Mahathir can't get Japan to say yes

Heng Pek Koon delves into the reasons why Tokyo has been resistant to the East Asian Economic Caucus concept.

Datuk Seri Dr. Mahathir Mohamad is no stranger to controversy. His assertion that Japanese membership in the East Asian Economic Caucus (EAEC) is far better than every prime minister going around saying, "I am sorry", is certainly an unorthodox and provocative approach to the subject of Japan's apologies for its wartime behavior. So too are his feisty criticisms of U.S. moralizing about democracy and human rights when America's own record is deeply flawed. At a conference in Tokyo held on May 19, 1995, Mahathir enumerated the many failings of Western liberal democracy: high crime rates and violence, lack of discipline, decaying morals and the proliferation of deviant cults such as those led by David Koresh and Jim Jones.

He has also suggested that U.S. policies show lack of sympathy towards Muslims. Why, he asked, is the U.S. prepared to countenance Serbian ethnic cleansing of Muslims in Bosnia- Herzegovina when it so quickly taught Saddam Hussein a lesson? And he has described the Western proposal for a worldwide minimum wage as an ill-disguised attempt to neutralize the role of comparative advantage (that is, cheap labor) enjoyed in the industrialization game by latecomers such as Malaysia.

Mahathir's latest cause celebre, the concept of an East Asian Economic Caucus--a broad proposal for East Asian economic co- operation under Japanese leadership--has served to highlight his ideological estrangement from U.S. visions of regional free trade within the institutionalized framework of the Asia-Pacific Economic Cooperation (APEC) grouping. In December 1990, Mahathir argued that, with the post-Cold War period heralding the arrival of regional trade blocs--the European Union (EU) and the North American Free Trade Agreement (NAFTA)--East Asians should also form their own economic grouping.

In comments in the Daily Yomiuri, on April 7, Mahathir described the EAEC as "a simple forum dedicated to protecting and promoting free, unmanaged regional and international trade". The forum would work, he stated, to accelerate economic growth within the ASEAN states as well as Japan, China and South Korea. He emphasized that the forum would not be a trade bloc or customs union like the EU and NAFTA, since member countries would be free to extend the privileges of membership to any other country outside the grouping. He also explained that the EAEC would not be a formally structured organization. There would be no annual summits; discussions would be held at the level of economic ministers; and decisions would not be binding to members.

Mahathir believes that the participation of Japan, the only fully industrialized East Asian country and economic hegemony in the region, is essential to the success of the EAEC. On the face of it, the package he serves up to Japan must be one of the most attractive offers to come that country's way since the U.S. agreed to take care of its security worries after the end of World War II.

In his assiduous courtship of Japan, Mahathir has appealed primarily to Japanese economic interests, a judicious strategy in view of the fact that Japan's trade with East Asia now exceeds that of with the U.S. He has also struck chords that resonate with Japanese nationalist sentiments: "We are asking you to be a leader in the region...to be first among equals." At the same time, he has sought to soothe the conscience of leaders troubled by their country's wartime behavior: "The EAEC is not the Greater East Asia Co-prosperity Sphere that you promoted during the Second World War. It is not your invention. We would not propose it if we think you are going to dominate us."

Mahathir finally suggested that an effective way for Japan to resolve the current war apology resolution impasse in the Diet is for the country to join the EAEC, since, simply by so doing, it will have paid its debt to East Asia. However cleverly ingenuous Mahathir may be in pushing this line of argument, absolving Japan of any need to acknowledge wartime depredations is unlikely to enjoy great popularity with other Asian countries that endured the Japanese occupation.

While several Japanese political and business leaders have publicly lent support to the EAEC, and some government officials have privately indicated their agreement, there has been no official endorsement to date. Japanese equivocation appears to stem from four major considerations: deference to U.S. objections to the proposal; a desire to stay focused on APEC; realization that, contrary to Asean public endorsement, some members still harbor serious reservations in private; and Japan's own reluctance to assume the responsibilities that come with any mantle of formal leadership in the EAEC.

The U.S. opposes the EAEC, seeing it as an Asian-only club that would obstruct broader regional co-operation in the Asia- Pacific region. By excluding the U.S., Canada, Australia and New Zealand, Mahathir's EAEC draws a line down the Pacific, dividing it on racial/cultural grounds into Japanese and U.S. spheres of influence. Not surprisingly, the U.S. is less than pleased with being relegated to the less economically dynamic side of the equation. The fast-growing importance of East Asia to the U.S. economy is demonstrated by bigger increases in recent years in U.S. trade flows across the Pacific than those across the Atlantic.

The U.S. sees APEC as the most appropriate post-Cold War multilateral organization for staying engaged economically, as well as politically, in the Asia-Pacific. At the APEC 1993 Seattle and 1994 Bogor forums, President Bill Clinton actively sought to establish specific targets for achieving full economic liberalization and harmonization by 2020. U.S. officials are looking toward the up-coming Osaka forum as an important milestone in reaching more specific agreement on these points. However, full consensus on the matter is still lacking.

Mahathir himself has been the most outspoken critic of U.S. moves to transform what began as a loosely organized forum in 1989 into a formal institution with powers to make decisions binding upon members. He underscored his objections by not showing up for the Seattle forum; his attendance at the Bogor forum was more a gesture of courtesy to Indonesian President Soeharto, who hosted the meeting, than any change of mind on the U.S. position. It is doubtful that he will attend the Osaka forum.

Although Japanese-US relations are undergoing an unprecedented tense phase caused by seemingly irreconcilable differences arising from Japan's US$65 billion trade surplus with the U.S., both sides are committed to keeping their relationship on an even keel. The two governments have pledged not to let economic differences such as the current dispute over cars and car parts undermine a partnership that remains in good shape in other areas. While some may argue that trade tensions and frustration with the U.S. may eventually result in Japan forsaking the U.S. and embracing East Asia, Japan's failure to respond to Mahathir's overtures suggests the contrary: that it is not prepared to jeopardize what it still regards as its most important bilateral relationship by joining the EAEC over U.S. objections.

Mahathir says he is not asking Japan to choose between APEC or the EAEC; he merely wants Japanese participation in both groupings. The prevailing wisdom within Japanese official circles is that the price of EAEC membership is too high, at least in present circumstances where efforts are needed to place APEC on a more solid footing. While Japan is not in entire agreement with the U.S.-endorsed road map for trade liberalization adopted at Bogor, Tokyo clearly attaches as much importance as Washington does to APEC as the key to successful Asia-Pacific multilateral cooperation in the 21st century.

For a while it appeared that the EAEC was getting serious backing from powerful Japanese business and political leaders. At a seminar organized by the Japan-Malaysian Friendship Society on Jan. 17, 1995, the concept received the ringing endorsement of Keidanren and Liberal Democratic Party participants, including the female legislator Seiko Noda, who chastised Ministry of Foreign Affairs bureaucrats for lacking the spine to stand up to the U.S.

However, in April, the Japanese government braved Malaysia's displeasure by refusing to attend an informal Asean economic ministers meeting in Phuket unless Australia and New Zealand were also included together with the two other invited guests, China and Korea. The absence from the EAEC concept of those two "white" regional states that have so clearly cast their lot with Asia has from the beginning been its Achilles heel. Although Mahathir has at times appeared attracted to the idea of a "non-NAFTA" membership in the EAEC that would include Australia and New Zealand, such a compromise would, in his eyes, rob the EAEC of the essential "Asianness" that sets it apart from the unsympathetic, uncomprehending and arrogant Western powers.

Clearly, any further moves to re-energize the EAEC initiative in Japan would depend on such solid institutionalization of APEC that the U.S. would no longer fear the EAEC as a competing structure, and unequivocal support for the EAEC concept, not only from Asean but also from China and Korea. The latter two countries would no doubt be wary of any regional grouping that seeks to establish Japan as "first among equals".

Dr. Heng Pek Koon is with the Institute for Pacific Rim Studies, Temple University, Japan.