Will the US president’s charm offensive pay off?
The aim was to put an end to the huge trade deficits that the US runs with many Asian nations. The deficit stood at $350 billion with China and $69 billion with Japan, to name just two countries. Trump also felt that he solicited China’s aid on the North Korean issue. According to his Twitter feed, he felt that he had “made many good friends.”
The question now is whether the trip was indeed such a success, and if his America First policy will serve the long-term geopolitical and geo-economic interests of the US in the region.
The exchanges between Trump and North Korean leader Kim Jong Un are still dangerously hot. The last thing Asia needs is a nuclear war in an area that is as densely populated as the triangle between China, South Korea and Japan.
There was progress made in as much as China is sending a high-level envoy to North Korea for consultations. Beijing’s historic relationship with Pyongyang gives it probably more leverage over the flamboyant North Korean dictator than any other nation. Only time will tell if this effort can be successful.
Whereas $300 billion worth of contracts is a staggering amount, only time will tell again how many of the so-far unbinding contracts will actually result in purchases of American merchandise, and in what timeframe.
Trump was on a charm offensive. He politely repeated again and again that the trading relationships between the US and its Asian partners had to become more equitable. But he refrained from delving into detail, just mentioning via Twitter that upon his return he would “make a major statement from the White House.”
With China, for instance, two of the major issues are intellectual property rights and market access. These subjects were not broached, and are bound to flare up in the coming months. The South Korean leadership was less than thrilled that Trump is reneging on the five-year old US-Korea Free Trade Agreement despite his dislike of multilateralism in favor of bilateral trade pacts. But he made no apparent headway in that direction with any of the countries he visited during this trip.
Upon assuming the presidency, Trump’s first act was to tear up the Trans-Pacific Partnership (TPP), which was an important trade agreement between the US and 11 Pacific Rim countries. It took years to negotiate. China was notably not a member of this trade pact, which was and is significant, because many Asian countries look with unease at China’s economic and geopolitical assertiveness.
It remains to be seen whether Donald Trump’s America First policy will serve the long-term geopolitical and geo-economic interests of the US in Asia.
They are as wary of Beijing’s ambitions in the South China Sea as they are anxious about the One Belt One Road project or China’s alternative to the TPP: The Regional Comprehensive Economic Partnership. This construct includes 16 Pacific Rim countries, notably without the US or Canada.
So concerned were the remaining 11 TPP signatories that they decided to go ahead and forge the Comprehensive Progressive Trans-Pacific Partnership, which is the TPP minus the US. They did so right under Trump’s nose during the Asia-Pacific Economic Cooperation (APEC) meeting in Vietnam, which he attended.
Reneging on the TPP may cost the US a lot of influence in the region, and make it difficult to put checks and balances in place to counter China’s ever-growing power. Over the past four decades, the US was a force for good in the region, a guarantor of peace and stability, and a supporter of a level playing field.
The new direction of US foreign policy will force most Asian leaders other than China to rethink how they want to balance power. We are at the beginning of this journey, and await Trump’s announcement on trade. Stay tuned.
• Cornelia Meyer is a business consultant, macroeconomist and energy expert. Twitter: @MeyerResources
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