Effects of TPP and AEC on Brunei

Sally Piri
BANDAR SERI BEGAWAN
Sunday, April 3, 2016

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

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Brunei mulling minimum wage
on: April 03, 2016
| Siti Hajar |

WITH efforts by member countries of the Trans-Pacific Partnership Agreement (TPPA) gaining momentum towards ratification of the ambitious accord, Brunei Darussalam will embark on setting the minimum wage for workers in the country as part of its commitment to the TPPA.

As a member of the International Labour Organization (ILO), the country will have to fulfil its regulations that are in line with man-dates under the TPPA, said Dato Paduka Lim Jock Hoi, Permanent Secretary at the Ministry of Foreign Affairs and Trade (MoFAT).

“It is in the pipeline,” he said of the minimum wage legislation.

“It is being looked at and discussed among the relevant government organisations,” he told the Sunday Bulletin in an interview on the sidelines of the outreach programme organised by the MoFAT at the International Convention Centre, yesterday.

Since Brunei’s entry into the ILO in 2007, the government has ratified a number of conventions including the Worst Forms of Child Labour Convention as well as the Convention on Minimum Age.

According to the TPPA documents, signatory countries are required to draft into law, among others, acceptable conditions of work with respect to minimum wages, hours of work and occupational safety and health.

Additionally, TPPA countries are expected to also include laws that will allow for the freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour and; the elimination of discri-mination in respect of employment and occupation.

The ratification of the deal, which covers a huge free-trade bloc encompassing 40 per cent of the world’s economy, is slated to take place over the next two years.

At present, Brunei has, to an extent, enacted into law aspects of occupational safety and health as well as hours of work but the topic of minimum wage, especially of low-income workers that include locals, has been an on-going issue.

Under the ILO’s Minimum Wage Fixing Convention, 1970, the elements that need to be taken into consideration in determining the level of minimum wages should, so far as possible and appropriate in relation to national practice and conditions, include the needs of the workers and their families taking into account the level of wages in the country, cost of living, social security benefits and relative living standards of other social groups.

Also to be taken into consideration economic factors including the requirements of economic develop-ment, levels of productivity and the desirability of attaining and maintaining a high level of employment.

With the consideration that the topic of minimum wage will be introduced as law, the convention states that the topic should not be subject to abatement and failure to apply them shall make the person, or persons concerned, liable to appropriate penal or other sanctions.

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TPPA: MoFAT, AGC will ensure Brunei IP protection
on: April 03, 2016
| Khal Baharulalam |

THE provisions of Intellectual Property (IP) protection under the Trans-Pacific Partnership Agreement (TPPA) have been the topic of many dialogue sessions since the free trade agreement (FTA) came about in February, sparking questions on the IP Chapter of the 30-Chapter FTA.

The TPP discussions on IP protection have been dubbed an innovative approach, having been foreseen to set the bar for international trade agreements.

While there has been controversy as to what barriers will be formed under the IP bill, Dato Paduka Lim Jock Hoi, Permanent Secretary at the Ministry of Foreign Affairs and Trade (MoFAT) assured that it will be aligned with the nation’s interests.

“In the course of these (TPPA) negotiations, the MoFAT and the Attorney General’s Chambers (AGC) are working closely to ensure that Brunei’s interests are protected.”

This was among the many topics discussed during the open session of the MoFAT Outreach Programme for the Asean Economic Community (AEC) and TPPA at the International Convention Centre, yesterday.

It is stated under the IP Chapter of the TPPA that “the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations”.

It was further explained yesterday that the agreement intends to protect innovation and IP through the establishment of a regional standard (of rights) – a standard which will be shared equally among the 12 signatories.

What this means is that TPPA members will have to adhere to the transnational law of IP protection, regardless of each country’s own IP protection laws. The IP Chapter’s complexity includes sections pertaining but not limited to patents, copyright, trademarks, industrial design among others, but also takes into account that traditional knowledge is related to those intellectual property systems.

In the ‘National Treatment’ section of the IP protection chapter, it is stated that “each Party shall accord to nationals of another Party treatment no less favourable than it accords to its own nationals” when it comes to protecting IP rights, assuring there be no double standards among signatories. These enhanced obligations have been discussed over the past TPP developments, in a bid to protect each member state’s national interests.

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Localisation efforts not affected
on: April 03, 2016
| Siti Hajar |

THE Permanent Secretary at the Ministry of Foreign Affairs and Trade (MoFAT), Dato Paduka Lim Jock Hoi, reassured yesterday that Brunei’s efforts at localisation would not be compromised, due to trade agreements that allow for the free movement of skilled labour.

In an interview on the sidelines of the Ministry of Foreign Affairs and Trade outreach programme to create awareness on the Asean Economic Community (AEC) and the Trans-Pacific Partnership Agreement (TPPA), the permanent secretary explained that although the Mutual Recognition Agreement among Asean member states is in place, “It does not imply that foreign skilled labour can enter the market without satisfying local conditions and regulations.”

He said that Brunei has enforcement agencies to monitor skilled labour – which includes doctors, nurses, engineers and accountants – and managing the flow of expatriate professionals.

“The agreement has to be looked at from the local perspective,” he said, adding that adherence to local conditions is crucial, should skilled workers be needed to meet industry demands.

Otherwise, he said, “Local skills are still protected.”