Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : SEOUL, SOUTH KOREA
Tarikh/Date : 24/05/93
Tajuk/Title : THE LEADERS FORUM OF THE 26TH
INTERNATIONAL GENERAL MEETING OF
THE PACIFIC BASIN ECONOMIC COUNCIL
Excellencies;
Ladies and gentlemen,
Let me begin by thanking the Pacific Basin Economic
Council and the Korea PBEC Committee for giving me this
opportunity to be with you today.
2. Politicians very often have an over-inflated view of
what they are and what they do. After many years in
government, I know for a fact that you and your colleagues
throughout the Pacific Basin have been the primary engineers
and builders of the Pacific prosperity that we are seeing
today.
3. You and your colleagues of the private sector, not
those who strut the stage of world politics, will also be
the primary engineers and builders of the Pacific prosperity
of the future. However even the politicians know that for
this Pacific prosperity to be guaranteed, the Pacific must
always remain open.
Ladies and gentlemen,
4. Unless we shoot ourselves in the foot, our Pacific
economy will be substantially more than two and a half times
the size of western Europe by the year 2020. This will not
mean that much if the Pacific is divided into closed blocs.
Therefore it is crucially important to ensure an open
Pacific -- and for that matter, an open East Asia.
5. Before I argue about the necessity to fight for open
regionalism, not only in our part of the world but also in
every part of the world, allow me to outline some basic
facts.
6. First, the premise of the theme of this meeting is
absolutely correct. Our objective must be globalism. In
the context of trade, open globalism must be the first and
the best choice. The entire world should be a single
marketplace, a single trading bloc, with as few obstacles
and distortions as possible to the freest exchange of goods
and services. Free trade, like democracy, is full of
imperfections. But free trade, like democracy, is by far
the best model. Free trade will ensure the greatest
economic good for the greatest number of people.
7. The message of the marketplace is being preached to the
emerging market economies in every corner of the globe.
Market economies makes sense within the domestic economic
system. Market economies makes sense also within the global
economic system. The command economy makes nonsense within
the domestic economic system. The command economy also
makes nonsense within the global economic system. It would
be a great travesty if we preach the virtues of open
competition and the open marketplace and then act to ensure
trade on the basis of closed markets and political commands
and managed trade.
8. A second fundamental reality: even as we recognise that
regional trading blocs can at the most only be the second
best option, we all have to accept the fact that whether we
like it or not, economic regionalism is not going to go
away. Indeed, the tide of economic and especially trade
regionalism will advance, not retreat.
9. In the post-war period, more than 55 regional markets
or trade arrangements have been submitted to the GATT for
its notice and examination. In every area of the world, a
regional trading arrangement or bloc has been attempted or
is very much already in place. The only major area in the
entire world where it has never been seriously tried is
Northeast Asia.
10. All the members of APEC (except for those in Northeast
Asia) are already involved in one trading bloc or more: the
United States in the United States-Israel Pact, the
Caribbean Basin Initiative, the United States-Canada Free
Trade Agreement (and now NAFTA), all of which do not include
the APEC economies outside northern America. Canada is
involved in the last two.
11. Australia and New Zealand in fact pioneered the trade
bloc business in the Pacific. As long ago as 1965, they
signed the 'New Zealand-Australia Free Trade Agreement'.
These two economies upgraded their 'NAFTA' into a more
effective 'Australia-New Zealand Closer Economic Relations
Trade Agreement' or 'ANZCERTA' in 1983. Both countries are
also the mainstay of the South Pacific Forum. Again, both
ANZCERTA and the South Pacific Forum do not include APEC
members outside Australasia or the South Pacific, although
no one accused these countries of trying to be exclusive.
12. In the western Pacific, the Association of Southeast
Asian Nations (ASEAN) started life as a loose consultative
forum in 1967. However from January this year, it phased in
AFTA, the 'Asean Free Trade Area', a process intended to
create a virually free trade area over a wide range of goods
by the year 2008. Again, no APEC member outside Southeast
Asia is a member of ASEAN, although ASEAN already has a
loose consultative forum -- called 'the PMC process' which
involves the United States, Australia, New Zealand, Canada,
South Korea and Japan (and China and Russia as guests) --
long before APEC was formed.
Ladies and gentlemen,
13. Trade blocs are by definition groupings which have a
common set of market access conditions among member
economies which are not accorded to those outside the
'bloc'. Given that trade blocs are not going to go away and
look set to proliferate, I believe that what global
statesmanship must ensure is that as many trade blocs as
possible will be as open as possible and will contribute to
global liberation rather than global protectionism. We must
fight for 'open regionalism'.
14. No doubt, we are all going to have a great time
discussing and disagreeing about the meaning of 'open
regionalism'. Your sister institution, the Pacific Economic
Cooperation Council (PECC) last year adopted the San
Francisco Declaration on Open Regionalism. PECC has pledged
to become a movement for 'open regionalism'. The theme of
this very PBEC meeting is 'open regionalism'. Now all we
have to do is agree on what 'open regionalism' means.
15. In my view, there is open regionalism if the
participants in a regional enterprise:
(1) go into it with the purpose of liberalising the
conditions for economic intercourse between its
members,
(2) if they launch the regional enterprise without
desiring to raise drawbridges and to man the
battlements, and
(3) if they have the intent of reducing the barriers
to economies outside the region.
16. This is no doubt a rigorous test. Most of the 55
postwar trade regionalism schemes I have mentioned fail the
test because most may have passed the first condition, many
may have passed the second but almost all failed the third.
'Project 1992', the creation of a full economic union by the
European Community, certainly did not have the intention of
reducing the barriers to economies outside the European
Community.
17. For any regional enterprise to be an example of open
regionalism, therefore, I believe it is necessary for the
involved parties to have the intent of opening up their
region to the outside world. This may not be the primary
intent. But the intent must be there.
18. To qualify as open regionalism, in my view, it is even
more important to pass the test of result or outcome.
Open regionalism exists in fact only if:
(1) there is actual internal trade liberalisation, and
if
(2) the barriers to outside economies are actually
reduced.
Intent without outcome is not sufficient.
19. If any regional enterprise fulfils these requirements,
there is no need for the question mark behind your question:
'Open Regionalism -- a New Basis for Globalism'? Open
regionalism will indeed be a great contributor to the open
global trading system that we want and that we must all
fight for.
20. We have had more than 20 years of creeping
protectionism. President Clinton has himself stated that
whilst the developing countries have been reducing their
protective walls, 20 out of the 24 countries of the OECD
have been raising protective barriers. Voluntary export
restraints are now negotiated as a matter of course. Trade
sanctions are openly talked about between countries which
call themselves friends. Politicians can without shame ask
other nations to buy so much of this and that else.
Respected economists can come out and advocate managed trade
as a legitimate way for the conduct of future world trade.
Increasingly, health, the environment and even human rights
are part of the trade armory of nations. And in so many
areas, leaders talk of open regionalism when what they want
is to man the barricades, to keep others out.
21. The old champions and makers of the multilateral, open
global trading system are no longer there. The world needs
new champions and makers of such a free trading system.
This is one central reason why Malaysia advocates the
formation of an East Asian grouping, or EAEC -- so that we
can be a coalition, building the necessary regional organ to
strive for the success of the Uruguay Round and for the type
of open global trading system that we have had since
Bretton Woods. This open global trading system has allowed
us to become what we are today. On this open global trading
system much of our future depends.
22. For us in East Asia, this is truly a matter of life and
death. Yet, we are mere bystanders as our friends cynically
quarrel over what seems to be literally peanuts. What they
do or do not do will determine our future. Should we not
seek to empower ourselves so that we can fight for our
national and regional interests and for the good of the
entire world?
23. Our proposal for East Asian economic cooperation is
also propelled by the desire to ensure that East Asian
regionalism develops in the most productive way possible, in
a way that is most productive for all the economies of the
region, without forgetting our friends who are
geographically located outside East Asia.
24. Whether we like it or not, whether we want it or not,
East Asian economic interdependence and integration is
taking place at a ferocious pace now and is going to
continue at the same pace.
25. East Asian economic integration, unlike integration in
Europe and elsewhere, is completely market and business
driven. And I believe that the future economic integration
of East Asia should remain market and business driven. I
also believe that governments should lend a helping hand.
We should sit down together now and again to talk about what
is happening, and if possible, accentuate the positive and
try to do something about the negative.
26. Obviously we must work on the basis of mutual benefit,
mutual respect, egalitarianism, consensus and democracy. We
must ensure that all of us in East Asia feel secure and that
our friends elsewhere do not feel threatened. We should
further free the productive forces of enterprise.
27. At the same time we should also cooperate to champion
global trade liberalisation, the Uruguay Round and GATT.
And we should ensure that what is already inevitable -- East
Asian economic interdependence, integration and cooperation
-- will be an example to the world of open regionalism.
28. I don't think this is very difficult because all these
things are very much in our national and regional interest.
It is also very much in our interest that we secure the
foreign direct investment portfolio and capital flows,
technology, know-how, entrepreneurship and modern
management that we need from every corner of the world.
Ladies and gentlemen,
29. I do not want an open East Asia. I must say I prefer a
very open East Asia. Such a very open East Asian economic
cooperation will most definitely be a contribution to an
open world, to the globalism that we can all be proud of.
The EAEC will help bring about this very open East Asia.
The vibrance and dynamism of this region should benefit not
just the region, but the world as well.
30. The East Asian countries have proven their ability to
accept and adjust to new systems and to benefit from them.
We admit that in many fields the West have the lead, but
East Asia is not without the wisdom which can shape the New
World Order. To keep the East Asians from contributing to
the new philosophies and systems because of unwarranted fear
is to deprive the world from the vast store of knowledge and
skills that the East Asian have accumulated in the process
of their rapid development. So do not prevent us from
coming together for we can contribute to the globalisation
process. No one will lose. The world can only gain from
the formation of the open East Asia Economic Grouping.
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