Singapore

Businessmen fear Trump will sink TPP

With the outcome of next week's United States presidential elections hard to call, many businessmen in Singapore are putting their investment decisions on ice.

Many are concerned especially about how the election result will affect the Trans-Pacific Partnership (TPP), a free trade pact signed by 12 countries that together account for 40 per cent of world trade. They include the US, Japan and Singapore.

Mr Wilson Teo, executive director of Teo Garments, said whether the TPP is passed by the US government will be a "very significant part" of his business considerations.

He has garment factories in China and Cambodia, which are not signatories of the pact, and is conscious that with the TPP, signatories such as Vietnam and Malaysia could become more competitive. "The TPP... affects our decision on where to set up our factories," he said.

OCBC economist Wellian Wiranto said Asian countries have their eyes on the TPP because of their strong trading relations with the US and reliance on exports for growth.


Americans voicing their anti-TPP stance. Many here worry over how the US election result will affect the free trade pact signed by 12 countries that account for 40 per cent of world trade. PHOTO: EUROPEAN PRESSPHOTO AGENCY

 

"If Mr Trump wins, the chances of the TPP going through can be said to be zero," he said.

As for a win by Mrs Clinton, he said there is a chance of a turnaround in her current opposing stance towards the TPP, but this depends on whether there is a climate of bipartisan cooperation in the US Congress. More market uncertainty could be in store, he warned, especially if the results of the race are close, as either side could see it as a "manifestation of so-called rigged elections, with threats of unrest".

Like many Asian countries, Singapore has strong economic links with the US. It is Singapore's fourth-largest trading partner, accounting for 8.5 per cent of Singapore's global trade last year, said the Ministry of Trade and Industry.

Both countries also concluded a free trade agreement, a deal which went into force in 2004 and allows Singapore-originating goods to enter the US tariff-free.

Notably, the US is Singapore's top foreign direct investor, with cumulative investments of $153 billion mainly in the financial and insurance, manufacturing, wholesale and retail sectors.

Mr Curtis Chin, former US ambassador to the Asian Development Bank and Asia fellow at think-tank Milken Institute, is confident of enduring bilateral investment ties, but said investments will take a hit first.

"There will certainly be an impact... as investors pause to digest the implications of an election race unlike any we have seen to date."

US Ambassador to Singapore Kirk Wagar has tried to assure businesses here. He said in an e-mail to The Straits Times that "US engagement in this world is much broader and deeper than just one person or one part of our government".

"Regardless of who is in the White House, trade will continue to grow between the US and Asia-Pacific because it is in the interest of all involved," he said. He is also confident the TPP will be ratified in the US.

A version of this article appeared in the print edition of The Straits Times on November 05, 2016, with the headline 'Businessmen fear Trump will sink TPP'. Print Edition | Subscribe