An Asian Union? Not yet

HONG KONG The inaugural East Asia summit in Kuala Lumpur that ended on Thursday can be seen as a significant setback for Chinese diplomacy. That may seem a surprising conclusion given the way that Beijing has been enjoying the run of Asian diplomatic play for at least the past three years. But instead of confirming China's position as prime mover in the new emerging Asia, the summit emphasized the misgivings that other nations have about its potential and ambitions. By the same token, the absence of the United States was a reminder of just how lonely some countries would feel were its markets and its fleet no longer there to underpin their security. The concept of an East Asian block, an equivalent in economic and trade terms to Nafta and the European Union, remains valid in principle. Intra-regional trade is already on a scale that would justify more cohesion on exchange rates and trade. But Kuala Lumpur showed the absence of the trust and political will necessary to take meaningful steps in that direction. China's snubbing of Prime Minister Junichiro Koizumi of Japan may have gone down well at home and with the Koreans. But the emphasis on past grievances showed how xenophobia lurks very close to the surface of all three major East Asian players. That alone is disconcerting for the southeast Asians who have little interest in these issues and are more concerned with forging ties than asserting their national identities. Focusing on unpleasant history is also no basis for the trust needed to build a regional economic group. It does not help that China makes scant effort to disguise its belief that it is the natural leader of the region, destined to play the role that the United States does in Nafta. China's pursuit of a bilateral trade pact with the 10-member Association of Southeast Asian Nations also detracts from the wider concept of an East Asian regional grouping. Following China's example, Korea and Japan are making similar deals. All this is in the name of freer trade and regional cooperation. But the reality is that these bilateral agreements, if they are to be anything more than pieces of paper waved by politicians, will likely divert - not create - trade and produce discriminatory provisions that set East Asian nations against each other as well as against the United States and Europe. Concern about China's ambitions was evident in the invitations to India, Australia and New Zealand to take part in the summit. Australia's invitation was significant, given the unpopularity in Asia of Prime Minister John Howard's slavish following of U.S. policy in the Middle East. India's attendance was significant in that it does relatively little trade with East Asia and has a more protectionist outlook. But now that they have their feet in the door, these outliers are unlikely to yield easily to the concept, as expressed by Prime Minister Wen Jiabao of China, that the group should be "led by the East Asian countries" - Asean plus China, Japan and Korea. The bigger 16-nation group is certainly unwieldy. Former Prime Minister Mahathir bin Mohamad of Malaysia is right to see it as a dilution of his concept, enunciated as far back as 1991, of a strong, focused East Asian group that would exclude the Australians as well as the United States. (At the time India was too inward-looking to be even considered). But the reason for this dilution is very clear. The northeast Asian economic powerhouse lacks the political cohesion to build a community. China's ambitions are too transparent. Japan is at best nervous and at worst xenophobic in its own responses to China's focus on the past. Korean nationalism is in a league of its own. As for Southeast Asia, Indonesia, will ever be suspicious of China's ethnic as well as territorial claims. Singapore prefers to stay close to the United States and Australia - and sees merit in links with India. China, meanwhile, also needs Australia, if only for its resources. China's claims to Asian leadership will ring hollow while it is more dependent on the U.S. market than its neighbors, and while its success in exports is largely the product of foreign technology and investment. Japan and Korea will not sacrifice their global commercial success in pursuit of nebulous Asian groupings. In short, the KL summit has been useful in showing up fault lines and cross linkages across Asian and the Pacific. The outcome does not suggest future conflict, but it is a reminder of the importance of the United States to Asia and a reminder that prosperity must continue to be driven by pragmatic, trade-oriented policies which set aside historical and ethnic issues.