Trump and Sanders agree on trade - and Asia is worried

US presidential candidates Donald Trump (left) and Bernie Sanders.
US presidential candidates Donald Trump (left) and Bernie Sanders. PHOTOS: AFP

You might not expect ultra-liberal Democrat Bernie Sanders to agree with blustery billionaire Donald Trump over any issue in the book, but in fact their ideologies overlap in one area - free trade.

That is, both are against it.

And that is a concern to observers in this region as many Asian economies rely on trade and are eagerly awaiting the ratification of the Trans-Pacific Partnership (TPP). The deal covering the United States and 11 Pacific Rim nations would slash tariffs and trade barriers for an enormous 40 per cent of the global economy and establish the largest free trade area in the world - if the US Congress passes it.

In the US presidential primary campaign so far, Mr Sanders has said he is against all free trade agreements, saying they have been "a disaster for the American worker". On the TPP, he has said it was "written by corporate America and the pharmaceutical industry and Wall Street".

Meanwhile, Mr Trump, the Republic front runner, has said he is open to free and fair trade, but believes existing US agreements have been badly negotiated and have caused massive job losses as a result. He has also said that if he gets elected, he would want to take steps to make US multinationals such as Ford and Apple repatriate manufacturing jobs back to the US.

And when even Democratic front runner Hillary Clinton - who, as secretary of state, worked to get the TPP off the ground - has distanced herself from the deal, one can see why many in Asia are concerned.

While the rhetoric may seem alarming to observers in Asia, experts noted that it is really just that - rhetoric.

"That's just the nature of the process and it's far too early to make any judgments about how the outcome of the elections could affect US-Asia economic relations," said Singapore International Chamber of Commerce chief executive Victor Mills. He said none of the chamber's members has talked about the ongoing US primary campaign with him, which suggests that business leaders here are taking a wait-and-see approach.

To be fair, US voters have reason to be angry about their economic situation, noted Mr John Talbott, a full-time adjunct faculty at the S.P. Jain School of Global Management.

"What we have seen in the United States is that most of the benefits of free trade have accrued to the capitalist owners of businesses and factories in the US," he told The Sunday Times.

"Everything costs less in Walmart now because 96 per cent of the goods at Walmart are made in China. That's the good news. The bad news is more and more people are unable to afford to shop at Walmart now due to a lack of jobs as factories have moved offshore."

Still, former US ambassador to Singapore Frank Lavin noted that legally, there are few steps, if any, the President could take to discourage firms from outsourcing some of their work or setting up operations offshore. 

"However, a president would have the flexibility to take affirmative steps in the domestic US market that would make it more attractive for firms to stay or to onshore in the US, such as tax or labour initiatives," he said.

Mr Steve Okun, Asia-Pacific Council of American Chambers of Commerce vice-chairman, said: "It is important to keep in mind that positions candidates take in primaries are not necessarily the positions those parties adopt when they govern."

Despite the anti-TPP comments on the US campaign trail, Mr Okun is still quite confident that the deal could still proceed.

"It is very possible that the TPP will be passed by Congress this year in the 'lame duck' session. Making that happen is a key priority of the US business community."

A version of this article appeared in the print edition of The Sunday Times on March 20, 2016, with the headline 'Trump and Sanders agree on trade - and Asia is worried'. Print Edition | Subscribe