KUALA LUMPUR: Malaysia will follow Vietnam as a close second in terms of biggest long-term beneficiaries from the recently concluded Trans Pacific Partnership says Credit Suisse.
Vietnam could see a 10 per cent boost to GDP by 2025, while Malaysia could see a 5 per cent boost while Singapore is likely to be a relatively smaller beneficiary.
The TPP covers 12 countries - Australia, Brunei, Japan, Malaysia, New Zealand, Singapore, Vietnam, the US, Canada, Mexico, Peru and Chile.
Economist Michael Wan from the Singapore-based research house, expects the manufacturing sector to be the biggest beneficiary in Vietnam and Malaysia.
While there could be a slight negative impact on non-TPP Asian countries, the benefits could be sizeable if these countries eventually join the TPP, with GDP boosts ranging from 2 per cent to 7 per cent.
"The impact on non-TPP Asian countries is likely to be slightly negative due to diversion of trade flows and FDI,"he said, adding that the negative impact should generally be quite small and limited as a share of their GDP.
For instance, Thailand is forecast to see just 0.4 percentage points GDP shaved off by 2025, and China 0.2 percentage points during the same period.
The Philippines could see a 6.4 per cent boost to GDP by 2025 and Thailand could see a 7.6 per cent boost to GDP should they join.
Based on a Peterson Institute study, sectors which could gain the most include Vietnam's textiles, apparel and footwear, electronics, and construction, Malaysia's electronics, apparel and footwear and Singapore's machinery and transport-related sectors.
Fitch Ratings said while the TPP will be a significant contributor to economic integration over the long term, it is unlikely to be a game changer for the economic prospects in the short term.
"Should the TPP be ratified, the most significant consequence will be in setting the rules and guidelines under which economic integration deepens around much of the Pacific Rim.
"This will, in turn, set a powerful precedent for other global trade and investment protocols."
While the TPP would likely be positive to varying degrees for those within the pact, it may divert trade and investment from non-participating countries.
The net impact on global activity may be small as increased trade within the TPP is offset by trade diverted from countries outside the bloc.
One study estimated a gain in global GDP of about 0.3 per cent relative to a baseline without the deal by 2025.
Within APAC, China, Thailand, Philippines, Korea and Indonesia are notable non-participants for now.
"Countries such as Thailand and Indonesia, which have been looking to boost foreign investment and exports, may come under pressure to join TPP should FDI and trade flows from Japan and the US shift to member countries such as Vietnam and Malaysia."