PLATFORM : Apprehension Over Trading Blocs

In the last 20 years, the Asian-Pacific region has seen historic changes. But because this has been a gradual, evolutionary process, many Americans have not noticed the true significance of these changes. On the whole, the region is peaceful now. In many countries, poverty has been overcome, and East and Southeast Asia have become the most economically dynamic regions in the world.

Admittedly, there are still problems to be resolved, and in spite of the progress and prosperity the region has achieved, there remain many uncertainties. It is incumbent upon both Japan and the United States to commit to tackling these problems.

I would like to give a brief overview of the economic importance of the Asia-Pacific region. This region’s economic growth rate has been nearly twice the world average. U.S. trade with the Asia-Pacific region surpassed U.S. transatlantic trade in the mid-’80s. For Japan as well, its trade and investment in the region have been steadily expanding--Japan has become the largest single direct investor in the region, and ranks as the top trading partner with most of the major Asian countries and entities. It is also by far the largest donor of official development assistance to the developing nations in the region.

No tightly knit economic entities similar to the European Community have been advocated in this region.

There are a variety of loosely structured forums in the Asia-Pacific region, the most important of which is the Asia-Pacific Economic Cooperation (APEC). At present, APEC itself can in no way be called an economic bloc, and I don’t anticipate it will become one. In this context, though, I’d like to tell you that there is an apprehension in Asia that the EC and a North American free-trade area might form introverted, less open economic entities. This is why some Asian leaders have proposed the formation of economic entities in Asia, which would exclude non-Asian developed nations such as the United States. However, I sincerely hope that the North American free-trade area will be an open, extroverted system, rather than closed and introverted. If the latter is pursued, it may lead to inattention on the part of the United States regarding the Asia-Pacific region. This inattention could conceivably result in the advocacy of economic regionalism in Asia.

I would like to add that regardless of any regional groupings that may be formed, and regardless of the economic activities they may be engaged in, it will remain crucial that effective multilateral trading systems are in place. At present, the GATT (General Agreement on Tariffs and Trade) embodies such systems, which will be fortified by the successful conclusion of the Uruguay Round talks.

In closing, I would like to again underscore how critically important policy coordination and cooperation between Japan and the United States is for the future of the Asia-Pacific region. The Asian-Pacific nations themselves have a vested interest in the cooperative relationship between Japan and the United States. Neither Japan nor the United States has any desire to dominate the region. Rather, we should use our respective strengths in a complementary fashion, and all parties concerned are likely to benefit from such Japan-U.S. coordination and cooperation.