On 5th October 2015 in Atlanta, Georgia, USA, the 12 countries negotiating the Trans-Pacific Partnership (TPP) Agreement - Brunei Darussalam, Australia, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America, and Viet Nam - formally announced the conclusion of talks for a comprehensive and ambitious free trade agreement that aims to facilitate trade and to strengthen trading regime in the Asia Pacific region.
After 5 years of negotiations, this historic achievement bridges the divide between two sides of the Pacific, forging the road ahead for the future of economic integration in Asia Pacific.
As a founding member of the TPP negotiations, Brunei Darussalam’s participation, in fact is not a recent one, where the origin of the TPP can be traced back to the Trans-Pacific Strategic Economic Partnership Agreement (commonly known as the P4), an FTA between Brunei Darussalam, Chile, Singapore and New Zealand which entered into force in 2006.
The conclusion of negotiations marks an important milestone for the Government of Brunei Darussalam, where it sees the TPP as an initiative with strategic economic importance and will better position itself in the rapidly evolving global trade architecture. This is in line with Brunei Darussalam’s trade policy in seeking free and open trade within the context of multilateral trade rules.
At present, global trade is no longer a simple exercise of importing and exporting of goods and services from one country to another. As the global marketplace becomes increasingly interconnected, there is a pressing need to address “behind the border” issues that have come about as a result of these changes. The TPP aims to facilitate trade not just through simple tariff reduction, but also by streamlining business transactions and removing cumbersome customs procedures, while at the same time preserving the ability of countries to regulate markets and activities that affect public interest, such as on the environment and health.
Brunei Darussalam’s participation in the TPP is pertinent given that it still continues to import almost all of its needs to meet domestic consumption, and even more so as it aims to encourage greater foreign direct investment (FDI) inflows to strengthen and diversify the Brunei economy.
Brunei Darussalam will particularly benefit through the creation of a more robust trade and investment regulatory framework domestically as we affirm commitment to ensure effective enforcement of intellectual property rights, maintain high standards and protection for labor and environment; establish fairer competition through prohibition of anti-competitive business conduct for all businesses including state-owned enterprises.
Local exports will be able to enjoy duty free access to the markets of TPP countries that Brunei Darussalam has no existing FTAs with, i.e. Canada, Mexico, Peru, and the United States of America. The wider marker access is hugely beneficial for local companies that are already exporting, but also opens up greater opportunities for those looking to do so.
The lowering of tariffs for imports and opening of foreign markets for exports of goods and services will benefit local consumers and producers through cheaper imports of finished goods and raw materials.
Through the TPP, Brunei Darussalam will be able to participate more effectively in the regional supply and value chains. Producers will be able to source raw materials and intermediate goods from within the TPP region in their production and export the finished goods back to the TPP partners while still be able to benefit from the lower tariff.
The TPP will also encourage greater labour mobility. Mutual recognition and relaxation of requirements in several professional practices will enable Bruneian professionals, to enter and work temporarily in TPP Parties.
Additionally, the TPP also contains provisions to ensure effective participation of SMEs that will enable them to participate in the global supply chain and expand overseas. Further complementing the reduction in trade barriers, paperwork and customs procedures are specific commitments that will ensure access to user-friendly information on trade-related regulations and procedures, including on taxation and employment.
These benefits may not be felt immediately, but over time will spur competitive markets and attract more foreign investors to Brunei Darussalam. This will further spearhead the Government’s economic diversification efforts that will create jobs and elevate the population’s standard of living.
The Government of Brunei Darussalam is working to ensure the benefits of the agreement be realized as soon as possible. Further, the eventual expansion of the TPP to include new members is very much welcomed where we would be able to reap the benefits from larger integration.
Text of the TPP Agreement
Statements and Releases
