TPP positive deal for Asian economies says Moody's

10/13/2015 3:45:18 AM

(MENAFN- The Journal Of Turkish Weekly)The Trans-Pacific Partnership (TPP) for which negotiations ended last week will be credit positive for all 12 participating sovereigns especially those in the Asiaregion according to a report published Monday.

In "Trans-Pacific Partnership to Bolster Trade and Growth a Credit Positive"Moody's Investors Service outlines howthe deal will reduce the cost of trade and open up new investment opportunities while supporting regional growth.

The trade pact will increase market access lower or eliminate tariffs and set standards in areas including intellectual property rights environmental and labour conditions and government procurement said Moody's.

While the full text of the agreement has yet to be published the TPPis understood to grant Asian companies greater access to the United States for their goods and should help make them the biggest beneficiaries in gross domestic product-relative terms.

"Vietnam's apparel and shoe manufacturers will profit from lower import duties with the U.S. and Japan"Monday's report said.

Likewise Malaysia's palm oil rubber and electronics exporters will see substantial value from the TPPdeal.

Cars and auto-parts makers in Japan also stand to gain fromthe agreement while farmers in Australia and New Zealand will benefitfrom increased market access and lower tariffs on their goods.

The TPPwill also complement existing trade agreements between Singapore and the nine TPPparticipating countries.

Moody's said another positive aspect of the trade negotiations has been to act as a catalyst for reform in several countries in the region such as Japan and Vietnam.

However it cautioned that the TPPmight hurt governments' fiscal balances by reducing their customs revenues over the longer term.

But additional receipts from an expected uptick in economic growth due to the TPPare likely to mitigate foregone tariff revenue it said.

On Oct. 5 theUnited States Australia Brunei Canada Chile Japan Malaysia Mexico New Zealand Peru Singapore and Vietnam reached broad agreement on thePartnership.

The deal howeveris still to be signed by participant countriesand approved by the legislature of each nation before it will take effect.
By P Prem Kumar

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