The East Asia Economic Caucus (EAEC) or East Asia Economic Group (EAEG) was a regional
free trade zone (FTA) proposed in 1997 by Malaysian Prime Minister
Mahathir Mohamad
Mahathir bin Mohamad ( ms, محاضير بن محمد, label= Jawi, script=arab, italic=unset; ; born 10 July 1925) is a Malaysian politician, author, and physician who served as the 4th and 7th Prime Minister of Malaysia. He held the office ...
and encompasses most nations of
East and
Southeast Asia
Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical United Nations geoscheme for Asia#South-eastern Asia, south-eastern region of Asia, consistin ...
(ESEA). However, Japan at the time refused participation due to the exclusion of the United States, which at the time had tariffs on each other, has an economy too deeply interlinked through trade, and was still reeling from the effects of the
Japanese asset price bubble
The was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and Japan's economy stagnated. The bubble was characterized by rapid acceleration ...
. They also added that they were already members of the
Asia-Pacific Economic Cooperation
The Asia-Pacific Economic Cooperation (APEC ) is an inter-governmental forum for 21 member economy, economies in the Pacific Rim that promotes free trade throughout the Asia-Pacific region. (APEC) and many other notable regional organizations in ESEA. South Korea was also extremely dissatisfied with the idea of placing Japan at the center of the proposed organization due to historical connotations.
The EAEC was a reaction to
ASEAN
ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, militar ...
's integration into APEC by Mahathir, who is known for his
strong Pan-Asian standpoint. His suggestion apparently articulated his dissatisfaction with ASEAN joining APEC, which includes Western nations, an idea he was strongly opposed to. Therefore, EAEC was basically an APEC without Northern America and Oceania. Nevertheless, it was never put into action officially.
When
ASEAN+3
ASEAN ( , ), officially the Association of Southeast Asian Nations, is a Political union, political and economic union of 10 member Sovereign state, states in Southeast Asia, which promotes intergovernmental organization, intergovernmental coo ...
was institutionalized in 1999, it was considered the successor of EAEC, which prompted Malaysia to declare that the EAEC has nevertheless still been realized. In 2005, with Japan's support of the ASEAN+3 agreement, the it was agreed in return to include Australia, New Zealand, and India into the
East Asia Summit
The East Asia Summit (EAS) is a regional forum held annually by leaders of, initially, 16 countries in the East Asian, Southeast Asian, South Asian and Oceanian regions, based on the Association of Southeast Asian Nations#ASEAN Plus Three and A ...
, a separate organization.
More recently, the
Regional Comprehensive Economic Partnership (RCEP) has also been considered identical to the EAEC, except this time with the inclusion of Australia and New Zealand. The RCEP is the first free trade agreement which included China, Indonesia, Japan, and South Korea together, four of the five largest
economies in ESEA.
The partnership is notable over the absence of the United States. Several analysts have predicted that the RCEP has the potential to leave the U.S. behind in economic and political affairs within the next few decades especially in the
Asia-Pacific
Asia-Pacific (APAC) is the part of the world near the western Pacific Ocean. The Asia-Pacific region varies in area depending on context, but it generally includes East Asia, Russian Far East, South Asia, Southeast Asia, Australia and Pacific Isla ...
.
Origin
When the
Uruguay Round of discussions to create more liberalized world trade was aborted in autumn 1997, the Malaysian Prime Minister Mahathir Mohammad attempted to create such a trade union in ESEA which was a much debated approach to institutionalizing regional ESEA structures.
Reactions
The Western-critical speech by Mahathir without consultations with his colleagues in other states resulted in some apprehension by some Asian countries from this idea. Japan especially, felt compromised by this due to its geopolitical situation. Mahathir tried to support the idea by stressing that the EAEC conforms with the
General Agreement on Tariffs and Trade
The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas. According to its pre ...
(GATT), but this step also brought hardly any results. The exclusion of
Oceania
Oceania (, , ) is a region, geographical region that includes Australasia, Melanesia, Micronesia, and Polynesia. Spanning the Eastern Hemisphere, Eastern and Western Hemisphere, Western hemispheres, Oceania is estimated to have a land area of ...
was also found especially unfitting. Japan could not go along with this, not at least during the beginning of the 1990s, as it was re-orienting itself after the complete collapse of the
Eastern Bloc
The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed du ...
amid the
Revolutions of 1989
The Revolutions of 1989, also known as the Fall of Communism, was a revolutionary wave that resulted in the end of most communist states in the world. Sometimes this revolutionary wave is also called the Fall of Nations or the Autumn of Natio ...
and the end of the
Cold War
The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
.
Perspectives
As a result, the original concept of EAEC was very difficult to implement. Besides these difficulties, Mahathir's concept committed Japan to be the leading power. However, Japan could not afford such a perspective at the time, as it was closely allied to the United States since its defeat in
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
five decades prior, and as a result has an economy deeply linked through trade ever since.
South Korea
South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
was also extremely dissatisfied with Japan being placed at the center of the proposed organization due to the historical connotations of Japan ruling over Korean economic affairs, and would not support the possibility of Japanese economic hegemony in the region.
Countries intended to be involved
The countries that were supposed to compose the East Asia Economic Caucus were:
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See also
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East Asia Summit
The East Asia Summit (EAS) is a regional forum held annually by leaders of, initially, 16 countries in the East Asian, Southeast Asian, South Asian and Oceanian regions, based on the Association of Southeast Asian Nations#ASEAN Plus Three and A ...
*
East Asian Community The East Asian Community (EAC) is a proposed trade bloc for the East and Southeast Asian (ESEA) countries that may arise out of either ASEAN Plus Three or the East Asia Summit (EAS).
Economy
History
Prior to the EAS
The Association of Southe ...
*
Regional Comprehensive Economic Partnership
References
Further reading
* N Ganesan: Bi-Lateral Tensions in Post-Cold War ASEAN, Singapore: Institute of Southeast Asian Studies, 1999.
External links
Asiaweek.com "ASEAN+3=EAEC"{{portalbar, Asia
Organizations associated with ASEAN
East Asia
Southeast Asia
Economy of East Asia
Economy of Southeast Asia