Wider and closer: Implementing ASEAN agreements means more open markets
The Sultanate has long been a relatively open economy, encouraging international trade and investment. Tariff barriers have historically been low, with these continuing to fall as the country widens its participation in international trading agreements and organisations. This trend is due to accelerate as ASEAN, which Brunei Darussalam will chair in 2013, moves towards a more integrated common market by 2015.
LOOKING AHEAD: Indeed, the ASEAN Economic Community (AEC), which begins in 2015, is set to boost trade throughout the region, with Brunei Darussalam, Malaysia, Singapore, Indonesia, the Philippines and Thailand constituting a first wave of states to fully implement the AEC. Cambodia, Vietnam, Laos and Myanmar will be part of a second wave later on. Tariff barriers will be reduced to zero on all but a few reserved items, while non-tariff barriers are likely to be tackled in all but strategic areas. Both capital and labour are thus heading towards a much freer environment.
Brunei Darussalam has already achieved much in meeting the AEC’s goals. The ASEAN Secretariat marked the Sultanate’s AEC Scorecard highly back in May 2012, with eight out of 19 categories already fully implemented and the remainder more than half completed. At the same time, the country has been widening its portfolio of free trade agreements (FTAs) with other nations, both within the ASEAN bloc and further afield.
WORKING TOGETHER: In the former category, the Brunei Darussalam, Indonesia, Malaysia, PhilippinesEast ASEAN Growth Area (BIMP-EAGA) has brought together an ASEAN sub-group to boost trade within the region encompassing Borneo, the Sulu Sea, Mindanao, Sulawesi and Papua. The organisation is now working on an Implementation Blueprint 2012-16, which seeks to speed up project implementation.
Meanwhile, via ASEAN, Brunei Darussalam is signed up to a host of FTAs with countries inside and outside the region. ASEAN FTA negotiations are also ongoing with the EU, while the prospect of a US-ASEAN FTA is now also widely being discussed. Relations between Brunei Darussalam and the US will likely be strengthened by a planned visit to the Sultanate by US President Barack Obama for the 2013 ASEAN summit.
Brunei Darussalam is also among the nations that set up the Trans-Pacific Partnership back in 2005. Since then, the US, Australia, New Zealand, Malaysia, Peru and Vietnam have all been discussing membership, and a Reuters news report stated in February 2013 that the US and Japan had reached an agreement on how to include the Japanese government in negotiations.
NEW HORIZONS: Pushing out further still, Brunei Darussalam is also a member of the Asia Cooperation Dialogue, which brings together the countries of North and South Asia, the Gulf, Central Asia and South-east Asia; the Asia-Middle East Dialogue; and the Asia-Europe Meeting, which involves Asian countries and the EU.
Looking east, Brunei Darussalam is also a member of the Forum for East Asia-Latin America Cooperation, as well as being a member of the Commonwealth. Given the centrality of Islam to the Sultanate’s governing philosophy, the country is also a member of the Organisation of the Islamic Conference (OIC). On a global scale, the Sultanate is a member of the WTO, the IMF, the UN and the Non-Aligned Movement.
In the year ahead, it seems likely that advancing ASEAN towards its 2015 AEC goals will be a priority for the Sultanate as ASEAN chair. The AEC should also benefit the country’s policy of diversification, with a more open regional market expected to encourage enterprise and competitiveness. However, there will also be challenges to accepting a wider, more open market.
Brunei Darussalam will help several other important ASEAN agenda items move forward. These include the Drug-free ASEAN 2015 initiative, the Master Plan on ASEAN Connectivity and the Humanitarian Assistance and Disaster Relief initiative – the latter important in a region susceptible to large-scale environmental and geological disturbances. In all these areas, Brunei Darussalam seems ready to throw its diplomatic weight as ASEAN chair behind the push for progress.