Analysis by the Peterson Institute for International Economics (PIIE) finds that the CPTPP will generate real income gains of US$157 billion for member countries, compared with US$465 billion from the original TPP. However, the absence of US doesn’t stop the deal generate numerous benefits on trade and export to the rest eleven members.
Instead, without US, Malaysia would be biggest winner Malaysia will be the biggest winner from CPTPP, according to the PIIE analysis. The deal will provide export access into new markets including Canada, Peru and Mexico, benefiting palm oil, rubber and electronics exporters.
Meanwhile, Moody’s affirmed in its report that, lower trade and non-trade barriers under CPTPP are conditional on country-specific reforms.
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“We expect ongoing reform efforts to boost competitiveness and investment, and strengthen institutional quality over time for member nations. The benefits would be greatest for those sovereigns with relatively low governance and competitiveness scores currently, such as Peru, Vietnam, Mexico and Brunei”, cited analyst Matthew Circosta of Moody’s.
Specifically, according to the firm, while the deal provides New Zealand's agricultural a greater access to the Japanese market, it also offers Japan with its first high-level multilateral FTA, hence along with potential for stronger Japanese auto exports.
For Vietnam’s part, Moody’s affirmed that Vietnam economy would benefit from better access to markets of Canada, Mexico or Peru. “Lower tariff barriers will also give Vietnam greater export access to Japan and Australia. Vietnam's exports of garments and textiles, leather and footwear, and other labour-intensive industries are poised to reap the biggest benefits.” spoken data from Moody’s.
The brief review of World Bank released today show that, the CPTPP would contribute to add an increase of 1.1% for Vietnam’s GDP by 2030. Besides, according toPIIE, Singapore already has trade deals with eight CPTPP countries. Nevertheless, Singapore's exporters will benefit from new preferential trade access to Canada and Mexico, and unprecedented access to Japan, Australia, New Zealand, Chile and Peru.
According to Pham Hong Hai, General Director of HSBC Vietnam, with the US absence in the CPTPP, Vietnam’s benefits may be less than the TPP. “However, in general, industries like garments and textiles, leather footwear and labour intensive ones will still benefit. Vietnam will be able to take advantage from accessing to member markets of the deal, especially those on the other side of the Pacific like Canada and Mexico”, specified Hai.
New data from HSBC’s comprehensive survey of global businesses shows that,63% of Vietnam firms expect positive impact from new trans-pacific trade deal. Of 1,150 firms based in CPTPP member countries surveyed by HSBC, almost half (46%) expect to see positive benefits.
Nonetheless, observers warn that the suspension of specific provisions could slow reform progress in some countries. “Although Vietnam is making progress on advancing labor reforms, the government is seeking more time to implement internationally compliant labor laws, such as introducing minimum wages and work conditions.”, according to Moody’s.
Accordingly, Canada will continue to protect its cultural industries such as films, television and music, while Malaysia is requesting more time to undertake reforms to bolster the commercial orientation of and competition among SOEs and enhance government procurement procedures.
However, for Vietnam, the signing of the CPTPP and the recently concluded FTA with the European Union underscores increasing government effectiveness, and will contribute to a more conducive environment for doing business, further supporting FDI inflows.
