Asia ponders whether Trump will walk the talk – Nikkei Asian Review/FT


Indonesian Trade Minister Enggartiasto Lukita Speaking to U.S. investors in Jakarta in Sept. 2016 (Photo: Simon Roughneen)

Indonesian Trade Minister Enggartiasto Lukita Speaking to U.S. investors in Jakarta in Sept. 2016 (Photo: Simon Roughneen)

JAKARTA — After a bilateral meeting on Nov. 11, Philippine President Rodrigo Duterte and Malaysian Prime Minister Najib Razak serenaded each other at a state dinner in Kuala Lumpur with grandfatherly karaoke versions of “Wind Beneath My Wings” and “Sha-La-La-La-La.”

Two of Asia’s most controversial leaders had just wrapped up talks on addressing maritime kidnapping, a scourge in the waters between eastern Malaysia and the southern Philippines, and it was time to let off some steam ahead of the weekend.

But perhaps both men had another reason for the sing-song: Donald Trump’s shock triumph in the U.S. presidential election just days earlier, which they welcomed effusively.

Duterte and Najib were both criticized by the outgoing Obama administration. In the lead-up to the Nov. 8 election, both leaders visited China, lauded ties with Beijing and complained about the hectoring, overbearing West — meaning, first and foremost, the U.S.

“On the international stage, too, we share similar beliefs, including that of an ‘Asian Century,'” said Najib of his fellow Southeast Asian leader.

The president-elect’s own “America First” campaign rhetoric implied that the property mogul-turned-politician neither knows nor cares about domestic politics in allied countries such as the Philippines.

Trump has slammed China’s economic policies and said that Japan and South Korea should spend more on defense, but otherwise has said little about Asia.

REVERSE PIVOT If Trump’s isolationist talk translates into policy, it will likely mean countermanding one of Obama’s signature foreign affairs forays — the so-called “Asia pivot.”

“As far as we can tell, Trump’s presidency will mean the end of the pivot to Asia as an explicit part of U.S. foreign policy,” said Tom Pepinsky, a Southeast Asia analyst at Cornell University.

What that means for the U.S. military presence in Asia remains unclear. Any drawdown could fuel regional insecurity by enhancing China’s growing military heft in the region and emboldening North Korea to test the defenses of South Korea and Japan.

Trump said he wants Japan and South Korea to pay more to keep U.S. soldiers in the region, echoing allegations of freeloading he made about NATO members in Europe.

Chung Jin-suk of Seoul’s governing Saenuri Party told parliament on Nov. 9 that people should “expect dramatic changes in the security environment,” in the wake of Trump’s win.

The president-elect has since told South Korean President Park Geun-hye that the U.S. will “protect against the instability in North Korea,” according to Park’s office.

Trump has given mixed messages on whether — as threatened — the U.S. will step back from Asia. Michael Flynn, former head of the U.S. Defense Intelligence Agency and a foreign policy adviser to the Trump campaign, told the Nikkei Asian Review in October that the U.S.-Japan alliance is “critical” for the security of Asia. Trump definitely “shares the same opinion,” he said.

Even so, Flynn added, “leaders [should] examine what are the costs, what are the needs to maintain security and stability [in the region].”

Also unclear is Trump’s stance on maritime disputes in the South China Sea, almost all of which is claimed by Beijing even as the U.S. has increased naval activity in the area to warn off China. The first test of Trump’s views on rivalries in the disputed waters could come if more revelations emerge about China’s artificial island-building or militarization in the sea, or at regional summits in Asia in 2017.

If Trump backs off, “Southeast Asia will wonder if the U.S. is a reliable partner, and some are thinking that way already,” noted Lee Jones of the School of Politics and International Relations at Queen Mary, University of London.

Trump has intimated that Russia should have a freer hand in the former Soviet Union and has suggested he would end U.S. support for so-called moderate rebels fighting government forces in the Syrian civil war. In a Nov. 14 phone conversation with Russian President Vladimir Putin, Trump said he wants the two countries to have “a strong and enduring relationship.”

If Trump views China’s claims in the South China Sea as legitimate, it could embolden Beijing to push its case further, despite a July international tribunal ruling that dismissed China’s historical claims.

Despite that ruling, regional governments were hedging their bets ahead of the election, with Duterte in particular aiming to heal relations with China.

LIVE AND LET LIVE If the U.S. were to “reverse pivot” out of Asia, Washington would almost certainly be less inclined to lecture about human rights abuses such as Duterte’s deadly war on drugs, which has seen more than 3,000 people killed since June, or about the military’s continuing hold in Thailand, another long-standing U.S. ally.

Such a shift would be well received by Asia’s autocrats. Thai government adviser Paisal Puechmongkol told the media that he hoped a Trump government would be less confrontational over human rights, while Cambodian Prime Minister Hun Sen said that if Trump wins, “the world will change and that may be a good situation, because Trump is a businessman so he doesn’t want war.”

In office since 1985, Hun Sen has long fended off Western criticism over clampdowns on opposition parties. His support for Trump has alarmed some in the country, but Monovithya Kem of the opposition Cambodian National Rescue Party said she believes Trump will support democratization.

“Trump’s Asia foreign policy team will likely be made up of the Republicans already involved in the region who happen to have good records on human rights issues in Cambodia for many years now,” Kem told the Nikkei Asian Review.

“If neoconservative foreign policy elites ‘come home’ to serve in a Trump administration, they might steer U.S. policy toward a more Bush-era approach in which democracy was seen — albeit simplistically — as worthy of promotion,” said Cornell’s Pepinsky.

Since appointing Reince Priebus, head of the Republican National Committee, as his chief of staff and Stephen Bannon as his chief strategist — neither of whom have expressed interest in Asia — speculation has grown about who will advise Trump on the region. One likely appointment is economist Peter Navarro, a critic of China’s economic policies. But for the most part, Chinese and Japanese officials have been left scrambling to figure out who is in charge of the president-elect’s Asia policies, even as Japan’s Prime Minister Shinzo Abe sought an early meeting on Nov. 17 with Trump.

DIMINISHED BRAND? But even if Trump’s team retains democracy promotion as part of U.S. foreign policy, will anyone listen? After the most divisive election campaign in decades, tens of thousands of Americans have protested and rioted against the winner in cities across the country, prompting international concerns about an increasingly divided superpower.

During his campaign, Trump called Mexicans “rapists,” appeared to mock a disabled reporter, threatened to ban Muslims from entering the U.S., and faced accusations of sexually assaulting women.

Clinton was subject to an FBI investigation over her use of a private email account while working as secretary of state, while a foundation run with her husband, former President Bill Clinton, was suspected of soliciting cash from foreign governments in return for contacts in the U.S. government.

China crowed over the debacle. “The innumerable scandals, rumors, conspiracy theories and obscenities make it impossible for a person to look away,” said state media outlet Xinhua News Agency.

Alongside its unrivalled economic and military strength, the U.S. has relied on intangible “soft power” to influence other countries. Joseph Nye, the Harvard University scholar who coined the term, calls it “the ability to get what one wants through attraction rather than coercion or payments.”

But Nye noted that American prestige in Asia has been undermined. “The lack of civility in the presidential debate and the nativist, xenophobic nature of a number of Trump’s statements have already had a negative effect on American soft power in Asia and elsewhere,” he told the Nikkei Asian Review.

TRADING PRESTIGE Trump’s aversion to free trade agreements could further undermine America’s appeal in Asia. Obama vigorously pushed the Trans-Pacific Partnership trade agreement with 11 countries in Asia-Pacific and the Americas, including Brunei, Japan, Malaysia, Singapore and Vietnam.

Obama hoped that a successful TPP would convince more countries to join, but doubts were already surfacing before the election after both Trump and Clinton spoke out against the proposal.

Ahead of the election, Indonesian Trade Minister Enggartiasto Lukita told an audience of American investors that Jakarta was “studying” the pact. “We want to join the TPP, but we wonder about the U.S.,” he noted.

Prospects for U.S. ratification of the TPP are virtually zero under the new administration. “The Trump administration will reverse decades of policies that have pushed jobs out of our country,” according to the president-elect’s transition website, echoing Trump’s populist anti-globalization campaign message. “In its current guise, the TPP agreement cannot come into force without U.S. involvement,” Malaysian Prime Minister Najib told the Nikkei Asian Review.

With the TPP apparently dead, signatories are already making plans. “If the next U.S. president won’t finalize the TPP, it won’t affect Vietnam’s plans for economic growth, world economy integration or globalization,” said Do Thang Hai, Vietnam’s deputy minister of industry and trade.

Trump’s view that free trade has undermined U.S. industries and shifted jobs to lower-wage countries helped swing the election his way in midwestern states such as Ohio and Wisconsin.

Asian businesses are coming around to the reality that a more protectionist America under Trump could have economic implications for Asia-based factories making apparel and parts for smartphones.

Taiwan Semiconductor Manufacturing Co. Chairman Morris Chang acknowledged ahead of the election that “globalization and free trade have made shirts and shoes cheaper, but they have also made jobs disappear.”

Arup Roy, research director at information technology research and advisory company Gartner said that Trump’s protectionist views would dampen growth prospects for IT if these “were to crystallize into some serious policy implementations.”

CHINESE WHISPERS According to his economic adviser Stephen Moore, Trump will cut U.S. corporate tax from 35% to 15% to induce manufacturers to relocate to the U.S. The president-elect may also take a harder line with China over trade and currency valuation disputes.

Paul Ashworth, chief U.S. economist at Capital Economics, said that “on trade, we expect Trump to start by labeling China a currency manipulator and to bring a number of perceived disputes to the WTO [World Trade Organization].”

Higher American tariffs on Chinese exports could hurt manufacturers in China, which in turn could re-impose restrictions on rare-earth minerals, over which it has market dominance and which are vital to the scattered supply chains making smartphones such as the Apple iPhone.

China’s President Xi Jinping congratulated Trump on his win but did not mention trade. Later, describing a phone conversation between Xi and Trump, the incoming president’s team said on Nov. 14 that “President-elect Trump stated that he believes the two leaders will have one of the strongest relationships for both countries moving forward.”

The hard talk was left to Chinese foreign ministry spokesperson Lu Kang, who pointedly emphasized that trade had “benefited the people on both sides, including the American people, and has increased employment, rather than the opposite.”

THE WORLD WAITS The world’s eyes are now on Trump to see how far he goes in translating stump speeches into action — whether he will be the confrontational personality of his days on “The Apprentice,” a U.S. reality TV show, or fall back on the deal-making and compromises of his decades in business.

“The U.S. should seek to develop strategic partnerships with the major powers of the world — Russia, China, India, Indonesia, Brazil — towards a more stable political order,” Jose Ramos-Horta, former president of East Timor, told the Nikkei Asian Review.

Trump’s part-reversal of a campaign promise to ditch Obama’s signature health plan suggests that at least some of his outlandish campaign rhetoric will not become policy. But Trump has said he will go ahead with proposals to deport millions of immigrants and build a wall along the U.S.-Mexico frontier.

“Will we see a pragmatist who moderates his rhetoric and actions, or will we see the continuation of the outrageous candidate?” asked Harvard’s Joseph Nye. “Too soon to tell.”

With reporting from Nikkei Asian Review chief editor Gwen Robinson and editor-at-large Ken Koyanagi in Bangkok and Nikkei staff writers Tomomi Kikuchi in Singapore, Debby Wu in Taipei, Kentaro Iwamoto and Cheng Ting-fang in Tokyo, Rosemary Marandi in Mumbai and CK Tan in Kuala Lumpur.

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