THAI ECONOMIC policymakers and business leaders should adopt a wait-and-watch attitude towards the incoming Trump administration’s trade and related policies, though free trade would still be a key component of the new government’s policies, US Ambassador Glyn Davies said.

Davies, who has been Washington’s top diplomat in Bangkok for the past 15 months, said at a roundtable with Thai media that US President-elect Donald Trump, who will be sworn in on Friday, is expected to seek good policy solutions once his new administration takes office later this week.

The envoy believed the 12-country Trans-Pacific Partnership (TPP) free-trade pact would likely be scrapped as suggested by Trump during his election campaign.

TPP groups together Singapore, Malaysia, Vietnam and Brunei among Asean countries, besides the US and Japan and other Asia-Pacific countries.

Although it is difficult to say how the new US administration will spell out its trade and related policies at this stage, Davies assured that free trade between the United States and the rest of the world would continue.

Asked if the Kingdom should be worried about a potential trade war between the US and China, which could affect Thai exports indirectly, he said there should be no worries, stressing that continued engagement with allies and trade partners was a key element of US diplomacy.

The United States accounts for more than 10 per cent of Thailand’s total exports, while the Kingdom also exports a large quantity of parts and components to China as part of the global supply chain for end products destined for the US market.

As for direct Thai exports to the US, Thai policymakers are concerned about increased protectionism under Trump, but noted that there could be both negatives and positives from the new US policies.

For instance, Trump’s promise of tax cuts and infrastructure investment policies could lead to stronger US economic growth, resulting in higher demand for imports.

However, Trump has threatened to slap significant import tariffs on Chinese imports, raising the spectre of a potential economic war between the world’s largest and second-largest economies.

Though no official policy direction will be forthcoming until after the presidential inauguration, it is speculated that the Trump administration would pursue trade, security and other related policies that would better serve US interests.

On trade policies, it is likely that the direction would lean more towards bilateral deals rather than regional and multilateral free trade agreements, but it remains unclear how the Trump-led government will arrive at the many paths leading in that new direction.

Davies, however, said that Thailand and other Asian allies would remain important to the US due to their dynamic emerging economies.

While the tone and style of President-elect Trump is different from his predecessors, the transition would be peaceful, he assured.

In relation to Thailand, the envoy said the US hopes Thailand would return to the democratic path quickly based on the junta’s road map.

He also expressed support for further bilateral cooperation aimed at helping Thailand modernise with digital and other technologies based on the government’s “Thailand 4.0” strategy. The United States also hopes to play a crucial role in helping to upgrade the education sector.

Next year, the US and Thailand will celebrate 200 years of diplomatic relations, which were started during the reign of King Rama II.