Mahathir can't get Japan to say yes

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.