‘Business as usual if Clinton wins’
CLINTON OR TRUMP? Outcome may affect trade with nation
THE much-anticipated United States presidential election today may have an impact on Malaysia-US trade relations due to the different stance on policies between Democratic contender Hillary Clinton and her Republican rival, Donald Trump, and some industry leaders have shared their thoughts on the potential outcome if either one of the candidates is victorious.
MIDF Amanah Investment Bank Bhd chief economist Dr Kamaruddin Mohd Nor said a win by Clinton would see a status quo in foreign policies and a continuity of similar approach as Obama’s.
“Trade-wise, US is an important trade partner for Malaysia, recording a double digit growth of 11.5 per cent to RM59.35 billion in the first nine months this year.
“The US accounted for 10.4 per cent of Malaysia’s total exports. The growth in exports is driven by manufactured goods, which mainly consist of electrical and electronics (E & E), optical and scientific equipment. The E & E sector made up more than 60 per cent of Malaysia’s export to the US.
“If Trump wins, there will be a possible shock in the short to medium-term due to uncertainty surrounding possible revision on trade practices in the US,” he told Business Times.
On the other hand, he said trade value and volume might suffer a possible decline as businesses gauged possible policy changes of the Trump administration.
“Protectionism measures in the form of tariff and non-tariff measures will affect the trade relationship between the US and Malaysia. Thus, the E & E sector may experience contraction in volume and value.”
On the possible impact of the Trans Pacific Partnership (TPP) agreement on Malaysia, Kamaruddin said based on the election’s manifesto, Trump was clearly against the trade pact while Clinton’s stance was biased towards relooking at the details.
“However, looking at the geopolitical development in this region, I would think sticking to their election pledges in regards to trade — abandoning TPP and imposing high tariff, — will be mere election promises.
“Protectionism is not good for trade, and globally, this measure will not only affect emerging economies, but also open-trade major beneficiaries, such as US multinational companies.
“As for emerging markets, should Trump
Hillary Clinton win, there may be changes in US trade policies and approach, but it will not materially impact trade,” he said.
Trump’s win, said Kamaruddin, could send a shock through the financial markets as US equities would slump and trigger a sell-off.
“Clinton’s win would mean business as usual as her win is priced-in by the market,” he said.
Malaysian Institute of Economic Research executive director Datuk Zakaria Abdul Rashid said the election would have minimal impact to the Malaysian economy.
“The ultimate decision would have to go through Congress and regardless of who wins the election, the US will realise that Asean is an important economic power.
“On the global scale, however, the economy will be affected. For TPP, it is not so easy to predict as we have yet to wait and see as things (and circumstances) are changing,” he said.
Sunway University economics professor Dr Yeah Kim Leng said a win by Clinton would be less disruptive for the world markets and Malaysia, given the uncertain policy shifts and hardline stance against China, other developing economies and antiglobalisation stance expounded by Trump.
“Although both candidates have expressed opposition to TPP, it has a greater chance of being passed by a Clinton presidency.
“The election results will have less a bearing on the Malaysian economy compared with an improving US economy that is showing signs of firmer growth.
“A stronger US demand should help to boost Malaysian exports, especially in E & E products. Overall commodity demand should be firmer on the back of a stronger US economic growth, thereby indirectly benefiting Malaysia’s commodity sector,” he said.
Malaysian Rubber Gloves Manufacturers Association president Denis Low Jau Foo said it was natural that US would seek a “nationalistic” president when the economy was sluggish.
“It will be business as usual with Hilary Clinton. If she has spoken about not being very pro-TPP, she may have to change her mind as money, time and the fact that TPP is good for America and the countries that support it.”
Malaysia Airlines Bhd chief executive officer Peter Bellew said there would be no direct impact to the Malaysian aviation sector. Additional reporting Farah Adilla and Ooi Tee Ching