PETALING JAYA, 17 May: Malaysia, as a signatory of the Trans-Pacific Partnership Agreement (TPPA), is expected to attract inward investments that could boost its real national income by 7.6% by 2030, according to a Baker & McKenzie report.
The report, “Asean Connections” that is based on a survey conducted by the Economist Corporate Network on behalf of Baker & McKenzie, noted that Malaysia and Vietnam stand to gain the most from the TPPA.
The survey asked 144 business leaders of large multinationals for their views on how these mega-regional initiatives are shaping the Asean business environment and how they are impacting their business strategy.
“Countries in Asia, such as Vietnam and Malaysia, are said to gain most from TPPA, with Vietnam seeing a possible 8.1% boost to its real national income by 2030, and Malaysia a 7.6% increase by the same year,” the report released yesterday said.
It stated that 74% of the companies surveyed expect an increase in Asia’s share of the global revenue, while 65% of the firms expect to see an increased demand for their products and services. About 56% of the respondents also expect intellectual property rights protection to improve.
“While there is some anti-trade agreement sentiment being expressed in some signatory countries, 62% of the companies surveyed predict that the TPPA will be ratified within the next three years, and close to 95% see the partnership ratified within five years,” it said.
The report highlighted that although it may not be until 2021 when the TPPA will have significant impact on trade, manufacturing companies are already beginning to leverage Asean as a single market and production base and locate different aspects of the manufacturing process in places with the most appropriate skills, costs, resources and connectivity.
The report revealed that companies see huge opportunities in the Asean block as mega-regional trade initiatives such as the TPPA, the Regional Comprehensive Economic Partnership (RCEP) and China’s One Belt One Road (OBOR) work in tandem to improve connectivity and the overall business environment in the region.
“These mega-regional initiatives are viewed as ultimately deepening regional integration, with companies rating the TPPA and RCEP as particularly effective change agents,” it said.
About 85% of the surveyed companies expect the TPPA and RCEP to boost economic integration in the region, predicting growth with similar proportions in both intra-regional trade (85%) and investment (84%).
“These predictions are slightly higher than the rates expected from OBOR, which is 63% for both intra-regional trade and investments,” the report said.
Meanwhile, almost 44% believe that the RCEP will become operational within a three-year period, and around 97% within a five-year period.