Donald Trump and ASEAN’s Pivot to China

November 19, 2016

Donald Trump and ASEAN’s Pivot to China

by Mayuri Mei Lin

Businessman and reality TV star Donald Trump pulled off a victory that shocked the entire world last week when he won the US presidential election after a contentious and divisive campaign against Hillary Clinton.

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He defied all the major polls, which almost unanimously predicted another Clinton back in the White House, and he showed that his racially-tinged rhetoric represented the views of the American majority, via the electoral college at least, and he also caused the global economy to go into a momentary tailspin after his win.

The Mexican peso plummeted to record lows and the Japanese yen, often seen as a safe haven, also tumbled against the dollar.

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While Mr. Trump has made drastic statements about how he plans to map out US foreign policy, key among which was his protectionist pledge to protect American jobs from free trade agreements, analysts have said that ASEAN economies will likely see little impact, in the short-term at least.

Part of his vow to “Make America Great Again” were inward-looking policies to boost the local economy, which is an indicator that he will spend his first year in the White House focusing on domestic policies first rather than policies affecting ASEAN, they added.

“It would appear that Trump would focus more inward, in developing the American economy, and hence spend less energy in international affairs in general and Asia-Pacific matters specifically,” Singapore’s Nanyang Technological University S. Rajaratnam School of International Studies’ Senior fellow Dr. Oh Ei Sun told Khmer Times.

“I think [his] volatility was mostly to woo the disgruntled voters during the campaign period. I think Trump will mellow down gradually as he settles into his presidency. He is also a businessman, so you will actually see him being more willing to cut deals,” Dr. Oh added.

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Dr. Lim Teck Ghee (pic above), a former World Bank senior social scientist and the current CEO of Malaysia’s Centre for Policy Initiatives, added that while it was far too early to tell how a Trump presidency would affect Southeast Asian nations, it was possible that any changes would not happen in the short-term.

ASEAN – despite it being the seventh largest economy, according to global consulting firm McKinsey’s 2013 numbers, with a GDP of $2.4 trillion – still ranks low on the US’ list of priorities when lined up alongside other powerhouses like China, India and Europe.

“[It’s] too soon to tell. Trump has made all sorts of election promises which will now need to be prioritized and implemented by his new team,” said Dr. Lim.” I expect ASEAN to be low down his agenda of change.

“Election talk for most leaders generally remains election talk. Expect him to move more slowly on international policy than what his electoral speeches may have promised.”

One certainty to come out from Mr. Trump’s presidency, however, is scrapping the Trans-Pacific Partnership (TPP) agreement after the businessman made anti-global trade policies a key pillar throughout his campaign.

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Mr. Trump has repeatedly criticized the TPPA, even calling it a “continuing rape” of the US due to the outflow of manufacturing jobs. However, analysts argue that this too will have a minimal impact as none of the 11 signatories have ratified the trade deal.

“Many analysts expect that TPP will now be scrapped, but that will not mean much since the current status quo in international trade and investment will continue,” Dr. Lim told Khmer Times. “What comes after is a more protective US trade policy, but its actual form and details will need time to hammer out.

“I do not expect Trump to trigger a trade war so quickly or even in the near future. He will look for greater advantage for US industry and exports as well as try to cut back on imports that affect American labor.”

Media reports also quoted the Obama administration as saying last Friday that it would be suspending efforts to pass the free trade deal until Mr. Trump assumes office in January. The Guardian quoted congressional leaders from both sides of the political divide conceding the trade deal’s imminent death, saying it would not pass Congress.

Now with the TPPA, which excluded China and was seen as the US’ bid to best the Asian powerhouse economically, no longer being feasible, ASEAN nations would likely focus more on realizing the Regional Comprehensive Economic Partnership (RCEP), a Beijing-backed trade deal.

“The TPP is of concern to Vietnam and Malaysia mainly, but if it does not become reality, then the existing option of RCEP will be given more consideration. No big and sudden changes are to be expected,” Dr. Ooi Kee Beng, Deputy Director of Singapore’s ISEAS-Yusof Ishak Institute, told Khmer Times.

The RCEP, initiated in 2012, is a proposed trade deal between the 10 ASEAN member nations as well as the six nations with which they have existing free trade agreements – Australia, Japan, China, India, South Korea and New Zealand.

According to Singapore news outlet Today, the RCEP would cover 3.4 billion people in the Asia-Pacific region and total a combined GDP of approximately $17.2 trillion, which amounts to one third of the world’s current annual GDP.

Comparatively, the finalized TPP proposal was signed by the 12 member states – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam – in February. Covering 800 million people in the Pacific Rim and pooling a GDP of about $30 trillion, or 40 percent of the global GDP, the trade deal was expected to reduce trade barriers among member states as well as to lower tariffs on select goods.

Japanese Prime Minister Shinzo Abe also said that with the TPP unlikely to materialize, Japan would now turn its attention to the RCEP.

“There’s no doubt that there will be a pivot to the RCEP if the TPP doesn’t go forward,” Singapore’s Straits Times quoted him as saying. The renewed interest in the RCEP, coupled with recent visits to Beijing by Philippine President Rodrigo Duterte and Malaysian Prime Minister Najib Razak indicated that ASEAN’s pivot to China will keep growing.

China already is Asia’s largest trading partner and with the US potentially shutting its doors to global trade, this could result in the Asian powerhouse gaining further ground in the Asia-Pacific region.

“So given [Trump’s inward-looking policies] and China’s willingness to invest heavily overseas, it is conceivable that Southeast Asian countries would be even more closely linked to China,” Dr. Oh said.

“No one is sure what Trump’s foreign policy is going to look like. What is more definite in the short-term is that ASEAN countries will be rethinking their options, while they apprehensively wait for clear signals on where the US is planning to go, where it’s East Asia presence and commitments are concerned.”

Mr. Trump has repeatedly blamed global free trade deals for stealing American jobs, especially while campaigning in rust belt states like Pennsylvania, Wisconsin and Michigan. He singled out China, calling it a “currency manipulator,” and Mexico, accusing both countries of luring manufacturing jobs away from the American people and distorting trade.

He has also vowed to build a wall along the Mexico-US border, which he will make the Mexicans pay for, and also said during his campaign that he plans to ban Muslims from entering the US due to what he claimed was growing anti-Islam sentiments after the attacks on Paris and San Bernadino, California.

In an interview with CBS after his election, Mr. Trump reiterated his stance on building the wall and also vowed to deport up to three million immigrants with criminal records.

4 thoughts on “Donald Trump and ASEAN’s Pivot to China

  1. The victory only shocked those who got their news from the MSM. For those who also followed events on IM (Internet Media) the writings were already on the wall.

  2. Guys, look Steve Bannon thinks there are way too many dirty Asian and SE Asian CEOs in Silicon Valley – even though the numbers say otherwise – so all this is about making America white, straight and Christian Again….at least for the people who have this moron’s ear .

    The people who voted for him and supported him, are going to get royally screwed.

    But that’s democracy. Yay.

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