After the inaugural oath ceremony of Pres. Barack Obama becoming the 44th President of the United States on Tuesday, January 20, 2009, his new government expects to rapidly push his economic stimulus package costing USD825 billion into enforcement. The US Congress expects that it will drive the FY2009 budget deficit up to USD1.2 trillion, which would be the highest level since 1980. The US injecting this enormous budget into their economic system may also force them to impose a number of trade barriers to ensure that they spend more of it within the US.
The newspaper USA Today estimates that if the US government injects USD1 trillion into their economy, the US GDP would be increased by around USD1.8 trillion. Moreover, if the government increases Customs tariffs on certain import categories, money circulating in the US would rise to as high as USD2.8 trillion. Previously, US trade barriers were typically non-tariff measures such as campaigning for the American people to buy domestic products, and recently, giving subsidies to the Big Three American automakers, plus a new farm subsidy package. However, the US has not used tariffs as extensively as other countries such as India.
The trade policies of the Obama administration will affect both bilateral and multilateral trade liberalization policies toward our country because the new US President has announced his intent to enforce measures that protect US domestic industries. He would also resist any FTA agreements that harm US domestic employment, differing from the trade liberalization policies espoused by the former administration. Meanwhile, President Barack Obama will likely carry out more proactive strategies toward foreign markets to reduce imports to the US and thus affect the US trade deficit. Nonetheless, a recent drop in the US's chronic trade deficit with China will likely reduce pressure upon China and other trade partners to allow more access for US exports. It is expected that President Barack Obama will recognize Thailand's greater role in the region, due to healthy economic expansion of ASEAN, greater influence of China and India in the region, and the upcoming ASEAN Community deceleration in 2015. In addition, Thailand will continue serving as ASEAN Chairman until the end of this year, and has played an important role in the region for many years.
KASIKORN RESEARCH CENTER (KResearch) views that the Thai government should place a priority on economic promotion within the region, particularly within ASEAN and ASEAN+3, in order to maintain trade opportunities and regional financial stability. If our authorities work toward swift global adoption of Doha Round concepts in world trade negotiations, Thai entrepreneurs would benefit from such WTO-based liberalization than with a Thai-US Free Trade Agreement (TUSFTA) because the broad international agreements would more comprehensively help lower trade barriers that are being erected or fortified globally this year. In addition, the Thai government could improve economic relationships with the USA in the form of bilateral agreements such as their Trade and Investment Framework Agreement (US-TIFA), and urgently upgrade production standards and workforce productivity to achieve quality in our products exported to the USA.
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