TOKYO: Prime Minister Tun Dr Mahathir Mohamad has proposed that the East Asia Economic Caucus (EAEC) be revived in the face of growing trade protectionism.
The EAEC is a regional free trade zone (FTA) first proposed in 1997 by Dr Mahathir, and encompasses the Association of Southeast Asian Nations (Asean) member states, China, Japan, and the Republic of Korea.
"I am still in favour of the EAEC. We should consider it seriously, but also include India and some central Asian countries," he said during a dialogue session at the 2018 Nikkei Conference here today.
The EAEC failed to take off when first proposed due to opposition by the US and exclusion of Western nations, which were already members of APEC and other regional organisations in East Asia.
"But now the US itself is more isolationist, so they are not in a position to oppose the EAEC," Dr Mahathir added.
At the just concluded G7 Summit in Canada, the US faced off against other industrialised economies over its trade tariffs to protect American industries. Some have threatened retaliatory measures.
Dr Mahathir said although many countries pay lip service to free trade, in reality most of them have some form of trade restrictions.
This is partly why he has called for a review of the revised Trans-Pacific Partnership (TPP) trade deal.
"Countries with different capacities to compete must be given certain flexibilities and protection for their weaknesses," he said.
“It is like playing golf, you need a handicap. The weakest players will get the largest handicaps so in that way the competition will be much fairer,” he said.
“It is the same with trade.”
Dr Mahathir said while small countries should be protected, it is not justified for developed countries like the US to indulge in protected trade.
"Today the world has become more separated than ever. In East Asia we do not yet have a grouping of like-minded countries," he said.