INTRODUCTION

Dazzling development in Asia-Pacific region is shifting the focus of global economic growth to the region, especially to the nations of East Asia. Those nations will figure prominently in the course of the global economy as the world approaches the 21st century.

A characteristic pattern of economic development in East Asia has emerged: Governments get involved in markets in the early stages of development to foster private-sector industries. Then, as those industries become internationally competitive, the governments abandon projectionist measures and liberalize trade and investment.

By way of liberalization, governments lower tariffs, lift import quotas, relax restrictions on inward investment, and privatize state enterprises. Those and other measures invigorate trade, investment, and technological cooperation and lead to market expansion. Another feature of the Asian pattern of economic development is the great role of direct investment from Japan.

The entire East Asia economic zone has been integrated by the private sector economic transactions, invigorated by growing penetration of free market mechanism. The East Asian nations that participate in that vitality differ greatly from their European counterparts, whose European Union benefits from a commonality of political and cultural values unknown in Asia. Their interaction differs, too, from the North American Free Trade Agreement, which centers on a single country: The United States is the counterpart for 70% of Canada's and Mexico's exports and imports. Public institution building took the lead in the EU and NAFTA process.

This March, Keidanren prepared its "Interim Report on Cooperation for Continued Development in Asia." That report highlights the role Japan should play in maintaining and furthering economic development in Asian nations. It emphasized the need for Japan...

  1. to deregulate and otherwise open its domestic markets,

  2. to help upgrade the industrial structure in other Asian nations through investment, training, and technology transfers, and

  3. promote "open regionalism" with an eye to maintaining the global framework of multilateral free trade in accordance with the principles of the General Agreement on Tariffs and Trade (GATT).

Business leaders from 11 economies of East Asia voiced agreement with these points of the report at our conference "Asian Neighbors Forum" hosted in March 1994 by Keidanren.

Members of the Asia-Pacific Economic Cooperation (APEC) forum will gather in Indonesia in November. And interest in internal cooperation in the Asia-Pacific region is mounting as that gathering gets closer. To provide a basis for considering Asia-Pacific economic cooperation, Keidanren has rounded up its recent deliberation and make its basic views public at this point.

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