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 the Association of Southeast Asian Nations (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.
At the end of a four-day ASEAN Summit in Vietnam on November 15, 2020, leaders from 15 Asia-Pacific nations sealed one of the biggest trade deals in history – the Regional Comprehensive Economic Partnership (RCEP) Agreement.
The agreement was signed by Australia, China, Japan, the Republic of Korea and New Zealand, as well as the 10 ASEAN member states: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. It is a significant milestone whereby the RCEP becomes the largest FTA in the world, creating a trading area that covers a third of the world’s population, gross domestic product (GDP) or trade volume with ASEAN at its centre.
His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam in a titah emphasised that the RCEP Agreement will play a significant role in the region’s postpandemic recovery efforts. His Majesty also expressed confidence that the RCEP would be an engine for growth that will shape the region’s economic landscape in the years to come.
Negotiations on the RCEP Agreement took eight years, with the first negotiations having commenced in Brunei in 2013.
In June 2020, following the 36th ASEAN Summit, leaders of ASEAN released a vision statement whereby it was expressed that they intend to deepen and expand economic cooperation with all partners, with emphasis on ASEAN’s FTA partners, to support economic integration in the region.
The country’s active engagement of FTAs provides various benefits for local businesses, which will also spur economic growth.
Through FTAs, local businesses can enjoy the reduction or elimination of tariffs. This will reduce trade transaction costs as a whole and will lead to cheaper prices of goods, while also promoting free flow of goods in the region, hence enabling local businesses to expand in a larger scale. With cheaper costs to promote and sell their products, local businesses have the opportunity to enter foreign markets.
Local businesses can enjoy the benefits of the FTAs by using a Certificate of Origin upon submitting their supporting documents. A Certificate of Origin is a document that certifies the origin of the goods imported to any country, issued by the Trade Facilitation and Promotion Division, Ministry of Finance and Economy.
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