GREATER MARKET ACCESS
MALAYSIA will be the biggest winner of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which was signed by 11 nations on Thursday. Moody’s Investors Service says the country stands to benefit the most in terms of real in
MALAYSIA will prove to be the biggest winner from the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), according to Moody’s Investors Service.
The rating agency said Malaysia stood to benefit the most from CPTPP in terms of real income effects.
Moody’s said based on an analysis from the Peterson Institute for International Economics (PIIE), the trade pact would provide Malaysia with export access into new markets such as Canada, Peru and Mexico, benefiting its palm oil, rubber and electronics exporters.
PIIE’s data from October last year also showed Malaysia would see a change of just over three per cent in real income under CPTPP from its 2030 baseline, the highest out of all 11 member nations.
Moody’s said CPTPP would also boost exports and incomes and help sustain reform efforts in a number of countries, which would be a “credit positive”.
However, the gains from CPTPP would be smaller without the participation of the United States, it added.
Citing PIIE, Moody’s said CPTPP would generate real income gains of US$157 billion (RM613.87 billion) for member countries, compared with US$465 billion from the original Trans-Pacific Partnership.
“The lost trade opportunities will be felt most in Vietnam (B1 positive), Malaysia (A3 stable) and Japan (A1 stable) because these countries stand to gain the most from greater access to the US market, given the scope of current trade agreements,” it explained.
Nevertheless, the reduction in tariff and non-tariff barriers will still boost exports and trade for all participating countries.
With the agreement now signed, the CPTPP can enter into force 60 days after six of the signatories ratify the pact.