The outcome of the US presidential contest could have far-reaching effects on trade and security in the Asia-Pacific region, says Manu Bhaskaran
This article was first published in the October 2016 China edition of Accounting and Business magazine.
Like it or not, the US has an outsized impact on Asia. It acts as a guarantor of security in the region and provides exporters with a huge consumer market. Its technology enriches Asian economies, its foreign investment is significant and its monetary policies can unleash capital flows into and out of Asia.
As such, any US election is significant for Asia, but even more so this year because the contenders, Hillary Clinton and Donald Trump, represent very different visions of the role of the US in the world. To many Asian observers, a Clinton presidency would mean continuity while a Trump administration would create uncertainty at the least.
Clinton is a known quantity in Asia, particularly South-East Asia. As secretary of state, she made it a point to regularly attend summit meetings of the Association of Southeast Asian Nations – unlike her predecessors. She impressed her interlocutors with her command of the issues Asian nations face. Under Clinton, US forces would probably remain a largely stabilising force in East Asia, with progressively greater efforts being made to sustain mutually beneficial economic ties.
Many Asian commentators worry that a Trump-led US will play a smaller role in Asia, creating a vacuum that could lead to instability. Trump has raised questions over the commitment to defend Japan and South Korea. He has lashed out at trade agreements that have allowed trade to blossom for Asia and appears to have a particular animosity on trade issues – there is a good chance that the US would turn more protectionist under him. Asians have noted that none of the foreign policy advisers Trump has appointed have much experience of Asian issues.
One thing is clear: American politicians of all stripes now realise the depth of resentment felt by a sizeable number of voters against the perceived downsides of free trade and globalisation. Should the US turn inward and abjure further initiatives to promote the global economic integration that has served Asia so well, Asia’s economic prospects would be set back.
This risk is most evident in the fate of the Trans-Pacific Partnership (TPP) agreement, which the US signed with 11 Asia-Pacific countries in a bold effort to create a huge free-trade area representing around 40% of world GDP. Clinton, who once referred to the TPP as the gold standard of trade agreements, has now been forced to oppose it. A US failure to pass the TPP would represent a huge setback to ties with key countries in the region – not just as a result of the loss of the benefits from greater integration but also in terms of the respect that the US would squander.
On the security front, the damage could be even greater. Many look to the US as a stabilising force and fear that without a strong and credible US presence, Japan may feel compelled to re-arm, sparking off a destabilising arms race in East Asia.
Other potential flashpoints would also become more difficult to resolve. For instance, the US has played a vital role in efforts to contain the North Korean regime’s development of nuclear weapons. Moreover, this regime is itself weakening and could fall apart, amplifying the dangers. Without an active US role, efforts to mitigate all these risks would founder, leading to a period of destabilisation in North-East Asia.
The November presidential election in the US represents a major turning point for Asia. The balance of power in this region could be shaken and economic prospects clouded for a long time should the elections result in a reduced US presence in the region.
Manu Bhaskaran is CEO of Centennial Asia Advisors in Singapore
"One thing is clear: American politicians of all stripes now realise the depth of resentment felt by a sizeable number of voters against the perceived downsides of free trade and globalisation."