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Donald Trump or Hillary Clinton — Americans must decide on Wednesday morning. And Asia is watching carefully because the policies and approaches of whoever wins the competition will have important repercussions.
No matter who wins this most dramatic presidential election race ever, there will be strong implications on the world, Thailand included.
The Republican Party has, arguably, been becoming increasingly anti-free trade since the Tea Party began putting pressure on Congressmen.
Bank of America recently released a survey of small US business operators which found they are worried about the impact of policies concerning employment and private investment.
For the medium term, a Trump victory would mean a radical change in tax, fiscal and trade policies, the latter of which would likely lead to more protectionism.
A Trump presidency would likely reduce the role of the US in Asia, which could affect trade activity in the region, said SCB EIC.
Trade and the Trans-Pacific Partnership (TPP)
In order to benefit from Asia’s enormous growth potential, President Obama negotiated the Trans-Pacific Partnership (TPP) agreement in order to promote wider free trade.
But this landmark deal is now likely to be watered down at best or even scrapped, by whoever wins the presidency.
“I think Hillary Clinton will be preferable for Thailand in the long term based on their trade policies,” said Charl Kengchon, managing director of Kasikorn Research Center (K-Research).
Mr Charl expects Mrs Clinton will not reject the Trans-Pacific Partnership (TPP) trade agreement, rather modifying it before signing to avoid damaging her reputation.
In winning the Democrat nomination, Clinton had to be seen to be skeptical of trade deals — including the TPP, which she helped introduce.
On the other hand, Isara Vongkusolkit, chairman of the Thai Chamber of Commerce, said Thailand’s trade is likely to be negatively affected if Mr Trump wins the election, given his radical campaign policies.
Wiboonlasana Ruamraksa, the commerce permanent secretary, said Mr Trump’s policies, particularly concerning tax incentives, personal and corporate income tax cuts to convince US companies to stay at home and create more jobs, import tariff hikes and opposition to the TPP agreement and the North American Free Trade Agreement, would lead to protectionism.
But as a result, an agreement could be reached later than expected, benefiting Thailand as a late participant in the deal.
But Mr Trump’s view on free trade agreements has always been negative, especially those concerning China and Mexico, which he claimed have caused Americans to lose a lot of jobs.
“If Trump really cancelled the free trade agreement with China, it would definitely affect Chinese exports to the US, indirectly affecting China’s imports of raw materials from Asean, including Thailand,” said Mr Charl.
Politics and geopolitics : “tough on China” stance could hurt Thailand
Both U.S. presidential candidates are promising to be ‘tough on China.’ This can, arguably, simply be seen as political rhetoric.
This could hurt Thailand’s position, as the military government is increasingly shifting its foreign policy from a US-centered position to mostly China’s friendly.
Nearly all candidates for decades have played this “tough” card in elections but once in power, no president can ignore the might of China’s economy and its international influence.
A Clinton victory would result in a more hawkish foreign policy, and more support for NATO, than from Trump.