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President-elect Donald Trump's surprise victory puts a question mark on the future of U.S. relations with Southeast Asia. Greeted with a mixture of both enthusiasm and apprehension by regional leaders, the only certainty moving forward is that it marks the end of any hopes for the Trans-Pacific Partnership (TPP).
A new report by the Asia Foundation cautions the President-elect that retreating from Asia would create a leadership vacuum and trigger massive destabilization of the regional order. Written in consultation with foreign policy experts from across Asia, it warns that the American presence has been essential to decades of peace and security in Asia.
So what should Southeast Asia's half a billion inhabitants expect from the incoming president?
According to John Brandon, Senior Director of the Asia Foundation's International Relations Program, the end of the TPP likely means relations with Southeast Asia start with a clean slate.
"Obama's Asian pivot and rebalance strategy ultimately proved shallow and unreliable ," says Dr. Thitinan Pongsudhirak, one of the report's co-authors and the director of the Institute of Security and International Studies in Bangkok. "His administration too often walked loudly but carried a meek stick."
" A Trump administration could strengthen and rebuild U.S. hard power in Southeast Asia . But the geopolitical engagement in the region would be spearheaded by commercial interests, with less emphasis on human rights and democracy. "
For some of Southeast Asia's strongmen, it's a welcomed prospect.
Cambodia's autocratic leader Hun Sen enthusiastically endorsed Trump prior to the election. The long-serving prime minister has regularly rebuffed U.S. accusations of his government’s corruption and human rights abuses.
Philippine President Rodrigo Duterte -- himself nicknamed the “Trump of the East” -- has been similarly admiring of the American President-elect. Back in October, Duterte stated that he was seeking a separation from the United States, a longtime ally. But following their first conversation, the Filipino leader described Trump as supportive of his bloody anti-drug crackdown, saying he "could sense a good rapport" and "had assured him of our ties to America."
Malaysian Prime Minister Najib Razak has boasted to the media of his relationship with Donald Trump, which had begun with a round of golf years ago, and after the election, was re-kindled "through a warm and productive phone conversation." But the U.S. Justice Department is also currently investigating Najib in a multi-billion dollar corruption case, entailing assets which it says are tied to “public corruption and a global money laundering conspiracy.”
Beyond a congratulatory letter, Thailand's General Prayuth Chan-ocha hasn't been so vocal a supporter of President-elect. Nevertheless, relations with the Obama administration have grown strained since the junta's coup in 2014, and the Trump presidency could enable a re-set.
But the possible consequences of Mr. Trump's foreign policy on Southeast Asian stability are larger, with many worried about what it signifies for the United States' regional staying power and influence on human rights.
In addition to treaties with the Philippines and Thailand, the United States has also become a strategic partner to Indonesia, and more unexpectedly, to Vietnam. Outside having campaigned with a distinct isolationist slant, Trump has given little clue as to how the future of those commitments will concretely look like.
And yet the timing could not be more important: " Southeast Asia’s regional peace and stability, which have been secured by ASEAN, can no longer be taken for granted ," reports the Asia Foundation. "No regional state wants to see a dominant China and absent America, nor vice versa."
Notably, Mr. Trump's policy advisers have so far delivered distinctly mixed signals as to how, exactly, his administration would face off against perceived rising Chinese assertiveness in the South China Sea.
"Trump's best strategy would be to bring in Japan and Australia to secure a realigned and more balanced region," argues Thitinan. "Japan may have to become the new U.S. in Southeast Asia's security landscape."
Another possible casualty could be the U.S.'s relationship with the Association of Southeast Asian Nations (ASEAN): a core component of Obama's Southeast Asia strategy. Already an arena of great-power conflicts with China, the lack of U.S. support would be a strong blow to the organization's aspirations for centrality in regional politics.
"Trump will want to know what the deliverables will be by attending ASEAN meetings and if he doesn't believe those deliverables to be strong or valuable enough, he might not give the same attention to Southeast Asia than Obama's administration did," comments Brandon.
"The question is will Trump value bilateralism more than multilateralism? It's possible that he will have stronger bilateral relations, but he will probably frustrate the region in not looking at things multilaterally and how he is going to look at multilateral institutions like ASEAN and the East Asia Forum."
In vowing to kill the Trans-Pacific Partnership trade pact on his first day in office, the President-elect promised instead that "the United States would negotiate fair and bilaterally beneficial trade deals that will bring jobs back to American shores."
That's unlikely to provide much comfort to states like Vietnam, for which the trade deal would have meant a predicted 11% jump of its gross domestic product (GDP) by 2025, as well as closer relations with Washington.
Trump's election is in fact already being felt in Southeast Asian markets, even before he takes office: having made clear he would push strongly for tax cuts, lighter regulations, and accelerated infrastructure spending, the market expectation is now that such policies will lead to hikes in U.S. interest rates, which triggered massive sell-offs in emerging economies in just the past month.
That proved especially brutal in Indonesia and Malaysia, where foreign investors own over 40% of government bonds.
The Malaysian ringgit has fallen by 7% since November 9th and is currently at 4.47 to the dollar. Meanwhile, the Indonesian rupiah, which had long been one of Asia's best performing currencies, started swinging wildly -- approaching an exchange rate of nearly 13,500/1 U.S. dollar.
If Trump's protectionist policies are enacted, however, those countries would feel the burn even more strongly: American goods imports from ASEAN countries totaled over 100 billion in 2015 , with the top markets being Singapore ($28.7 billion), Malaysia ($17 billion), Thailand ($28 billion), Indonesia ($19 billion), and the Philippines ($9 billion).
Even if specifically punitive measures were limited to China, Southeast Asia would still be impacted, as Chinese firms have continued to expand their already-sizeable regional production chains. As the world's premier business process outsourcing (BPO) hub, the Philippines would also be hit hard by Trump's implementing his signal promise of reduced offshoring of American jobs.
Smaller states, including Cambodia and Laos, are already mostly under Chinese economic influence. But in the case of Myanmar, the Trump presidency might spell closure of access to the Generalized System of Preferences (GSP): a preferential tariff system which was restored after the removal of American sanctions, and which the Burmese business community had expected would markedly increase exports to the U.S.
With a regional economic output in excess of $2.5 trillion, Southeast Asia is effectively the world's seventh-largest economy , and presently the fourth-largest export market for the United States. The Trump administration deciding to ignore the region or to take an overly protectionist stance would be at the peril of both Southeast Asian and American interests.
Singapore's Prime Minister had called ratifying the TPP a litmus test of American credibility, warning that the ramifications of its abandonment for U.S. foreign policy in Asia could be both harmful and long-lasting.
The TPP's likely painful death is already opening the door for China to fill that trading void: at the recent Asia Pacific Economic Cooperation (APEC) Summit, Chinese President Xi Jinping emphasized his country's “economic openness”; promising to continue expanding China's trade efforts through the Regional Comprehensive Economic Partnership (RCEP) pact.
It's a clear sign that in the face of the rising American critique of free trade, China hopes to take on the global trade leadership mantle. RCEP, which has been under negotiation for three years, would include all the ASEAN countries plus Australia, China, India, Japan, New Zealand and South Korea. The trade deal incorporates special provisions to allow lesser-developed Southeast Asian countries like Cambodia and Myanmar greater time to align their tariffs policies.
A successful RCEP agreement would not only mean that Beijing will have clinched the world's biggest-ever trade deal, but that all of Southeast Asia would fall more than ever within China's economic orbit.
