KUALA LUMPUR, March 9 ― Malaysia is likely to benefit the most from today’s new trade deal involving 11 countries on both sides of the Pacific Ocean, according to international ratings firm Moody’s Investors Service.
It pointed to analysis from the Peterson Institute for International Economics (PIIE) that showed Malaysia nudging Vietnam from the top spot in the newly-inked Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which replaced the previous Trans-Pacific Trade Partnership (TPP) after the US pulled out.
“Malaysia will be the biggest winner from CPTPP, according to the PIIE analysis.
“The deal will provide export access into new markets including Canada (Aaa stable), Peru (A3 stable) and Mexico (A3 negative), benefiting palm oil, rubber and electronics exporters,” Moody’s said in a statement.
Based on PIIE information, Moody’s said the CPTPP will generate real income gains of US$157 billion for member countries, compared to US$465 billion from the original TPP.
It further remarked that the lost trade opportunities will be felt most in Vietnam, Malaysia and Japan “because these countries stood to gain the most from greater access to the US market given the scope of current trade agreements”.
Though Moody’s noted that the gains from the new deal will be smaller without the US, it said the agreement “will still boost exports and incomes for all members and help to sustain reform efforts in a number of countries, a credit positive”.
PIIE’s October 2017 data, which accompanied Moody’s statement, showed Malaysia will see a change of just over 3 per cent in real income under CPTPP from its 2030 baseline, the highest out of all 11 member nations.
Second highest is Singapore, with under 2 per cent change in real income.
The analysis noted that Malaysia is requesting more time to undertake reforms to bolster the commercial orientation of and competition among state owned enterprises and enhance government procurement procedures.
It pointed out that Malaysia needs to improve on its customs administration processes, mainly on its efficiency of customs clearing process so that it will make it easier to conduct trade.