Illustrative image (Source: VNA) Though the dissolution of the pact is a “material” loss to export-driveneconomies such as Vietnam, investments made in anticipation of the TPP areunlikely to be reversed and will continue to bolster growth in the years tocome, Moody’s said in a report titled “Sovereigns - Asia Pacific: US exit fromTrans-Pacific Partnership represents lost opportunity for Asia”, released onFebruary 2.
Moody’s cited research by the Peterson Institute for International Economics(PIIE), which has ranked Vietnam and Malaysia among the countries in the listof 12 TPP signatories that expected to see a sizeable growth spurt. The twocountries would have benefited from trade with the United States and fromlarge, long-term foreign direct investment inflows.
The PIIE research found that the Vietnamese economy – measured by real incomein 2015 in US dollars – would be 8.1 percent larger in 2030 compared to abaseline without the TPP, while Malaysia’s would be 7.6 percent bigger.
The termination of the TPP could slow the momentum for reforms that the dealhad fuelled. Moody’s said the pact went beyond existing free trade agreements(FTAs) by setting standards in areas including intellectual property rights,government procurement, environmental and labour conditions, and corruptionprevention, in addition to reducing or eliminating tariffs and non-tariffbarriers.
The agreement would also have improved trade access - even where agreementsalready existed - to some hitherto protected markets, such as Japan’sagricultural products.
The significance of the deal is testified by its scope and size - the TPPsignatory economies account for about 40 percent of the global GDP.
Several TPP signatory countries are now workingon other trade deals such as the Regional Comprehensive Economic Partnership(RCEP) – with the exception of the Free Trade Area of the Asia-Pacific (FTAAP)agreement – but the benefits from these trade deals will be smaller than thoseof the TPP, as they will cover a smaller share of global trade, overlap withexisting arrangements and be narrower in scope.-VNA
VNA
