(FORTUNE Magazine) – IS A PROTECTIONIST trade bloc likely to emerge in Asia between now and the next millennium? Don't bet on it. In a region where the religions are as different as Taoism and Islam and the languages range from Malay to Mandarin, the big miracle will remain that its leaders can even agree on what to have for lunch when they meet to discuss trade issues. About the only thing that unites Asia's disparate nations is their continuing distrust of the economic giant whose leadership is essential to forging any formal new trade regime -- Japan. Bitter memories of Japan's brutal attempt to colonize Asia as part of its ''Co-Prosperity Sphere'' still linger from northern China to Australia. When Korean marathon runner Hwang Young-cho won a gold medal in Barcelona, the national jubilee that followed was made doubly sweet by the fact that his victory came at the expense of a Japanese rival. The last Korean marathoner to win an Olympic medal had to run with a Japanese flag pinned to his chest in Berlin in 1936. Even so, the economies of every nation along the Pacific Rim are pulling closer together than ever before, and this trend will only accelerate in the 1990s. The result by the year 2000 could be something resembling the proposed North American free-trade zone or Europe's post-1992 single market. But the path to that goal won't be the same. Says Saburo Okita, head of the Domestic and International Policy Studies Institute in Tokyo: ''One of the big differences between East Asian integration and European integration is that in Europe it's based on treaties. In East Asia it's based on market forces.'' Chief among those forces is the region's hothouse growth. During the 1990s that growth should average 5% to 6% a year, according to the global scorekeeper on such matters, the Organization for Economic Cooperation and Development in Paris. That's twice as fast as the OECD's forecast for North America and roughly 50% faster than its most optimistic projection for growth in a more unified Europe. Result: By 2010, Asia should account for a third of world production, up from about 25% now. More and more, that growth is coming from intra-Asian trade. During the 1980s the western lip of the Pacific Rim replaced North America as the main market for the region's booming exports. Asia's share of those exports jumped from 30.1% in 1980 to nearly 40% by decade's end. Nearly 50% of Pacific air cargo now moves between Asian destinations. Singapore's giant port handles more shipments than any other destination on the globe. About half arrive from neighbors: Malaysia, Thailand, Hong Kong, and Taiwan. A stupendous outflow of direct investment from Japan underpins much of this growing economic integration. This surge occurred after 1985, when the rising yen forced Japan's exporters to move a lot of their production to lower-cost factories elsewhere in Asia. From 1986 to 1990, Japan invested $25.2 billion into eight of the region's fastest-growing economies. This spurred a huge leap in exports back to Japan, whose notoriously impenetrable market proved a lot easier to crack when a Southeast Asian product carried a Canon or Panasonic label. Consider Matsushita Electric. From 1961 to 1985 it established 19 operations in Southeast Asia. These were basically transplants that assembled products with parts from Japan and shipped them to the U.S. Since 1985 the number of plants has doubled. The company has 40,000 workers (only 500 of them Japanese), who produce practically Matsushita's entire line of consumer electronics and parts. To manage this empire the company decided a few years ago to set up a second headquarters, in Singapore. Says Hisao Tahara, managing director of Matsushita's overseas operations: ''We expect that exports back to Japan will account for much of the future growth of these operations.'' Despite the obvious benefits, many Asians are still troubled that so much of their new economic dynamism revolves around the rising sun. Says Lee Hahn Koo, president of Daewoo Research Institute in Seoul: ''No country can protect itself from Japanese influence. Even Korea cannot maintain its economic level without help from Japan. We must import technology, capital, equipment, and we do not have the core technology or even parts for assembly production.'' For the most part, Japan's lead over its neighbors, in everything from technology to finance to living standards, is considerably greater than the edge that Germany enjoys in Europe. So until that economic gap narrows even further, don't look for Asia to make much progress toward a European-style common market -- one characterized by a single set of standards and regulations, the absence of internal tariffs and trade barriers, and a unified policy on external trade issues. Agrees Terumori Ashida, who oversees the Sogo department stores that have branched out from Tokyo all along the Pacific Rim: ''If there were a free-trade zone in Asia tomorrow, Southeast Asian countries would end up economically as Japan's colonies again. That's the best reason to think it won't happen.'' About the only thing that could make it happen would be if the U.S. and Europe turned markedly more protectionist against both the Japanese and the rest of Asia. No one expects that to occur. But just in case, Asian officials are for the first time talking seriously about at least strengthening regional political consolidation. The most popular proposal at the moment is to beef up the three-year-old Asia-Pacific Economic Cooperation forum. The aim would not be to replicate the European Community's powerful Brussels bureaucracy, but to make the organization more closely resemble the OECD, which is merely a center for research and high-level discussion. Last year Malaysian Prime Minister Mahathir Mohamad caused a stir by proposing that the U.S. be excluded from any new club. Most senior Asian officials, executives, and experts reject that idea. Fuji Xerox Chairman Yotaro Kobayashi, one of the Japanese managers who is leading the charge toward a more integrated Asian economy, summarizes the prevailing keep-your- powder-dry viewpoint: ''Regional economic integration around the world is increasing in intensity. That alone should force Asia to think about forming some sort of new organization, not necessarily to compete with the EC or a North American free-trade agreement, but to maintain a balance in negotiations. Still, no one in his right mind would think of excluding the U.S. from such a group.'' If the U.S. and Europe got really nasty and blocked access to their markets, however, the scenario for Pacific cooperation could change very quickly. Then Asia would have no choice but to try becoming dramatically more self- sufficient. Even the unlikeliest of bedfellows -- Japan and Korea -- would probably get together. Admits Lee Hahn Koo of Daewoo Research: ''No Koreans are cooperative with Japan. But if the situation changes and they know they have no options, then they will.'' The more likely prospect is that for at least the next decade Americans and Europeans in Asia will continue having to battle for markets or settle trade disputes just the way they do now -- one country at a time.