Brunei Japan Partnership by RB

Mr. BR's entry on the protests against the Chinese Premier in Tokyo reminded me of another post when he was in Korea last year when Koreans were protesting against the Korea-USA FTA (Free Trade Area). Korea then only had one FTA with Chile, compared to us Brunei which has 8. I understand that Brunei is now in negotiation with Japan for a Brunei-Japan Economic Partnership Agreement (BJEPA) even though not called FTA but it is still an FTA. Last month was the fourth round of negotiations, but I don't see much of it being discussed in the national press. In Korea, the farmers come out, and rightly or wrongly, protested against it as they know what the implications are. Bruneians, on the other hand are, well....


I am not going to talk about FTAs, you can link that to Mr. BR's previous post which also has links to other useful sites. An FTA is supposedly good as it allows a country to specialise in any product of which it has comparative advantage (open your Economic textbook) and theoretically everyone living in that FTA area will beneftit. However as the Koreans protests indicated, individual economic sectors do get affected - some gain and some lose and those who lose do not like it.

What do we gain by having a BJEPA? The Brunei consumers will gain by having lots of cheaper import from Japan including cheaper cars and auto parts, electrical and electronic items. But if this goes ahead, Brunei government will lose revenues as there will be reduced collection of import duty from Japanese goods. For other countries, for example Malaysia, this would be fine as their Malaysian made cars maybe cheaper and can be exported to Japan. How about Brunei made cars? Oh, I forgot, we don't have a car industry or any other substantive industry for that matter for us to export to Japan.

Hang on, I hear you ask - we might gain by having our products such as agricultural products being exported to Japan with lower or no tariffs. Like what? Hmmmm. Oh yes, shrimps and mangoes and.......... er, Labi oranges, maybe keropoks. What else? Oh yes. The possibility of greater opportunity access to Japanese markets. *suppressed laughter* And the possibility of Brunei's industries developing due to better comparative advantage and can now export to Japan. *more suppressed laughter* Oh boy. I sure do hope someone in Brunei will take advantage of this.

Being an energy dependent country Japan would like to secure all its energy. Brunei being an energy producer country would be able to sell all its energy. Even though I am not privy to the agreement, I betcha there will be a clause in there that says 'guaranteed supply'. I sure hope that the 'guarantee' is within our energy production capability. I am not being sceptical. What I need is someone to tell me the value of the advantages or disadvantages of this agreement. Maybe then I will be convinced.

PS. Today's post is written by someone called RB who worries about which direction we are heading.
PPS. To the few who know what we are doing, by the time you read this, we are on our way back to the Kingdom of Unexpected Treasures. All the delegation are on cloud 9 or Cloud 40,000 as that's where we are physically and emotionally after a two day tough negotiation session. We walked in expecting not much and walked out getting what we wanted.

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