Brunei stands to gain from Trans Pacific Partnership
BANDAR SERI BEGAWAN
BRUNEI will be one of the largest gainers among the Trans Pacific Partnership (TPP) member countries when it comes to exports, gross domestic product (GDP) and income over the long term, according to studies from two leading organisations.
The World Bank, in its January 2016 report entitled ‘Global Economic Prospects: Spillovers amid Weak Growth’, said that Brunei would come in third with a five per cent gain in GDP by 2030, behind Vietnam and Malaysia both of whom lead at 10 and eight per cent respectively.
The study by the Washington-based global lender said that the largest GDP gains are expected in smaller and open member economies.
Vietnam and Malaysia would benefit from lower tariffs and non-tariff measures in large export markets and at home from stronger positions in regional supply chains through deeper integration, said the study.
In a working paper from the Peterson Institute for International Economics (PIIE), Brunei would experience a 5.9 per cent income growth from baseline income by 2030, behind Vietnam’s 8.1 per cent and Malaysia’s 7.6 per cent.
The paper entitled ‘The Economic Effects of the Trans-Pacific Partnership: New Estimates’ by Peter Petri and Michael Plummer, said that Brunei is one of the countries projected to have significant percentage gains along with other the other small economies of Peru, Singapore and New Zealand.
“Large gains are also projected for Japan, Malaysia, and Vietnam. Japan benefits from improved market access throughout the TPP region, including early liberalisation of auto imports in markets other than the United States (US) and from domestic reforms that reduce distortions in its protected service and investment,” said the study from the Washington-based non-profit economic institution.
It added that percentage gains are especially large for Vietnam and Malaysia as the agreement should stimulate domestic reforms and provide access to protected foreign markets.
In an interview, Craig Allen, the US Ambassador to Brunei, said that the both studies show that the sultanate has much to gain from the world’s largest trade pact which would help diversify the country’s economy.
“While all these reports make macroeconomic assumptions, I think that they all point to significant improvement over time,” he said at the US embassy.
“The TPP would improve Brunei’s likelihood of diversification and growing employment, exports, output and global linkages outside oil and gas.”
He said that the TPP operates under economic stimulus regardless of oil prices and make it easier for Brunei and its TPP partners to invest amongst each other.
It will also give Bruneian small-medium enterprises the opportunity to grow beyond the small local market and help local and foreign manufacturers due to duty free entry into anywhere within the TPP world, he said.
In a November 2015 statement, Brunei’s Ministry of Foreign Affairs and Trade (MoFAT) said that the country’s participation in the TPP will drive national economic developments and ensure the country’s future prosperity.
Brunei’s future relies on its success as a trading nation, MoFAT said in the statement at that time.
According to the ministry, Brunei’s total trade with TPP countries amounted to $10 billion in 2014, a figure which comprises an average of 64 per cent of the country’s overall trade.
The TPP was formalised last week in New Zealand with member countries now working on completing their respective domestic processes.
The TPP member countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam.
The Brunei Times