TPPA seen to have little effect on trade flows

Marginal growth: Malaysia’s largest export component (electrical equipment) will only post marginal growth post-TPPA as tariffs on such products are marginal if not non-existent. – Reuters

PETALING JAYA: The implementation of the Trans-Pacific Partnership Agreement (TPPA) is expected to have muted effects on Malaysia’s trade flows given the already low tariffs that exist between the country and many of the signatories of the new trade deal, says RAM Rating Services Bhd.

In its analysis, which was based on Malaysia’s current productive capacity and comparative advantages, the credit rating agency also noted that growth of imports would likely be more pronounced than incremental exports at the onset of tariff reductions, mainly due to Malaysia’s higher tariffs on imported goods.