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Borneo Bulletin Yearbook 2020
Free trade agreements (FTAs) are signed
between multiple nations to facilitate open
trade. Brunei Darussalam sees FTAs as a vital
part of its foreign trade policy to spur economic
growth and ensure its people, goods, services
and investments have access to wider markets
around the world. The country’s first bilateral
FTA, the Brunei-Japan Economic Partnership
Agreement, was signed in 2007.
Brunei has been actively engaged in FTAs
through its membership in ASEAN, establishing
free trade with countries including China,
South Korea, Japan, India, Australia and New
Zealand. The ASEAN-Hong Kong, China Free
Trade Agreement was signed in 2017.
In the pipeline is the Regional Comprehensive
Economic Partnership (RCEP), a proposed FTA in
the Asia-Pacific region between ASEAN and its
FTA partners.
Through FTAs, local businesses can benefit
from the reduction or elimination of tariffs. This
will reduce trade transaction costs as a whole.
As a result, the price of goods will also be lower.
In addition, reducing or eliminating tariffs
promotes free flow of goods in the region,
enabling local businesses to expand in a larger
scale. Local businesses have the opportunity to
enter the foreign market with cheaper costs to
promote and sell their products.
FTAs also enhance trade facilitation by
encouraging import and export activities
between local businesses and their FTA
counterparts. By facilitating the flow of goods,
transaction costs for traders are lowered
due to streamlined customs procedures and
standards. Resources can be moved efficiently
from one region to another with limited or
without restrictions.
Local businesses can enjoy the benefits of
the FTAs using the Certificate of Origin upon
submitting their documents. The certificate is
a document that certifies the origin of goods
imported to any country, issued by the Trade
Division, Ministry of Finance and Economy.
Lastly, FTAs allow the participating nations to
share knowledge and expertise on achieving
sustainable economic growth and creating
foreign direct investment (FDI) opportunities.
In line with its Brunei Vision 2035, Brunei
strives to diversify its economy by creating
a more conducive economic environment to
attract more FDIs.
FREE TRADE AGREEMENTS