middleclass

ASEAN – The next PRD?
Special Report: Shop Talk – China, ASEAN and robotics
Much focus is centred on the TPP, a mega regional FTA negotiated between 12
countries, of which four are from ASEAN. The 12 countries include Australia, Brunei,
Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Japan, Singapore, the US and
Vietnam. They account for about 40% of global GDP and about one-third of global
trade. The TPP was signed by all 12 countries in February 2016 but will only be
enforced after ratification by all the partners.
The TPP could raise Vietnam’s GDP
by 10ppt by 2030, the biggest gain
among all members
Within the TPP partners, Vietnam could be the biggest beneficiary. According to the
World Bank, the TPP could boost Vietnam’s GDP by 10ppt by 2030, the biggest gain
among all members. Vietnam should benefit from lower tariffs and non-tariff
measures, and the migration of supply chains, as companies that sought to benefit
from TPP arrangements will need to adhere to stringent rules of origin requirement.
TPP members currently account for c.35% of Vietnam’s export destinations.
Including countries that do not currently have either FTAs or Comprehensive
Economic Partnerships (CEPs) with Vietnam, the TPP could double Vietnam’s trade
reach in terms of GDP. The effect is largely due to the US being a part of the TPP.
Figure 22: International reach if the RCEP is concluded
By FTA members’ population, GDP, and trade (in multiples of own country population, GDP and trade, respectively)
700
140
90
600
120
80
500
100
70
60
400
80
50
300
60
40
200
40
30
20
100
0
4.6
SG MY TH VN PH ID ASEAN
20
0
8.0
VN PH SG MY TH ID ASEAN
10
0
3.3
PH VN ID TH MY SG ASEAN
Source: CEIC, Standard Chartered Research
Figure 23: International reach if the TPP is concluded
By FTA members’ population, GDP, and trade (in multiples of own country population, GDP and trade respectively)
160
180
40
140
160
35
120
140
30
100
80
60
120
100
80
60
25
20
15
40
20
5.4
40
20
33.7
10
5
5.6
0
SG MY VN ASEAN-4
0
VN SG MY ASEAN-4
0
VN MY SG ASEAN-4
Source: CEIC, Standard Chartered Research
19 July 2016 36