Dream of East poses nightmare for West

WILL the United States' rejection of the East Asia Economic Caucus (EAEC), mooted by Malaysia, cause the caucus to die a natural death, or will it instead rip apart the Asia-Pacific Economic Co-operation (APEC)? Since Malaysian Prime Minister Mahathir Mohamad mooted EAEC in 1990, it has been a hard slog getting all the countries of East Asia to embrace the concept without reservations. Fear of antagonising the US, especially on the part of South Korea and Japan, has been the main stumbling block to EAEC's launch. And the problem does not end there. China, while being supportive, also opposes the inclusion of Taiwan and Hong Kong in the initial phase of EAEC, but has left the door open for their future participation. EAEC is envisaged as including the six members of the Association of Southeast Asian Nations (ASEAN) - Singapore, Malaysia, Indonesia, Brunei, the Philippines and Thailand - plus Japan, South Korea, China, Taiwan and Hong Kong. All are members of APEC, which also includes the US, Canada, Australia, Mexico and Papua New Guinea. Washington had expressed misgivings about EAEC on the grounds that the caucus could evolve into an exclusivist trading bloc but, until last month, stopped short of opposing it unequivocally. Several questions arise from Washington's rejection. Firstly, what are the ramifications for APEC? In announcing its EAEC stance, Washington indicated that the caucus, if launched, could have a negative effect on APEC. Secondly, how will the unity of ASEAN be affected? And lastly, will EAEC ever see the light of day? As ASEAN is a vital component of APEC, the EAEC issue is likely to cause some difficulties in APEC, at a time when the forum appears to be gathering momentum for its second summit in Jakarta in November. This is because ASEAN members already form the core of the caucus. It remains to be seen whether the US will test ASEAN's solidarity by inviting members like Thailand and Singapore to join the North American Free Trade Agreement (NAFTA) in an attempt to divide and rule. The US rejection is not all gloom, however. Rather, it is an affirmation of the potential of the caucus to marshal East Asian geo-economic forces - and the US, through its rejection, has unwittingly lent credence to such a view. EAEC potential should not be underestimated, even though Mr Mahathir has assured time and again that the caucus is merely a loose consultative forum, and is not a threat to anyone. At the Asia Society conference - called Asia and the Changing World Order - in Tokyo last May, Mr Mahathir said: ''In proposing the EAEC we are not proposing a closed, inward-looking trading bloc for East Asia; we are not even proposing any kind of trading bloc for East Asia. ''We are not advocating a preferential trading arrangement or a free trade area or a customs union or a common market or an economic union for East Asia.'' But who is to say that once launched - even within APEC - EAEC would not metamorphose into a more potent grouping, should the West force East Asia's hand or should APEC fail to deliver the goods? EAEC's launch, no matter what the modality, would formalise the region's identity and give it a framework to encompass a given number of countries defined by common interests and concerns. More importantly, the caucus would give focus to East Asia's economic ascendancy within and outside the region. This would certainly be better than the region's status quo: a mere geographical label. Seen in this context, an agglomeration of economically dynamic performers, however loosely constituted, could easily make the West uncomfortable. In other words, Washington recognises the EAEC's intrinsic merits. The potential for East Asian countries to flex their muscles grows stronger by the day. Take their economic resilience - while the West was mired in recession in 1992-93, East Asian countries, with the exception of Japan, were forging ahead, thanks to robust intra-regional trade. And last year, Japan's trade with Southeast Asia for the first time proved more lucrative than its trade with the US. The bulk of this surplus came from trade with the newly industrialised economies of South Korea, Taiwan, Singapore and Hong Kong. Another notable trend is the strength of intra-regional investment. This shows that a growing web of East Asian economic linkages is emerging. In the light of this economic fission, EAEC could provide the vehicle for the dove-tailing of common interests. And flowing from economic success is a new mood of confidence, described as a ''psychological shift'', which has made Asia more self-assured. Noordin Sopiee, director-general of Malaysia's Institute for Strategic and International Studies, has summed up this new chapter in East Asian history. ''For the first time in 500 years, we are standing up for ourselves. It is a revolution,'' Mr Noordin told the Asia Society conference - called Future Waves: ASEAN, Vietnam and China - in Singapore in May. Singaporean Prime Minister Goh Chok Tong told the conference that ''Asia's time has come'' and that it was catching up with the West. He warned that an economically powerful Asia which was not integrated with the rest of the world would be ''sullen and ready to challenge the West''. But for all of East Asia's progress, there is no framework to shape the collective dynamism into a productive force to give the region greater leverage in decisions affecting it. Neither is it able to speak with one voice. Following the US rejection, Mr Mahathir said EAEC's raison d'etre was to give strength to small countries like Malaysia during negotiations with other countries, or groups of countries, such as the European Union (EU). More frankly, he said Washington's opposition smacked of racism. That outburst clearly indicates how Malaysia views the matter - as an attempt to keep up-and-coming East Asians from achieving unity of purpose, and thereby posing a more solid challenge to the West. The nub of the argument is that if the West can have its NAFTA and its EU, why can't East Asia have its EAEC? On one of his EAEC selling missions this year, Mr Mahathir told a gathering of Philippine legislators: ''We [East Asian nations] are all very weak and, if we do not work together, we are going to be overwhelmed by the north [of Asia].'' So far, the reactions of the West to an increasingly assertive East show that Mr Mahathir may not be too wide of the mark. If putting down East Asia is the name of the game in the West, then his EAEC crusade will strike a chord with not a few in the region. As long as the West does not accept the East as equal partners in progress - and there is evidence that Europeans and Americans are finding this concept hard to swallow - then the allure of EAEC as a geo-economic vision is here to stay. As Mr Goh says, an Asian trade bloc is not an option of choice, but a viable option. The EAEC spectre is proving to be more than ephemeral.