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383147
Sat, 10/10/2015 - 13:03
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Economists Hail Conclusion Of TPP Talks But With Some Reservations

By Tengku Noor Shamsiah Tengku ABdullah SINGAPORE, Oct 10 (Bernama) -- News that 12 Asia-Pacific nations including the United States, Malaysia, Singapore, Japan and Australia have finally agreed to the the Trans Pacific Partnership (TPP) free trade deal is to be welcomed, but one shouldn’t get too excited, says an economist. "Free trade is great but watching for the impact of new trade deals on overall economic growth or share markets is like watching grass grow. "And of course, the TPP has to be passed into law in each country and there are some uncertainties on this front in the US. "I won’t be changing any economic growth forecasts or investment market expectations as a result of it," Dr Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, told Bernama. On Oct 5, the US and 11 TPP member nations completed negotiations on the landmark trade agreement, which seeks to enhance trade and investment among the partner countries, promote innovation, economic growth and development, and support the creation and retention of jobs. Oliver said for Australia, the TPP would mainly benefit rural exporters, including the sugar industry. "There may be some benefit to consumers but Australian tariffs on imports are already very low. "For Malaysia there may be some benefits in exporting to the US and other countries," he said. Asked on countries being left out of the TPP like India, China and Indonesia, he said: "Yes, various countries are left out, and there is lots of politics involved. "But then some of the signatories like Australia have free trade deals with China anyway, so it's not likely to cause a major problem for them." He said while the TTP would not be a game changer for the US, it does help cement US relations with various countries in the region as it pivots away from engagement in the Middle East. In his analysis made available here, Dr Dan Steinbock, research director of international business at the US-based India China & America Institute, said the just concluded TPP agreement presents Asia with good, bad and ugly scenarios. Had the TPP failed, it would have been a severe blow to US credibility in Asia, said Steinbock, who is also a visiting fellow at Chinese think tank Shanghai Institutes for International Studies (China) and the EU Centre in Singapore. "The TPP has been praised as a triumph for the Obama administration. "However, it still faces a tough battle with a divided Congress amid the presidential primaries, it is now opposed by leading Democratic candidate Hillary Clinton, and it needs the approval of the 11 other TPP members’ legislative bodies," he said. In 2005, the original TPP among Brunei, Chile, New Zealand and Singapore was a vision of an inclusive free trade agreement (FTA). Steinbock said Vietnam and Malaysia would gain access to important US markets, while Singapore seeks greater access to the Americas, along with tiny oil-rich Brunei. He said while Vietnam has had disputes with China, all four enjoy economic cooperation with China, which remains one of their largest trade partners. As members of the ASEAN-China FTA, Steinbock said, all ASEAN member states benefit from economic cooperation with China. China also has bilateral FTAs with individual TPP members, including Singapore, South Korea, Australia, New Zealand, Peru and Chile. Australia welcomed the TPP deal, but weeks after it had signed its FTA with China. Meanwhile, in a statement, the American Chamber of Commerce in Singapore (AmCham) urged the United States Congress to support the creation of the TPP and take action to ensure its successful conclusion, describing the TPP as a landmark FTA that would promote American growth and jobs. "It covers an unprecedented range of sectors important to our economy including commodities, services and new technologies, and sets standards that will shape commerce in the 21st century," it said. With a population of almost 800 million and a combined GDP that represents over 40 per cent of the world total, the chamber said, the 12 negotiating parties can expect to reap immense economic benefits from increased trade volumes and stronger economic ties within the TPP grouping. It said this will create jobs in member economies and provide more opportunities for companies of all sizes to grow and expand their reach in the region. Small and medium-sized businesses (SMEs) have been a particular focus in the negotiations. In addition, it said, the TPP will incorporate 21st century cross-cutting “horizontal” issues such as regulatory coherence and transparency that will improve the environment for trade and investment in the region. These are issues faced by companies across all countries and sectors, but addressing them ensures that growth-stimulating regional integration will proceed more smoothly and efficiently. -- BERNAMA

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