Improving US-ASEAN Cooperation Offers 'Win-Win' Outcome, Says Economist

KUALA LUMPUR, Feb 13 (Bernama) -- The improved cooperation between the United States (US) and ASEAN offers the prospect of a "win-win" outcome and is further strengthened with the Trans-Pacific Partnership Agreement (TPPA) in place. HSBC Senior Trade Economist Douglas Lippoldt said ASEAN member countries can tap the large growing consumer spending market of the US and is also an important source of imported inputs that can help the regional grouping improve the competitiveness of its manufacturing process. "The US also benefits from tapping a market that is growing at three times the pace of its economy. "At the same time, it opens up the market for ASEAN," he told a teleconference on Friday and ahead of the ASEAN-US Summit on Feb 15-16 in Sunnyville, in the US. Lippoldt highlighted that Malaysia and Vietnam could see potential growth in income of about eight per cent with their participation in the mega trade pact. He added that the TPPA text liberalised the services sector and ASEAN members can tap the global services input and improve their competitiveness in the production process regionally. "Looking at the Malaysian electronics export segment, we found that about 50 per cent of the inputs are actually imported. These imported content help boost the competitiveness of the final products," said Lippoldt. He said according to a recently published study, the TPPA can contribute to increased trade among the 12 partner countries by about 10 per cent. "This is a significant potential contribution to growth in trade. On average, the study also forecast that it could increase gross domestic product (GDP) in the region by about 1.1 per cent," he added. Lippoldt cautioned that countries which remained outside the TPPA would risk seeing trade diverted away to the participating member countries. "The trade pact represents 40 per cent of global GDP. There is a huge potential to look for in terms of economies of scale inside the region," he said. --BERNAMA