ASEAN is loomed by cloud of improbability as the inauguration of the 45th President of the United States draws nearer. As the world anxiously awaits for the president-elect’s foreign policy, it is now necessary for ASEAN to weigh the implications of Trump’s presidency to this region.
ASEAN has had a strong trade relationship with the U.S in the past. In fact, ASEAN was one of U.S. most successful foreign policy areas. Under Obama’s administration, U.S. became the first ASEAN dialogue partner to establish a permanent mission to the organization. Obama also hosted the first U.S. – ASEAN summit and brought four ASEAN members into the Trans Pacific Partnership (TPP) which could promote U.S. economic exchange in this region.
Now, the concern is on Trump’s economy and trade policies. The change in the policies will have indefinite impact on ASEAN’s economy in long term. Trump has voiced out his priority to the domestic economic policies that focus on positive developments for corporations such as tax reform or deregulation. He has firmly asserted his stance on protectionism. He claimed that decades of free-trade policies were responsible for the collapse of the American manufacturing industry. He was quoted saying that he would impose tariffs on 35% on Mexican imports and 45% on Chinese imports to protect American jobs from the unfair foreign competition. Companies that import those goods would have to pay for the tax at the border.
Although his targets are the main players, the relatively small players like ASEAN will not be spared. Asia is the world’s manufacturing hub and the nations in this region are export-dependent. Raising the trade barriers would put many countries at risk. According Fitch Ratings’ report “Trump’s Election Raises Global Uncertainties: Trade, Foreign Policy Switches Could Have a Sizeable Impact” by global debt watcher, one-fifth of China’s exports go to U.S. and China is the largest trade partner for Asian exporters. Any form of disruption of trade between China and U.S. would have ramification on countries like Thailand and the Philippines that supply goods like electronic and automotive components to China.
Trump has also expressed his plan to issue a notification of intent to withdraw from TPP, the largest regional trade agreement in history signed by 12 countries covering 40% of the global economy. Under the TPP, Small Medium Enterprises (SMEs) receive support to export their products to overseas markets. The deal will also benefit raw material producers to connect with manufacturers and traders. Plus, TPP could potentially help to reduce poverty and improve human development through support to small producers.
Whichever future policy the new U.S. president wants to pursue, it is important that he pays attention to the unique characteristics of the ASEAN-U.S. ties. There are reasons why Trump needs to pay attention to ASEAN:
The prevailing change in the U.S. would have significant impacts on ASEAN. Hence, it is time for ASEAN members to come together and search for new common grounds. The countries need to stand together and forge a new future that is more integrated, more cohesive and less fragmented.