludes the United States, Australia and
New Zealand, has been slow getting off the ground due largely to
Japan's reluctance to be part of the grouping for fear of
offending the United States, which opposes the plan.

Rafidah said regional groupings "constitute building blocks to
multilateralism" and create trade.

The World Trade Organization (WTO) said yesterday that the
growing number of regional trading groups would not turn into
isolationist blocs undermining progress to world-wide free trade.
A report by analysts in the WTO secretariat said there was no
sign any of the 108 customs unions and free-trade areas set up
since World War Two posed a threat to the multilateral system of
trade rules the new body was created to administer.

Rafidah said developing countries had to be given "due
recognition" in the formulating of rules for international trade.
She said according to General Agreement on Trade and Tariffs
statistics, developing countries' share of total world
merchandise exports amounted to $1.85 trillion, representing
about 45.6 percent of total global exports, and they absorbed
$1.79 trillion, or 42.7 percent of total global imports.