Kuala Lumpur, November17 (VNA) - The signing of the RegionalComprehensive Economic Partnership (RCEP) is a notable success of the 37thASEAN Summit, bringing both opportunities and challenges to Malaysia and Vietnam,according to a Malaysian expert.

According to Professor Yeah Kim Leng, Senior Fellow and Director of theEconomic Studies Programme at the Jeffrey Cheah Institute on Southeast Asia atSunway University, asthe world’s largest trade bloc, the further tariff reduction, tradefacilitation and market access are expected to result in further output andefficiency gains, as well as higher consumer welfare that results from lowerprices and wider choices of goods and services, for the 15 signatory members.

“Trade and investment flows among the bloc members will be further strengthenedas investor confidence is being enhanced by the commitment to free trade andmarket access under RCEP,” he said.

Yeah stated that both Vietnam and Malaysia will be among the key beneficiariesas they have sizeable export-oriented industries and foreign direct investmentstock. While some industries within each country will face higher importcompetition, the overall gains in economic efficiency will outweigh the negativeeffects arising from the decline of industries that are unable to compete.

“With appropriate industrial adjustment policies in place to assist theaffected industries, these losses can be minimised while the majority of thepopulation gain from higher economic efficiency, more integrated regionalsupply chains and higher demand generated by sustained income and job growth,”he noted.

For most sectors already exposed to international and regional competition,both the Malaysian and Vietnamese economies will need less industrialadjustments and government intervention to counter any negative side-effects ofRCEP, he added./.