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Thailand proposes trade bloc

Vice President Dan Quayle called it "counterproductive." Japan was "cool and impassive." But a proposal for Asian countries to create a trade bloc that could hold its own against North America and a united Europe seems to be catching on in Southeast Asia. The idea was raised by Malaysian Prime Minister Mahathir Mohamed, who proposed the creation of an "East Asian Economic Group" after the December collapse of the international trade talks known as the Uruguay round of the General Agreement on Tariff and Trade.

Mahathir's proposal would bring together the six members of the Association of Southeast Asian Nations _ the Philippines, Thailand, Malaysia, Singapore, Indonesia and Brunei _ as well as Japan, China, South Korea, Hong Kong, Taiwan and Vietnam.

The Malaysian leader expressed concern that Asian nations might not get a fair hearing individually _ particularly after the formation of the North American Free Trade Zone, involving the United States, Canada and Mexico, and the 1992 unification of Western Europe in a single trading community.

The plan also reflected a changing reality in Asia: After a decade of looking westward, Japan soon will become Southeast Asia's largest trading partner and investor. Whether trade barriers can be lowered within Asia increasingly will dominate economic discussions in the region.

Mahathir specifically excluded the United States, Canada, Australia and New Zealand from his proposal, a move that prompted a storm of criticism. The Australians and New Zealanders felt unfairly left out of the Asian trading club. The United States felt cold-shouldered.

"What we do not welcome is this idea that the U.S. should be excluded from participating in any kind of economic development talks," Quayle said.

Malaysia shot back, calling Quayle "arrogant" and arguing that the Asia proposal was no more anti-U.S. than the European community, which also did not include Washington. "The U.S.A. is again showing its fangs by trying to dominate everybody and everything," said a commentary on Malaysia's official radio.

Japan, whose participation would be crucial to getting such a concept afloat, was clearly nervous about agreeing to any trade plan that might raise protectionist hackles on the other side of the Pacific.

It also seemed concerned about stirring up unpleasant memories of Tokyo's wartime dreams of a Japanese-led Asian empire called the Greater East Asia Co-Prosperity Sphere.