US election: Will it be business as usual for Asia?

Barring any legal challenges over a close vote, as of press time in Bangkok, we should now know Americans’ choice of which presidential candidate they want to lead their country. Although domestic issues such as unemployment, healthcare and education dominated the campaign, the election is bound to have an impact globally, regardless of who won.

The two candidates touted different visions of America’s future. Barack Obama tilts towards “big government”, with more control from the federal centre. Mitt Romney wants less regulation, so states and individuals can make more decisions over their destinies.

A second term for President Obama will mean the continuation of policies from his first term. But Obama’s second term will be different from what he inherited four years ago: the Democrats controlled Congress and held onto it until midterm elections in 2010. Now, Obama must not only convince Congress to agree to his agenda, but also prove to American voters that he still represents positive change. He can no longer blame a previous administration for the economic ills of the country.

A Republican President Mitt Romney will likely focus on economic policy. He has promised to turn around the economy by creating jobs and pressing other countries, especially China, to ensure fair trade. Although Romney says he knew how to fix the economy, the US recovery will be difficult to bring about, especially with spending cuts across the board expected in January – the dreaded “fiscal cliff”.

Based on concerns addressed during the campaign, whoever won the election will have to place high priority on boosting the economy, because the most critical issue for Americans now is high unemployment. The question is how the president will steer a course to economic recovery. And here’s where the vision and beliefs of each candidate will be played out. Romney hopes his tax cuts will have multiple effects on the economy by reducing costs for entrepreneurs. Obama wants to raise taxes on the rich to reduce the widening gap between haves and have-nots.

When it comes to external trade, Obama’s policy is likely to cater to the primary Democratic constituency, which is the working class. Obama criticised his opponent for wanting to provide tax benefits for companies that outsource jobs to India or China. Romney wants to put pressure on China to stop currency intervention, to create a balanced playing field for US producers.

In spite of the rhetoric during the campaign, when it comes to Asia there might be no big difference in who sits in the Oval Office. Compared to security issues elsewhere in the world, US relations with Asia were not seriously discussed during the presidential debates. However, what Asian countries can expect from either winner is the continued re-emergence of US interest in the region, both politically and economically.

The new president is likely to continue the Obama administration’s policy of increasing the US military presence in Asia and the Pacific. Some countries, such as the Philippines, welcome the US “pivot” to Asia, while others, such as Thailand, have mixed feelings, fearful of offending China. In addition, it remains to be seen what role the US will play in the context of rising territorial disputes in the South China Sea and East Asia. 

Economically, Asian markets remain an attractive destination for Americans, especially now that the European Union is struggling with the euro-zone crisis. Free-trade agreements in Asia are thus likely to be on the table. Romney mentioned establishing free trade with Latin American countries. It can also be assumed that the White House, regardless of its occupant, will continue pushing the Trans-Pacific Partnership Agreement that was mooted in 2005.

Both candidates wanted fairer trade with America’s partners. Obama blamed high US unemployment partly on the outsourcing of jobs to China and India. Romney, in the name of free and fair trade, promised to press China on currency manipulation, which he claimed has eroded the competitiveness of US products. Romney also sees the violation of American intellectual-property rights as a major concern.

These are among the issues that Asian partners will have to work on with whoever was elected. The US has been, and will continue to be, a key partner in the region. What happened in the election will determine the direction of US relations with its Asian partners.