Trump’s Asia policy keeps experts guessing
New US president has yet to discuss the region, leaving Thailand’s fate under the administration uncertain, write Kornchanok Raksaseri and Prangthong Jitcharoenkul
Thailand is likely to be only indirectly affected by US policy changes under the new administration. Donald J Trump was sworn in as the 45th president of the United States yesterday. Although his policies have largely yet to be announced, he reaffirmed his vow to “make America great again”, and reiterated his inward-facing and protectionist views that resonated with the electorate during his campaign.
Thai academics agreed that Mr Trump’s wish to reduce imports from China could have an effect on Thailand, because China is a major importer of Thai goods. However, if Mr Trump is successful in boosting the US economy, then the entire global economy, along with Thailand’s exports, could see an uptick.
Chaowarit Chaowsangrat, a lecturer in modern history, Faculty of Liberal Arts at Thammasat University, said that in the case of a trade war between the US and China, Thailand’s exports to China could suffer in the short term, but would enjoy a surge in US domestic demand.
Kirida Bhaopichitr, Research Director for International Research and Advisory Service at the Thailand Development Research Institute, said: “Following the US’s trade pressure on China, some investors might move out of China, and Thailand could be a good place to invest.”
China is Thailand’s top trading partner country with a total of US$60 billion (2.1 trillion baht) worth of goods traded in 2016. The US ranked third with over $30 billion traded. The value of Thai exports to both countries exceeded $21 billion, according to the Department of Trade Negotiations.
The new US president has expressed opposition to the Trans-Pacific Partnership (TPP) and other multilateral pacts, but has shown interest in opting for bilateral trade deals.
International relations academic Somchai Phagaphasvivat said withdrawing from the Obama-driven TPP would greatly benefit Thailand.
TPP member countries require higher standards for products, especially in areas of hygiene and human rights. Thailand, being outside the pact, would struggle to trade with TPP countries. Import taxes would also be imposed on Thai products, he said.
Another Asia-Pacific economic agreement, the Regional Comprehensive Economic Partnership (RCEP), which comprises Asean countries, China, India, Australia, Japan South Korea and New Zealand, but excludes the US, will be receiving more serious attention if the TPP is not ratified, he said.
Thailand and Asean’s trade value exceeded $80 billion last year.
With Mr Trump’s “America First” policy, and the lack of interest he has shown in Southeast Asia, political scientists and analysts expect less pressure from the US on Thai politics.
“What Thailand could do to restore fullscale cooperation with the US is to stick to the political roadmap. It will also help Thailand preserve its credibility,” said Chaiwat Khamchoo, a Chulalongkorn University political science lecturer.
He added that it was possible that the US would also use Thailand to pressure China on various matters.
Mr Chaiwat does not believe Mr Trump will impose high tariffs on goods imported into the US as he has repeatedly vowed.
Those affected may be among the manufacturers producing 95% of American products which go outside the country and the 3.5 million Americans working in such industries.
The US is the world’s second-largest exporter after China.
Mr Chaowarit said that America’s political system restricts the president from having absolute power, which would temper any lone ambitions Mr Trump may have.
Isara Vongkusolkit, Chairman of the Thai Chamber of Commerce, said that to avoid getting hurt by the US’s new trade policy, Thailand should continue investing in Asean and turn its attention to “CLMV” countries — Cambodia, Laos, Myanmar and Vietnam, which are growing rapidly.
Meanwhile, human rights activists have expressed concerns over Mr Trump’s policies.
Sompong Srakaew, director of the Labour Rights Promotion Network, speculated there would be a decrease in funding from the US for local non-governmental organisations.
Deputy director of Human Rights Watch’s Asia division Phil Robertson said there was uncertainty over any changes in policy toward China but the possibility of tensions and negative outcomes was not unlikely.
Panitan Wattanayagorn, adviser to defence minister and a political science lecturer at Chulalongkorn University, however, said Thailand has nothing to be worried about.
He believed America still wants to remain influential in Asia and maintain its benefits in the region.
America’s political system restricts the president from having absolute power, which would temper any lone ambitions Mr Trump may have.
CHAOWARIT CHAOWSANGRAT THAMMASAT UNIVERSITY LECTURER