China-Led RCEP An Alternative To TPP, Says Fitch Ratings

KUALA LUMPUR, Dec 6 (Bernama) -- The China-led Regional Comprehensive Economic Partnership (RCEP) could turn out to be an alternative to the Trans-Pacific Partnership (TPP). International rating agency, Fitch Ratings, in its 2017 Outlook: Emerging Asia Sovereigns Report, said RCEP, however, has limited regulatory reforms and large consumer markets in the Americas were excluded. "A long-term growth impetus presented by the TPP trade pact now seems to be off the table after president-elect Donald Trump said the US will pull out of the agreement," it said. The RCEP involves members of the Association of South-East Asian Nations (Asean), China, Japan, South Korea, India, Australia and New Zealand while TPP consists of US, Japan, Australia, New Zealand, Chile, Mexico, Canada, Peru and four Asean members -- Malaysia, Singapore, Brunei and Vietnam. It said although China has become the largest trade partner of most economies in the region, the US was still an important market, accounting for almost one-fifth of China's exports. "The disruption to trade between China and the US will have knock-on effect for the rest of the region as sovereigns, including the Philippines, Thailand, South Korea and Taiwan, are significant suppliers of intermediate goods such as electronic and car components to China," it said. Nevertheless, the rating agency said, if more aggressive tariff policies were pursued by the US, China would take counter-measures, and not necessarily limited to, tariffs on US imports. "A trade war would have adverse consequences on the gross domestic product growth and inflation in both countries. It could lead to the depreciation of the Chinese yuan and will jolt the financial markets that would likely to spill over to other emerging markets in the region," it said. -- BERNAMA