KUALA LUMPUR: Malaysia is set to be the biggest winner from Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), said Moody’s.
The agency said according to Peterson Institute for International Economics (PIIE), this is because real income effects of CPTPP would be the highest for the country.
“The deal will provide export access for Malaysia into new markets including Canada, Peru and Mexico, benefiting palm oil, rubber and electronics exporters,” it added.
For all members, Moody’s said the trade deal will boost exports and incomes and help to sustain reform efforts in a number of countries, a credit positive.
However, the gains from CPTPP will be smaller without US participation, it said.
Moodys said, citing PIIE, CPTPP will generate real income gains of US$157 billion for member countries, compared with US$465 billion from the original TPP.
“The lost trade opportunities will be felt most in Vietnam (B1 positive), Malaysia (A3 stable) and Japan (A1 stable) because these countries stood to gain the most from greater access to the US market given the scope of current trade agreements,” it said.
Moody’s said the corresponding increases for Malaysian and Japanese exports versus the case without CPTPP are between eight per cent and nine per cent, lower than the 20 per cent-plus gains that greater access to the US market would have allowed.
Nevertheless, the reduction in tariff and non-tariff barriers will still boost exports and trade for all participating countries, Moody’s added.