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#5212, 31 December 2016

US Policy Orientation

Trump and “America First”: The End of the Asia-Pacific Pivot?
Akanksha Narain
Consultant, Centre for Media and Strategic Studies, New Delhi

Donald Trump’s unexpected victory has not only shocked the world but is also likely to shake up US foreign policy. While Trump’s unpredictability, campaign rhetoric and unclear foreign policy stance have left analysts and policymakers confused, there are enough hints that indicate significant change in US foreign policy towards Southeast Asia.

US Foreign Policy under President Obama

US’ role in Southeast Asia has been that of a net security provider, both through partnerships and alliances. The ASEAN region is the US’ fourth largest trading partner and a significant receiver of foreign direct investment. Despite an aggressive and powerful China overshadowing the smaller and militarily weaker Southeast Asian economies, they have been growing rapidly.

The Obama administration’s ‘pivot’ to the Asia-Pacific entailed increasing US influence in the region through new trade partnerships, free trade agreements (FTA), defence agreements, and establishing new security partners, like Vietnam. It also featured a growing US proximity to countries like India to act as a counter-balance to China in the region.

An End to TPP: Economic Fallout of Trade Protectionism
The president-elect’s rhetoric of “America First” and “Make America Great Again” seeks to shift US focus from external commitments to domestic politics. It is Trump’s belief that the country’s people and economy, among other things, have been losing out to trade deals that favour others at the cost of domestic economy. Similarly, military and security commitments abroad, be it with Japan or South Korea, are draining the US of its precious economic resources. Consequently, Trump, during his election campaign, promised to withdraw from the Trans-Pacific Partnership (TPP) and to make other countries also the shoulder economic burden of protecting them.

The likely economic and strategic fallout of Trump’s future Southeast Asian policy is manifold. Stricter trade protectionism, including withdrawing from TPP, will negatively impact Southeast Asia. The resulting higher tariffs will affect the countries that rely on the US for their export revenue. Vietnam earns US$ 30.5 billion from its exports to the US and, according to Deutsche Bank, Singapore may stand to lose close to 30 per cent of its export revenue. Further, any change in immigration policy, as suggested by Trump, would mean great losses for the Philippines. Currently, nearly 4 million Filipinos reside in the US and their remittances significantly contribute to Philippines’ GDP.

The impact will not be limited to Southeast Asia – the US itself will lose out on any potential gains from a FTA with the region. According to Singapore’s Prime Minister, Lee Hsien Loong, TPP is “an unmistakable indicator of region’s confidence in the USA.” The decision to dishonour its commitment will shake the region’s confidence in the US. Additionally, any trade barriers imposed on China by the US will trigger reciprocity, and trade wars will be detrimental not only to the US and China but also to Southeast Asia.

US’ Retreat: Strategic and Social Costs
Shifting greater cost for providing security to other countries will heavily hit Southeast Asia as increased military expenditure will come at the cost of infrastructure development and social welfare. Trump’s decision to move towards isolationism and reducing external engagements will also leave a power vacuum in Southeast Asia, which an expansionist China would quickly fill. With the US and TPP out of the picture, China-backed regional free trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP) and the Free Trade Area of the Asia Pacific (FTAAP), would augment China’s influence in Southeast Asia.

The inroads made by China at a time of a retreating US, however, will not bring stability to the region. With Trump planning to reduce its presence in the Asia-Pacific, the smaller states will lose out on their negotiating power with China. The region may be forced to appease China at a time when a number of ASEAN countries are also embroiled in territorial disputes with it. Philippine President Rodrigo Duterte’s rapprochement with China despite a raging territorial conflict is a case in point.

Lastly, the US has also played the role of moral police in the ASEAN region. It imposed sanctions on Myanmar during the brutal rule of the junta government, which are now being lifted as it makes its way to becoming a democracy. The Obama administration has time and again also expressed concern over the plight of Rohingya Muslims, human slave camps, and fishing boats in neighbouring Thailand and Malaysia. Moreover, it was during a US investigation that the alleged role of Malaysian Prime Minister Najib Razak, in amassing disproportionate wealth, was uncovered. Without the significant presence of the US in the region there are not many other countries that can flex their muscles on such issues. Therefore, it makes sense why the region’s authoritarian leaders like Cambodia’s Hun Sen or Thailand’s General Prayuth Chan-ocha and the Malaysian PM have welcomed Trump’s election.

What Next?
If the US were to indeed reduce its economic and military presence in the region, ASEAN countries will have to look to other trading and alliance partners such as the European Union, Australia, India, China, and Japan. The question that remains is: will they be able to fill the US’ big shoes and bring stability to the region?

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