Could the policies of US President Donald Trump (unwittingly) spark an emerging market debt crisis?
AFP photo/ Mandel Ngan
Could the policies of US President Donald Trump (unwittingly) spark an emerging market debt crisis? AFP photo/ Mandel Ngan

Outgoing US President Barack Obama’s “pivot” policy, a strategy that aimed to decouple America from the quagmires of the Middle East in favor of deeper economic and strategic engagement with East Asia, may or may not survive under the incoming Donald Trump administration. How Trump approaches Philippine President Rodrigo Duterte will send a clear first signal on whether he plans to adopt or scrap the pivot, widely viewed as a US bid to contain and counter China’s regional rise.

Trump’s neo-isolationist rhetoric, unilateralist leanings and vehement opposition to the Trans-Pacific Partnership trade pact, the core economic component of Obama’s pivot, has put into question the future of America’s rebalancing towards the region. In his inauguration speech, the new US president extolled the virtues of protectionism, putting forward a “buy American, hire American” populist agenda, apparently to the detriment of the prevailing US-backed liberal international order.

In a similar tough-talking manner, Duterte has pulled the Philippines closer than ever to China during his first six months in office. Instead of serving as a strategic node in a broader American-led regional strategy to contain China, Duterte, dubbed by some as the “Trump of the East”, has instead threatened to end Manila’s century-old alliance with Washington, mainly due to vehement disagreements on human rights issues related to his controversial war on drugs campaign.

With early signs Trump may de-emphasize rights and democracy promotion in his foreign policy, Duterte and Trump could be poised to reset ties. According to official Philippine sources, both sides aim to leverage improved communication channels, pragmatic engagement on human rights concerns, and personal rapport between their respective leaders to end the deepest diplomatic crisis in bilateral relations in recent memory.

As America’s first “Pacific president”, Obama made more trips to Asia than any of his predecessors. He regularly attended regional summits, appointed for the first time a permanent ambassador to the Association of Southeast Asian Nations (ASEAN), and held intimate summits with both China and ASEAN leaders at the picturesque Sunnylands retreat in California.

At the same time, America witnessed an unprecedented deterioration in bilateral ties with its oldest Asian ally and key strategic partner, with Duterte personally insulting Obama in undiplomatic tirades. As verbal exchanges festered, Duterte has repeatedly threatened to end his country’s alliance with America, while simultaneously embarking on an unprecedented rapprochement with China and Russia. In October, barely four months into office, the Filipino leader made a crucial state visit to China, where he announced his ‘separation’ from America in favor of joining China and Russia’s “ideological flow.”

Combination image taken on September 5, 2016 shows, at left, US President Barack Obama speaking at a G20 summit press conference in Hangzhou, China, and at right, Philippine President Rodrigo Duterte speaking during a press conference in Davao City, the Philippines. Photo: AFP / Saul Loeb and Manman Dejeto 

Over the succeeding months, his administration scaled back joint military exercises with America, which, in turn, held back shipment of firearms to the Philippine National Police and postponed the renewal of a $400 million Millennium Challenge Corporation (MCC) aid package. Duterte is scheduled to visit China and meet leader Xi Jinping again in May to attend an international cooperation summit meeting on China’s “One Belt, One Road” initiative.

Soon after Trump’s electoral victory became apparent, however, Duterte began to sing a different diplomatic tune. “I don’t want to fight now that Trump’s there. I would like to congratulate President Trump,” Duterte declared, half-jokingly, shortly after the November election results were announced. “May you live, Mr. Trump! We both curse at the slightest of reason. We are alike.”

Duterte has since consistently expressed his preference for Trump over Obama, and how he looks forward to restored relations under his administration. Manila’s optimism rests on a number of factors. First and foremost, the Duterte administration expects its new American counterpart to be more pragmatic and conciliatory on human rights issues, the fundamental bone of contention with Obama’s outgoing regime.

In fact, the Filipino leader claimed after a brief and apparently warm telephone conversation that Trump supports his controversial war on drugs. (The Trump transition team has not denied it, according to local reports.) Manila was further encouraged by new US Secretary of State nominee Rex Tillerson’s repeated refusal to criticize Duterte on human rights during a confirmation hearing earlier this month at the US Senate.

Policemen in the Philippines investigating a crime scene on September 1, 2016, where a body lies dead on the ground after the police received a message from a concerned citizen of the existence of a drug den in the area. Two were captured alive, one died. Photo: AFP / Noel Celis

Reluctant to challenge China in the South China Sea, where the two sides have wide-ranging territorial disputes, Duterte apparently welcomes, albeit quietly, Trump’s early promise to push Beijing back in the maritime area. Duterte has made it clear that he could reverse Manila’s policy and redouble military cooperation with America, including in the disputed waters, if China moves ahead with unilateral exploitation of minerals and resources in Philippine-claimed waters.

In that direction, Duterte strategically appointed Jose Antonio, the owner of Trump tower in Manila, as his special envoy to Washington. The move apparently aims to leverage Antonio’s pre-existing business ties with the new first family, which seems ready to mix business and diplomacy. While bringing together two bigger-than-life and mercurial characters like Duterte and Trump is hardly a recipe for certainty, Duterte’s initial positive response to Trump’s rise signals a diplomatic reset could be on the cards.

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