A Credit Suisse building. (Source: Forbes)
Vietnam could see a 10% boost to GDP by 2025, while Malaysia could see a 5.5% boost, Credit Suisse cited a Peterson Institute research as saying. Singapore is a relatively small beneficiary with an expected GDP boost of 1.4%, partly because it has an existing free trade agreement with the US unlike the other two countries.
As tariffs and quotas are much more prominent than for other industries, preferential treatment for textiles, garments and footwear would give Vietnam a big advantage over non-TPP countries such as China and Thailand.
This sector was already big and growing in Vietnam, but TPP should accelerate a move of back-end production from China and Thailand to Vietnam, giving the country the advantages of vertical integration and clustering, says the report.
The TPP could stimulate Chinese investment in Vietnam as textile firms from the neighboring countries could find Vietnam a much more attractive production base. Chinese investment up to now has been largely absent, ranking just ninth as a source of FDI.
Among the stocks that benefit the most from the U.S.-led trade deal are apparel maker TCM and companies of the construction and utilities sectors such as NT2, PPC, REE and CTD. TPP could also have a spill-over effect on sectors including banks, consumer and property, Credit Suisse noted, giving Outperforming rating to Vinamilk (VNM) and Vingroup (VIC).