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Tuesday, December 29, 2015

Brunei at the forefront of TPP ratification

Leo Kasim

AS negotiations for the Trans Pacific Partnership (TPP) agreement have concluded with each country going into the ratification process, Brunei could become one of the first countries to ratify the trade deal due to the sultanate’s more straightforward government system.

The trade deal was signed on October 5, 2015 in the US after about five years of trade negotiations and heated debates in which member countries sought to achieve a balanced deal.

In a November statement, Brunei’s Ministry of Foreign Affairs and Trade (MoFAT) said that the TPP will create a market with a combined gross domestic product (GDP) of US$30 trillion, which is 40 per cent of global gross domestic product, once it is ratified.

Brunei is one of the countries to agree to the trade pact along with Australia, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.

Increased market access for Brunei

Last month, MoFAT said that the Sultanate will benefit from the trade deal which will improve market access and investment flows.

MoFAT also said that the government sees the country’s participation in the pact will help drive its economic successes in the future.

“The government of Brunei sees its participation in the TPP (as one) of significant importance that will drive national economic development, ensuring that our nation can continue to prosper in the future,” the ministry said in a November statement.

MoFAT said the Brunei’s total trade with the TPP countries under has amounted to $10 billion in 2014, a figure which further signifies the importance of the trade pact to the Sultanate’s economy.

It added that the TPP will provide greater predictability and transparency in the trade and investment regime, boosting confidence among investors and complement efforts to improve the business environment in the country.

Changes to improve labour standards

Brunei could see itself implementing labour reforms as part of its commitment to the TPP, according to the US President last month during the ASEAN Business and Investment Summit 2015 in Kuala Lumpur.

In his address, President Barack Obama said that Brunei, along with Malaysia and Vietnam, has committed to “specific and concrete reforms” to reach the high labour standards stated in the trade deal.

Both Brunei and the US agreed to work on legal reforms labour reforms under the Brunei-US Labour Consistency Plan, a bilateral instrument in accordance with Chapter 19 of the TPP, in order to improve labour standards for Brunei.

The seven-page document, which was made publicly available in the full text of the TPP, mentioned specific reforms for Brunei such as the creation of a workers’ union, prohibiting discrimination, enacting minimum wage laws and having procedures for collective bargaining and strikes.

The document also said the country must ensure the effectiveness of its mechanisms such as allowing anonymous reporting of labour violations to have procedures for referring complaints to labour inspectors for record and follow up purposes.

President Obama said that better conditions for workers will help boost wages which improves working conditions and improve living standards.

No price shocks on consumer goods

After TPP negotiations concluded in October, some senior diplomats in the country said that prices of consumer goods in Brunei may not see drastic changes as a result of the trade deal.

Craig Allen, the US Ambassador to Brunei, said that Bruneian duties have already been “relatively low and the country has had an open economy, adding that the issues have to be seen from a “product by product” basis.

“In the areas where tariffs are currently high, that (lowering of prices) would be the case,” he said in October when the full TPP text was not released yet.

In a separate interview, Todd Mercer, Australian High Commissioner to Brunei, said that the TPP will not have a major effect on consumer goods prices in Brunei due to existing low tariffs.

“We’ll need to look into the details of things...because it really depends on your import makeup. There are already low tariffs between Brunei and Australia (so) it will not significantly affect consumer goods prices,” he said.

Sumber - The Brunei Times

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