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EAEC will not split

Apec, says Mahathir

KUALA LUMPUR: Malaysian Prime Minister Mahathir Mohammad defended on Monday his proposal for a caucus among East Asian nations, saying it would not split the Asia-Pacific Economic Cooperation (Apec) forum.

Drawing a parallel with the North American Free Trade Agreement (Nafta) encompassing the United States, Canada and Mexico, Mahathir said the East Asia Economic Caucus (EAEC) would also be a grouping within Apec.

"Hence, there is nothing to fear from the EAEC," Mahathir said as he opened an Asia-Pacific management consultants conference here. "EAEC is intended to promote open regionalism and will be transparent."

The EAEC, first mooted by Mahathir in December 1990, has already been accepted as an initiative by the Association of Southeast Asian Nations (Asean), which groups Brunei, Indonesia, the Philippines, Malaysia, Singapore, Thailand and newcomer Vietnam.

But the EAEC proposal, meant to be a consultative forum grouping Japan, South Korea, China, Hong Kong and Asean as its core members, has not taken off mainly due to indecision in Tokyo about membership.

It has also met stiff opposition from Washington, which sees it as a budding trade block.

Japan, the US and Asean are all members of the 18-member Apec.

Japanese Foreign Minister Yohei Kono, after talks with Asean foreign ministers in Brunei earlier this month, said Tokyo wanted the consensus of the Apec forum before making a decision on joining the EAEC.

"There is nothing to fear from the EAEC. It is intended to promote open regionalism and will be transparent," said Mahathir on Monday.

"Open regionalism will not result in trade blocs. The Asean proposal for the EAEC should be viewed positively. EAEC is not exclusionist," said Mahathir, who recently slammed Japan for finding fresh "excuses" to stall its formation and claiming it was bowing to pressure from the United States.

Malaysian International Trade and Industry Minister Rafidah Aziz, speaking at the same conference, said open regionalism could boost liberalisation processes and ensure greater trade and investment.

She said the potential for developing further trade and investment in Asia-Pacific was immense because the region had large and established markets as well as emerging markets.

The Asia-Pacific region accounts for almost half of global exports last year and enjoyed the world's highest export growth, Rafidah said.-AFP