AEC, TPP can create opportunities for Brunei

National 6 minutes, 16 seconds

BANDAR SERI BEGAWAN

A SENIOR officer of the Ministry of Foreign Affairs and Trade (MoFAT) yesterday stressed the importance of economic initiatives under the ASEAN Economic Community (AEC) and Trans-Pacific Partnership (TPP), which can create significant opportunities for Brunei’s local companies, including small-medium enterprises (SMEs).

Dato Paduka Lim Jock Hoi, Permanent Secretary (Trade), in his opening remarks during the outreach programme on AEC and TPP, said these two initiatives can bring greater market access, prospects for increased competitiveness and promote the drive for the adoption of international best practices that can lead towards ease of doing business in the country.

“The initiatives, however important and strategic we may consider them, are futile unless our private sectors take advantage of what has been provided,” Dato Lim said, adding that governments are only the facilitators, while private sectors are the real drivers of the economy.

He also reiterated Brunei Darussalam’s strong interest in supporting free and open trade. “As a small, developing economy, it is important for us to be able to trade openly with other countries, so that we overcome the challenges of having a small domestic market.”

Touching on the issue of foreign direct investments (FDI), he said that it is also crucial for Brunei to be seen as an open economy that is conducive for attracting FDIs.

He said that FDIs are an important driver of growth and the economic strategy under Vision 2035 emphasises its important role in helping support the country’s efforts to diversify its economy towards a more knowledge-based society.

“Our foreign trade policy has been geared towards safeguarding Brunei’s interests and ensuring greater access to regional and international markets,” he said.

The sultanate reinforces its partnerships with strategic economies and help local companies gain exposure and footing in the international arena, he said.

“We seek to bolster the country’s status and profile as a member of the international community, so that interest in Brunei Darussalam is promoted for broader economic engagement.”

Organised by the ministry at the International Convention Centre (ICC) in Berakas, the outreach programme aims to disseminate and increase awareness to the public, especially members of the business community, on the initiatives that the government is doing in the context of foreign trade policy. The event, among others, saw the attendance of business leaders, government officials, representatives of private sector and academicians.

ASEAN Economic Community

The presentation on AEC was the first to be delivered during the MoFAT outreach programme yesterday.

The discussion, among others, touched the matters pertaining to the objectives of Brunei’s trade policy, the meaning of single-market and production base, how to benefit from the free trade agreements and process to apply for certificate of origin (an international trade document to attest the origin of goods).

AEC was formally launched on December 31, 2015. The four pillars under AEC are single market and production base, competitive economic region, equitable economic development and integrated into the global economy.

One speaker said, under AEC’s first pillar, ASEAN opens up the regional market for businesses.

ASEAN member state maintains their own sovereign rights to regulate their own trading system with the help of a central body to govern them, such as to set up the policies and set up common tariff rules.

ASEAN is committed to reducing its tariffs. The idea of this first pillar is to ease the movement of goods, services and investment in ASEAN.

On the second pillar, which is ASEAN being a competitive economic region, the speaker said member states work to ensure that the elements that business require to prosper are in place.

Citing an example, all businesses, big and small, can compete by having competition policy.

“We want to welcome more creativity and technology by having strong intellectual property rights regimes and make sure that our consumers are indeed protected by having a regional consumer protection at each of the ASEAN member state,” the speaker said.

It was previously reported that in the area of intellectual property rights, Brunei has been able to learn from its ASEAN counterparts, while benefitting from the various technical assistance programmes provided by ASEAN’s Dialogue Partners, especially in making Brunei an attractive destination for foreign direct investment.

Efforts made under the third pillar, which is being a region with equitable economic development, aims to ensure that no one is left behind.

They hope to narrow development gaps in the newer ASEAN member states: Cambodia, Myanmar, Laos and Vietnam.

Efforts to develop small and medium enterprises (SMEs) within the ASEAN member states are also taking place as SMEs are the backbone of the regional bloc.

The final pillar, integrated into the global economy, was undertaken in recognition of the fact that some of ASEAN’s largest trading partners and investors are from outside the bloc.

"We are integrated into the global economy because ASEAN cannot live in isolation,” the speaker said, adding that ASEAN need to reinforce its strength to be an important member of the bigger regional and international trading system.

ASEAN is now the seventh largest economy in the world, with a population of 622 million people. The bloc’s gross domestic product (GDP) has nearly doubled since 2007.

During the question and answer session, some business leaders raised issues on matters pertaining to taxation system in other ASEAN countries, product standardisation, FDIs and air connectivity within the member states of sub-regional economic grouping of the Brunei Darussalam, Indonesia, Malaysia, Philippines East ASEAN Growth Area (BIMP-EAGA).

In their response, the panelists – comprising officials from MoFAT, DARe (Darussalam Enterprise) and Energy and Industry Department at the Prime Minister’s Office – highlighted the government’s focus on attracting FDIs into the country.

Among other sectors that the government prioritises in term of attracting FDIs include oil and gas, tourism industry, halal industry as well as technology and services.

Meanwhile, on the issue of air connectivity within the BIMP-EAGA member states, a panelist said that it depends on the private sector whether they see the sustainability of air transport as currently it is difficult to sustain air services activity within the BIMP-EAGA.

Trans-Pacific Partnership

During the presentation on Trans-Pacific partnership, the participants were briefed about various issues ranging from the overview of TPP, market access to its benefit. TPP was signed on February this year by 12 countries across the Asia Pacific region, including Brunei.

A data showed that total trade between Brunei and TPP countries in 2014 reached $10.8 billion, with the highest trade value recorded with Japan at $5.5 billion.

Meanwhile, the total trade with non-TPP countries stood at $7.2 billion.

TPP is a comprehensive, high standard regional trade agreement that contains 30 chapters covering a full spectrum of areas to enhance and improve trade.

These chapters, among others, feature textiles and apparel, customs administration and trade facilitation, trade remedies, telecommunication, electronic commerce, intellectual property, labour as well as SMEs.

It was reported that the TPP will provide local Bruneian businesses and investors with improved access to the markets of the 11 countries, with a consumer base of 800 million people, compared to Brunei’s domestic market of about 400,000 people.

This is beneficial for local companies that are already exporting and presents numerous opportunities for those looking to do so, especially in the countries which Brunei did not have FTAs with previously, such as Canada, Mexico, Peru and the United States.

Other issues brought up during the question and answer session included dispute settlement, the halal issue where Brunei is allowed to maintain the halal standards, government assurance to protect Brunei’s national interest, protection for the SMEs.

The Brunei Times