Question

In: Economics

The Trade Pacific Partner (TPP) was signed in New Zealand on 4th February 2016 by a...

The Trade Pacific Partner (TPP) was signed in New Zealand on 4th February 2016 by a group of twelve countries. However, the United States of America (USA) withdrew from the pact in January 2017 and the remaining 11 member countries signed the newly Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) on 8th March 2018.                            

  1. State at least FIVE (5) goals of TPP.
  1. Explain the benefits of TPP to Malaysia.
  1. What is the plausible reason that the USA pull out of TPP?

Solutions

Expert Solution

Goals of TPP are as follows:-

1) To raise the standard of living.

2) To facilitate to cross-border unification.

3) To open the door of domestic markets.

4) To support jobs.

5)To enhance conversation efforts.

6)To boost Economic growth.

Benefit of TPP to Malaysia:-

TPP promotes growth in all over GDP of Malaysia. TPP opens a door to a duty free market of 800 million people with the combined GDP.TPP will boost the export of Malaysia by 2027 a prior to the manufacturing sector.TPP allows Malaysia to attain market access to 4 countries that currently it has no FTAs with those 4 countries.Import growth is also expected to increase by 2027 driven dominantly by higher imports on intermediate and capital goods.consumers can choose from a larger range of high quality and reasonable prices imported goods and services because of the elimination of the tariff. Local firms and manufactures will also benefit greatly through TPP.and of course the liberalization of the service sector will allow Malaysian student to attend well-known internationally -recognised institutions based locally at a lower cost.

According to the International Trade and Industry Minister Mustapa Mohamed, Malaysia is projected to receive over US$100bil more FDI4 via TPPA since the treaty helps to shape Malaysia into an optimum country worth investing in, thus attracting foreign investment, especially from countries exempted from TPPA. Notably, the textiles sector will register the biggest increase in investment growth in 2027, trailed by the construction and distributive trade sectors. While issues concerning the Intellectual Property Rights (IPR) are brought up in TPPA, I believe Malaysia will emerge as an appealing destination for R&D and high-technology manufacturing which will propel FDI in favour of TPPA. Malaysia is subject to increased investment from MNCs in the R&D sector, potentially encouraging the building of an extensive local industrial base and the entry of an array of innovative products to the local market. Likewise, the enforcement of tighter patent rights will also contribute to domestic investments as local companies are motivated to take part in avant-garde R&D in various fields while enabling intellectual talents to flourish in creative creation. TPP will create employment in Malaysia and an increase in wage growth will increase in employment rates.(based on the theory of marginal revenue productivity theory of wages).

There is no doubt that Malaysia will get benefit from the Trans-pacific partnership Agreement.

Why USA pull out from TPP??

On 23 January 2017 US President Donald Trump signed a presidential memorandum to withdraw in the united states signature from the agreement,making its ratification as it was in February 2016 virtually throughout his election campaign,he reffered to the TPP as a" horrible deal". when he became President,his first step was getting the U.S out of the TPP,since he believed that it steals American jobs while benefiting large corporations.


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