Having long given its support to regional and multilateral efforts to promote trade, Brunei Darussalam has recently been highly involved in negotiations for a new multilateral free trade agreement that could transform the economies of the Asia-Pacific region.
The leaders of the nine Trans-Pacific Partnership (TPP) countries, after announcing in November that agreement had been achieved on the broad outlines of the TPP, are now aiming to enhance trade and investment among member countries, promote economic growth and development, spur innovation and support job creation. The TPP is also expected to unite its constituent countries – and its future members – into a single trading community to foster trans-Pacific growth.
This could create an agreement that will cover more than $500bn worth of current trade, according to research by Asia-Pacific Economic Cooperation’s (APEC’s) policy support unit.
The TPP is also seen as a model for future free trade agreements, which will forge close ties among the member economies, enhance competitiveness, reduce poverty, raise living standards, benefit consumers and support the creation and retention of jobs.
The partnership is set to tackle issues not covered by past, similar agreements, such as harmonising market regulations, addressing the needs of small and medium-sized businesses as they enter the global marketplace and protecting the environment and workers’ rights.
As one of the four founding members of the TPP – along with Chile, Singapore and New Zealand – Brunei Darussalam has been instrumental in guiding the negotiations, including the expansion of the partnership to include its newest members: Australia, Malaysia, Peru, Vietnam and the US.
The US in particular has a strong motivation to warm up trade ties with Asian economies such as Brunei Darussalam. The International Monetary Fund (IMF) has forecasted that the Asia-Pacific economies will grow faster than the world average until at least the end of 2014, and, in 2009, the East-West Centre estimated that Asia accounted for 27% of total US jobs from exports.
In remarks following the November meeting regarding the TPP, held during the APEC Summit in Honolulu, US President Barack Obama said, “These eight economies would be America’s fifth-largest trading partner. We already do more than $200bn in trade with them every single year, and with nearly 500m consumers between us, there’s so much more that we can do together.”
The TPP’s expansion to include the US – the world’s biggest economy – could have important consequences for both US and ASEAN economies. Indeed, some insiders say the TPP is set to become the US’s single-most important trade initiative in the years ahead.
In this context, Brunei Darussalam has situated itself well to be an important negotiating and trading partner with the Americans.
On the sidelines of a dedication ceremony last October for a new US Embassy in Bandar Seri Begawan, Kurt Campbell, the US’s Assistant Secretary of State for East Asian and Pacific Affairs, said of Brunei Darussalam, “No country has assisted us more as we seek to engage more deeply with ASEAN.”
The US is not alone either in trying to create closer ties with ASEAN, and, by extension, the Sultanate. Although it is not directly involved in the TPP negotiations, Hong Kong’s attention has also been drawn by the headlines the TPP has been garnering lately. In consequence, Hong Kong is now seriously looking at creating closer ties with Brunei Darussalam, according to Fong Ngai, the director of the Hong Kong Economic and Trade Office (HKETO) in Singapore, during a recent visit to the Sultanate.
“We are here in Brunei now because we want to see more growth between Hong Kong and Brunei, so that is what we are here for – to see what opportunities we can facilitate to create the awareness of Hong Kong business people,” he said in statements to local press in October.
Events are now moving swiftly. TPP mini-rounds are being held – most recently in Kuala Lumpur in early December – to address market access negotiations on issues such as investment, services, goods, agriculture and textiles, rules of origin and intellectual property rights.
Plans are underway to hold the 11th round of TPP negotiations in Australia in March, and countries such as Japan, Korea, Canada, Mexico and Indonesia are reported to be interested in participating in the agreement.
With recent instructions to the negotiators from the TPP’s leaders to redouble their efforts to finalise the agreement in 2012 – and with July set as an important target date to reach a final agreement – Brunei Darussalam will be able to take pride in knowing it has been instrumental in the creation of this new trade partnership and eventual new free-trade area. The benefits for the Sultanate of this may be many, not least in showing its potential role as a facilitator and negotiator between nations.