During his first tenure as prime minister, Mahathir had proposed the formation of the EAEC, which would encompass Asean countries, China, Japan and South Korea.
Speaking at the Nikkei conference in Tokyo, Mahathir said he was still in favour of the free trade zone, which he suggested be expanded to include other countries such as India and those in central Asia.
“In the past, we were not able to do this because of objections from the US, but now the US is isolationist so they are not in a position to demand that we don’t form the EAEC,” he said.
With a group such as the EAEC, he added, weaker nations would be in a better position to negotiate with more powerful countries like China.
“China has a huge market, and this is very attractive to countries in Southeast Asia. China today is more powerful and richer than before.”
Because countries in the region, including Malaysia, wanted to access the Chinese market, he said, dealing with Beijing was a must.
“The best way is to negotiate as a group rather than as individual countries. I think if the whole of Southeast Asia tries to negotiate as group with China on the need for peaceful trade, China will accede.”
Mahathir said growing nations like Malaysia needed different trade protections, and while Kuala Lumpur was not against trade pacts such as the Trans Pacific Partnership (TPP), the agreement must be renegotiated.
He said different economies needed different rules in order to compete fairly with giants such as the US and China.
“Small countries cannot compete on the same terms as bigger countries,” he said.
“We are not completely against the TPP but it needs to be re-negotiated… so that smaller countries would have the chance to compete because they would be given certain handicaps.”
Mahathir also reiterated that Malaysia wished to avoid the presence of warships in the South China Sea and the Straits of Melaka.
He said given its strategic position, Malaysia would remain a trading nation, adding that it wanted a good relationship with other countries as well as access to all markets.
Mahathir is on a three-day working visit to Japan. Aside from the Nikkei conference, where he will meet Japanese counterpart Shinzo Abe, Mahathir is also expected to meet several business entities such as the Japan Chamber of Commerce and Industry, Japan External Trade Organisation and Japan-Malaysia Economic Association.