The Trump Presidency And Its Implications for Laos
The Trump era has begun. What does this mean for the famed Pivot to Asia? Could this turn the tide on US relations? And just what does Trump mean for Laos (apart from hiring a Laotian-American designer to redecorate the White House)?
The United States and the Lao People’s Democratic Republic have significantly warmed to each other in recent years, stepping up dialogue and enhancing ties, culminating with the first visit to Laos by a standing US President last year. Obamamania gripped the nation as Air Force One touched down at Wattay Airport, and the political waves of that recent visit have not yet fully ebbed away.
Asia Foundation Country Coordinator, Nancy Kim writes:
“Laos’ economic outlook is broadly positive in 2017, with the country on track to remain one of the fastest growing economies in Asia. While the massive 70 percent increase in foreign direct investment in the lead-up to the 2016 launch of the ASEAN Economic Community is unlikely to be matched, Laos will likely continue to attract FDI from throughout Asia, as well as a new Trade and Investment Framework Agreement with the U.S. Laos is in a strong position to foster more inclusive, broad-based economic development, and in 2017 we should see the country’s new leadership reflect on domestic priorities and reinforce its commitment to the social and economic well-being of its citizens.”
It is true that Laos will continue to receive FDI from all over Asia and that this will be one of the primary drivers of its economic growth. In the past few years, we have seen well-known multinational corporations and brands expanding and entering the Lao market in cinema, hotel and restaurant business. In terms of trade with the US, according to the Office of the USTR, two-way goods trade between the two countries grew five-fold in the past 10 years to $70 million. Two-way agricultural trade grew eight-fold in the same period to $8 million.
However, it remains to be seen whether the Trade and Investment Framework Agreement signed by Minister Khemmani Pholsena and US Trade Representative Michael Froman will constitute any further major contribution to growth, especially with the uncertainty around the future foreign policy directions of President Donald Trump.
What Does the Rise of Trump Mean for ASEAN and for Laos?
Many experts have predicted that Trump’s expected foreign policy changes could potentially change the post-war international order. The new President, judging by his election promises, endeavors to reshape much of the United States’ current policy in Asia, however the degree to which he will change them is yet to be determined.
But certain things are clear: the President has advocated the re-evaluation of core aspects of US East Asian foreign policy, namely, its alliances, regional institutions and trade.
Concerning American allies in East Asia, Mr Trump has revealed that he would like America’s allies in the region (especially Japan and the Philippines) to contribute their fair share to regional security, instead of depending heavily on US military power. Consistent with this line of thought, he is expected to have little to zero patience in maintaining, in his mind, America’s costly multilateral partnerships; including institutions like ASEAN.
Unlike his predecessor, Obama, Trump may view the US relationship with ASEAN as not a long-term investment to counterbalance against Chinese influence in the region, but more of an unnecessary short-term expense to the American taxpayer, who voted him into power. To balance China, he may go at it directly: mano-a-mano.
Can ASEAN Solidarity Survive Trump’s Penchant for Bilateralism?
With a regional economic output in excess of $2.5 trillion, ASEAN is effectively the world’s 7th largest economy, and currently the 4th largest export market for the US. Thus no matter the rhetoric, the Trump administration has to tread carefully. Deciding to ignore the region or to take an overly protectionist stance would be at the peril of both Southeast Asian and American interests.
Secondly, the US, even under Trump, won’t completely shun ASEAN, some of whose members are staunch US allies. And allies will still be allies – such is the game that is international politics. However, Trump may change the way the game is played. Not being too fond of multilateralism, Trump may be more in favor of negotiating with each of the US’s Southeast Asian allies on a one-on-one basis. This is understandable, as ASEAN is known to take quite a long time to act due to its consensus modus operandi (all 10 member countries must agree in order for a decision to be made).
Given Trump’s low patience and volatile temper, bilateral partnerships may be the preferred method of engagement. Only time will tell if ASEAN Member States will be able to stay and act together as a regional grouping, as they always officially aspire, or begin to break apart in the face of Trump.
So far, ASEAN diplomats have shared that even if the US under President Trump engages less with ASEAN, the regional powerhouse can still focus on regional integration among the ten states and strengthen partnerships with key players like China, Japan, Korea, India, Australia and Europe.
Secretary of State Rex Tillerson
A senior Lao diplomat has shared with the Laotian Times that the Lao leadership and those of the ASEAN Member States have been closely following Trump’s activities, in particular his choice for Secretary of State (the US counterpart of Minister of Foreign Affairs), ex-CEO of ExxonMobil, Rex Tillerson.
“It remains to be seen whether the new American Presidential Administration headed by Trump will prove to be as bad as everyone expects he’ll be for ASEAN. With the US Senate approval of Rex Tillerson as Secretary of State, we will be facing a diplomatically inexperienced man – in a formal sense – with a fierce negotiation style that is very business-oriented. It will be diametrically different to what we had been accustomed to with John Kerry or even Hillary Clinton, who are statesmen known for their more diplomatic styles. Let us see what happens in a few months after Trump takes office,” the diplomat continues.
It is too soon to predict how Rex Tillerson will perceive US relations with ASEAN and how he will subsequently advise President Trump. But needless to say that if any one official in the Cabinet that will have the power to shape Trump’s decisions concerning ASEAN, it is Mr. Tillerson.
How does this affect Laos?
Insofar as having its interests represented in the international arena, ASEAN is essential for Laos. Given its limitations in size and development, the small nation of almost 7 million has and will continue to align its foreign policy objectives with those of its surrounding, larger neighbors. And ASEAN provides Laos with the regional clout and support with which to maneuver diplomatically. The success of Laos serving as Chair of ASEAN last year is a case in point.
In this light if ASEAN is not taken seriously by President Trump’s USA, then Laos could be at some disadvantage in dealing with the US on a bilateral basis. And the political vacuum would drive Laos to pursue even closer relations with China and Vietnam.
Laotian Times Editorial Board