Kuala Lumpur, November 17 (VNA) - The signing of the Regional Comprehensive Economic Partnership (RCEP) is a notable success of the 37th ASEAN Summit, bringing both opportunities and challenges to Malaysia and Vietnam, according to a Malaysian expert.
According to Professor Yeah Kim Leng, Senior Fellow and Director of the Economic Studies Programme at the Jeffrey Cheah Institute on Southeast Asia at Sunway University, as the world’s largest trade bloc, the further tariff reduction, trade facilitation and market access are expected to result in further output and efficiency gains, as well as higher consumer welfare that results from lower prices and wider choices of goods and services, for the 15 signatory members.
“Trade and investment flows among the bloc members will be further strengthened as investor confidence is being enhanced by the commitment to free trade and market access under RCEP,” he said.
Yeah stated that both Vietnam and Malaysia will be among the key beneficiaries as they have sizeable export-oriented industries and foreign direct investment stock. While some industries within each country will face higher import competition, the overall gains in economic efficiency will outweigh the negative effects arising from the decline of industries that are unable to compete.
“With appropriate industrial adjustment policies in place to assist the affected industries, these losses can be minimised while the majority of the population gain from higher economic efficiency, more integrated regional supply chains and higher demand generated by sustained income and job growth,” he noted.
For most sectors already exposed to international and regional competition, both the Malaysian and Vietnamese economies will need less industrial adjustments and government intervention to counter any negative side-effects of RCEP, he added./.
According to Professor Yeah Kim Leng, Senior Fellow and Director of the Economic Studies Programme at the Jeffrey Cheah Institute on Southeast Asia at Sunway University, as the world’s largest trade bloc, the further tariff reduction, trade facilitation and market access are expected to result in further output and efficiency gains, as well as higher consumer welfare that results from lower prices and wider choices of goods and services, for the 15 signatory members.
“Trade and investment flows among the bloc members will be further strengthened as investor confidence is being enhanced by the commitment to free trade and market access under RCEP,” he said.
Yeah stated that both Vietnam and Malaysia will be among the key beneficiaries as they have sizeable export-oriented industries and foreign direct investment stock. While some industries within each country will face higher import competition, the overall gains in economic efficiency will outweigh the negative effects arising from the decline of industries that are unable to compete.
“With appropriate industrial adjustment policies in place to assist the affected industries, these losses can be minimised while the majority of the population gain from higher economic efficiency, more integrated regional supply chains and higher demand generated by sustained income and job growth,” he noted.
For most sectors already exposed to international and regional competition, both the Malaysian and Vietnamese economies will need less industrial adjustments and government intervention to counter any negative side-effects of RCEP, he added./.
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