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INFO PRIORITY WASHINGTON, TOKYO, SEOUL

EAST ASIAN ECONOMIC CAUCUS (EAEC)

SUMMARY

1.

PRIME MINISTER DR MAHATHIR SETS OUT QUOTE DESIGN PARAMETERS UNQUOTE FOR THE EAEC. PERCEPTIBLE INCREASE IN MOMENTUM BEHIND THE IDEA, AND HINTS OF A SOFTENING IN MALAYSIAN THINKING ON THE RELATIONSHIP BETWEEN THE NEW BODY AND APEC.

DETAIL

2.

ON 13 MAY DR MAHATHIR ADDRESSED AN ASIA SOCIETY CONFERENCE HELD

IN TOKYO. AGAINST AN OVERALL THEME OF QUOTE ASIA AND THE CHANGING WORLD ORDER UNQUOTE, HE SPOKE ON QUOTE WORLD TRADE: GATT, GROUPS AND GROWTH UNQUOTE (FULL TEXT FOLLOWS BY BAG). THE EVENT HAS RECEIVED MORE THAN USUALLY INTENSIVE PRESS COVERAGE HERE, LARGELY BECAUSE MAHATHIR TOOK THE OPPORTUNITY TO SET OUT IN UNPRECEDENTED DETAIL WHAT HE SEES AS THE PURPOSES OF HIS PROPOSED EAST ASIAN ECONOMIC CAUCUS.

3=

MAHATHIR BEGAN WITH A RITUAL BUT PASSIONATE LAMENT ABOUT FALTERING OR NEGATIVE WORLD GROWTH RATES, AND THE DAMAGING EFFECTS OF THE FAILURE TO CONCLUDE THE URUGUAY ROUND. IT BEHOVED EAST ASIA QUOTE WHOSE STRATEGIC CIRCUMSTANCES ARE BETTER THAN AT ANY TIME IN

THE LAST CENTURY AND A HALF UNQUOTE NOT ONLY TO WORK FOR ITS OWN ECONOMIC ADVANCEMENT. THE REGION SHOULD ALSO QUOTE BUILD A PRODUCTIVE COALITION FOR THE SUCCESS OF THE URUGUAY ROUND, FOR THE SUSTENANCE OF THE OPEN MULTILATERAL GLOBAL TRADING SYSTEM AND FOR

OTHER NON-TRADE GOALS THAT ARE PRODUCTIVE OF REGIONAL AND GLOBAL

ECONOMIC INTERESTS UNQUOTE.

4. THE VEHICLE FOR BOTH, MAHATHIR IMPLIED, SHOULD BE THE EAEC. CHARACTERISING ITS ESSENCE AS QUOTE MARKET-ORIENTED OPEN REGIONALISM UNQUOTE, HE GAVE THE GROUPING SEVEN QUOTE DESIGN PARAMETERS UNQUOTE. IT SHOULD:

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