Brunei Darussalam's Free Trade Agreements
Brunei Darussalam views Free Trade Agreements (FTAs) as a vital part of its foreign trade policy to maximise the potentials of free and open trade for its people in an ever-globalising world. With a relatively free and open trading regime, as well as a small but highly educated workforce, Brunei Darussalam sees engagement on FTAs as an important step in ensuring that its people, goods, services and investments have continued access to wider markets around the world.
Brunei Darussalam, which is largely seen in the international community as a producer of oil and gas, is currently undertaking a number of projects in a bid to further diversify its economy. In this regard, the Government of Brunei Darussalam strongly believes that active engagement of FTAs with a number of key strategic partners will open up markets for Brunei’s exports and services as well as help facilitate the flow of foreign direct investment into Brunei Darussalam.
Overview of Brunei FTAs
Brunei Darussalam has been actively engaged in FTAs through its membership in ASEAN as well as on a bilateral basis.
To date, Brunei Darussalam, through ASEAN, has concluded FTAs with Australia & New Zealand, China,India,Japan and South Korea.
Bilaterally, Brunei Darussalam has concluded an Economic Partnership Agreement with Japan (the Brunei-Japan Economic Partnership Agreement or “BJEPA”) and a plurilateral agreement with Chile, New Zealand and Singapore (the Trans Pacific Strategic Economic Partnership or more commonly referred to as the “P4”)
The BJEPA is Brunei Darussalam’s first bilateral free trade agreement. The Agreement was signed by the leaders of both Brunei Darussalam and Japan on 18 June 2007, and entered into force on 31 July 2008. The Agreement is hoped to enhance Brunei Darussalam’s investment climate and encourage foreign direct investments (FDI) through greater predictability and transparency. Market access between Brunei Darussalam and Japan will also be improved in terms of goods (through the reduction of import duties) and services. Marking the long-standing relationship between both countries, the Agreement also has chapters on Energy, Improvement of Business Environment and Cooperation which will help further strengthen bilateral ties to a higher level of partnership.
Brunei signed the P4 on 2 August 2005 and deposited its Instrument of Provisional Application to New Zealand as the depository of the Agreement on 12 June 2006. The Agreement came into force for Brunei Darussalam on 12 July 2006, and will bring about strategic benefits for all four partners, Brunei Darussalam, Chile, New Zealand and Singapore, and in effect build a bridge between Latin America, the Pacific and Asia. It will encourage Brunei, Chile, Singapore and New Zealand to pool their expertise, ideas, technology and resources to improve their competitiveness on the global market. The Agreement will also help advance shared objectives in APEC and the WTO.
The P4 also has side agreements, namely the Environment Cooperation Agreement and Labour Cooperation Memorandum of Understanding, to reflect a shared desire to encourage and promote sound labour and environment practices. These agreements establish mechanisms for on-going cooperation and dialogue on labour and environment issues.
As the signatories to the Trans-Pacific Strategic Economic Partnership Agreement (P4), Brunei is involved in the negotiations for the Trans-Pacific Partnership (TPP) Agreement, together with Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States of America and Viet Nam.
The TPP is aimed at achieving a plurilateral '21st century' free trade agreement that will further liberalise and integrate the economies of the Asia-Pacific. The TPP involves disciplines on areas such as the Environment, Government Procurement and Labour, amongst others. The scope also encompasses new 'cross-cutting issues' not previously included in other FTAs, such as Development, Regulatory Consistency, Competitiveness and State-Owned Enterprises, making the TPP the most comprehensive agreement that Brunei Darussalam is currently negotiating in. Upon completion, the TPP would provide Brunei Darussalam with access to markets such as the United States, Canada, Mexico and Peru) where it is also hoped that the TPP will present a pathway to the eventual realisation of the APECgoal to realise a 'Free Trade Area in the Asia-Pacific' (FTAAP).
Brunei Darussalam has recently concluded negotiations for the Trans-Pacific Partnership (TPP), a free trade agreement which currently involves 11 other countries, i.e. Australia, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, USA and Viet Nam. Together, the TPP partner countries reflect a market comprising of 800 million people with a combined GDP which represents nearly 40% of global GDP.
TPP partner countries share a common vision to establish a comprehensive, next-generation regional agreement that liberalizes trade and investment and addresses new and traditional trade issues and 21st-century challenges. Upon completion, the TPP will further enhance trade and investment among the TPP partner countries, promote innovation, economic growth and development, and support the creation and retention of jobs.
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