The president-elect is likely to be less dismissive of the US allies compared to Trump

by RAHIMI YUNUS / pic by BLOOMBERG

AN AMERICA under the administration of Joe Biden (picture) is expected to be more accommodative to Asia’s aspiration, experts said.

Amir Fareed Rahim, a director of strategy at KRA Group, said the main substance of US policy to continue under Biden and his administration will likely identify Asia or “Indo-Pacific” — the preferred term under Donald Trump’s presidency — as key to US interests.

“Biden will continue the US rivalry with China — this is a bipartisan position. But he will likely be less crudely confrontational compared to Trump and frame his rhetoric in terms of upholding the international order and rules.

“New areas of competition will open including over Covid-19 vaccines and technology with both sides lobbying South-East Asia and other Asian countries for support,” Amir Fareed told The Malaysian Reserve (TMR).

He said Biden will also be, personally, less dismissive of the US allies compared to Trump, who is a Republican.

The problem for the US is whether Biden will have the attention and energy to constantly engage with Asia, said Amir Fareed.

“Biden will inherit a deeply polarised US, as well as possibly hostile Senate and a Supreme Court with a clear conservative majority. So, domestic concerns may be the defining challenges of his presidency. His administration’s rhetoric will be friendly to Asia; it is just whether it will be able to pay more than lip service to it,” he added.

Tan Sri Dr Mohd Munir Abdul Majid, chairman of CIMB Asean Research Institute, said Biden will bring a more civilised style and a less strident tone in the conduct of foreign policy.

“For instance, with China, I do not think he will continue with the trade war to secure American interests (which he has said it does not), but he will still push Beijing to be compliant on intellectual property protection and on opening up China’s market, particularly in the services industry,” Mohd Munir told TMR.

For Malaysia and Asean, he said there is likely to be better, and not intermittent, engagement.

IQI Global chief economist Shan Saeed said the US economic interest remains deep with the Asean region and encouraging for American companies to benefit from the economic progression.

“Markets are moving at a very fast pace and the alchemy of the financial landscape has changed dramatically in the last 12 years. The US has a strong interest in this part of the world in the areas of oil and gas, manufacturing, technology and defence,” Shan told TMR.

He also said the US will give strong competition to Chinese companies in the region, but Chinese companies are very well positioned to leverage Asean’s growing prosperity as Asia is expected to lead the global economic recovery.

Oanda Corp Asia-Pacific senior market analyst Jeffrey Halley said Biden provisional win has been regarded positively by markets on the perception that his presidency will see America re-engage on trade and globalisation, which in turn, boost growth.

“Malaysian markets have been less exuberant than others in Asia after record Covid-19 cases raised fears about the impact on the domestic economy. Malaysian markets also appear to be weighed down by lingering political concerns on the stability of the government,” Halley told TMR.

Asian Strategy and Leadership Institute’s Centre of Public Policy Studies chairman Tan Sri Dr Ramon Navaratnam said Biden would opt for a more open, relaxed and less vindictive approach that would promote trade, industry and wealth for all.

“Do not hold a grudge against each other’s success and give the chance to everybody. That is what I think Biden would think. It is not necessary to pursue policies of dominance,” Ramon told TMR.

CPTPP

Mohd Munir said whether or not there will be a kind of permanent involvement through initiatives such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), or a revival of the TPP, remains to be seen.

He believes a greater American activism will happen first before any kind of commitment to economic associations like the CPTPP at this stage.

“There is a lot of ground to make up after Trump’s America First policy and with China’s rise. It will not be: America is back. It will be: America is beginning to come back,” he added.

Amir Fareed said it is too early to say whether Biden will revive the CPTPP, which essentially became a project during former US President Barack Obama and Hillary Clinton era.

“Domestic sentiment is perceived as having turned against free trade. If so, a Biden White House may choose to focus its energies on lobbying against the Regional Comprehensive Economic Partnership, which is perceived as China-led, rather than reconstructing the CPTPP as an alternative,” he said.

The TPP was a trade agreement between 12 Pacific Rim nations of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam, signed on Feb 4, 2016, in Auckland, New Zealand.

In light of the US withdrawal following an executive order by Trump, the TPP ministers from the remaining 11 member countries convened a meeting on May 21, 2017, in Hanoi, Vietnam, and affirmed the economic and strategic importance of TPP.

On Nov 9-10, 2017, in Da Nang, Vietnam, ministers of the 11 TPP countries reached an agreement on the core elements, the text of the agreement and way forward to implement the TPP, which was then renamed as CPTPP.

The TPP market was projected to command a US$28 trillion (RM114.52 trillion) of GDP, 37.5% of the world’s GDP, and support 800 million populations, as opposed to the CPTPP that has a combined GDP of US$10 trillion, or 13.5% of the world’s GDP, and 495 million populations.

On the trade front, Amir Fareed said countries like Malaysia will have to realise that labour and environmental concerns will no longer be overlooked by the US. “If our palm oil and glovemaking companies could run afoul of the Trump administration, what more under a Democratic one? So, adopting and internalising the best standards must be the way to go,” he said.

South China Sea

Amir Fareed said the US challenge of China’s maritime actions via its so-called Freedom of Navigation Operations, or FONOPs, will continue.

However, he said Biden’ brand of competition with China may not necessarily lead to military conflict.

“Again, this is where his perceived stability compared to Trump may help. We must also realise that China has agencies too. How it chooses to react to Biden (conflict or reconciliation) and Asean (unilateral or genuine engagement) will also determine the direction of the South China Sea,” he said.

Similarly, Mohd Munir reiterated that South China Sea is a more difficult issue to resolve as China has been pushing ahead with its claims by establishing a de facto control.

This, he said, is despite the advisory arbitral tribunal decision in 2016 stating that there is no basis in international law to its expansive nine-dash line territorial limit.

“So, the freedom of navigation programme is likely to continue to circumvent China’s control of the islets and man-made islands.

However, Mohd Munir said the brash US Secretary of State Mike Pompeo-type diplomacy of last month will not continue in the hope the temperature in relations between the two countries can be brought down.

But China will have to respond positively if a new climate in relations is to come about, he said.

Last month, Malaysian Maritime Enforcement Agency detained six Chinese fishing vessels with 60 Chinese nationals for trespassing the country’s waters off the eastern coast of Johor.

China’s military had encroached into Malaysian waters 89 times between 2016 and 2019, according to the third series of the Auditor-General’s Report 2018.

The China Coast Guard intruded into Malaysian waters 72 times, while the other incidents were committed by the People’s Liberation Army Navy.

Malaysia is committed to safeguarding its sovereign rights and interests in the South China Sea, and has called on all parties to peaceful resolutions guided by laws.


Read our earlier report here