WORLD TRADE  
ORGANIZATION  WT/REG244/1 
6 July 2009 
 (09-3322) 
Committee on Regional Trade Agreements  
  
 
  
 
 
FACTUAL PRESENTATION 
 
Economic Partnership Agreement  
between  
Brunei Darussalam and Japan 
(Goods and Services) 
 
Report by the Secretariat 
 
 
 
 This report, prepared for the considera tion of the Economic Partnership Agreement 
between Brunei Darussalam and Japan has been drawn up by the WTO Secretariat on 
its own responsibility and in full consultati on with the Parties.  The report has been 
drawn up in accordance with the rules and pr ocedures contained in the Decision for a 
Transparency Mechanism for Regiona l Trade Agreements (WT/L/671).  
 Any technical questions arising from this report may be addressed to Ms. Jo-Ann Crawford (tel: +41 22 739 5422).  WT/REG244/1 
Page iii  
 
 
TABLE OF CONTENTS 
 
 
  Page 
I. TRADE ENVIRONMENT 1  
A. MERCHANDISE TRADE  1  
B. TRADE IN SERVICES AND INVESTMENT  4  
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 7  
A. BACKGROUND INFORMATION  7  
III. NATIONAL TREATMENT AND MARKET ACCE SS PROVISIONS ON TRADE IN 
GOODS 8 
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  8  
1. General Provisions 8  
2. Liberalization of trade and tariff lines 9  
(a) Brunei's liberalization schedule 10  
(b) Japan's Liberalization Schedule 13  
B. RULES OF ORIGIN  15  
C. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  17  
D. REGULATORY PROVISIONS ON TRADE IN GOODS  17  
1. Standards 17  
2. Safeguard mechanisms 17  
(a) Bilateral Safeguard Measures 17  
(b) Restrictions to Safeguard the Balance of Payments 18  
(c) Anti-dumping and countervailing measures 18  
(d) Subsidies and State-aid 18  
(e) Customs-related procedures 18  
IV. PROVISIONS ON TRADE IN SERVICES AND INVESTMENT 18  
A. SCOPE AND DEFINITIONS  18  
B. MARKET ACCESS  19  
C. NATIONAL AND MFN  TREATMENT  19  
D. MOVEMENT OF NATURAL PERSONS  20  
E. DENIAL OF BENEFITS  21  
F. LIBERALIZATION COMMITMENTS ON TRADE IN SERVICES  21  
1. Japan 21  
(a) Horizontal commitmen ts / exceptions 21  
(b) Sector specific commitments / exceptions 21  
2. Brunei 23  
(a) Horizontal commitmen ts / exceptions 23  
(b) Sector specific commitments / exceptions 23  
G. LIBERALIZATION COMMITMENTS ON INVESTMENT  24  
1. Japan 25  
2. Brunei 26  
H. SAFEGUARD ACTIONS ON SERVICES TRADE AND INVESTMENT  28  
I. DOMESTIC REGULATION  28  
J. RECOGNITION  28  WT/REG244/1 
Page iv   
 
 
V. PROVISIONS AFFECTING TRADE IN GOODS, SERVICES AND INVESTMENT 28  
A. GOVERNMENT PROCUREMENT  28  
B. INTELLECTUAL PROPERTY RIGHTS  28  
C. ENVIRONMENT  29  
D. SECTOR SPECIFIC PROVISIONS  29  
(a) Energy 29  
E. INSTITUTIONAL PROVISIONS  29  
1. Exceptions 29  
2. Accession and Termination 29  
3. Institutional Framework 29  
4. Dispute settlement 30  
5. Relationship with other agreements concluded by the Parties 31  
ANNEX I 33 WT/REG244/1 
Page 1  
 
 
I. TRADE ENVIRONMENT 
1. The Economic Partnership Agreement (EPA ) between Brunei Darussalam and Japan 
(hereinafter referred to as 'the Agreement') is Ja pan's fifth free trade agreement (FTA) with an Asian 
country (following its FTAs with Singapore, Malays ia, Thailand and Indonesia) and Brunei's first 
bilateral free trade agreement.1 
2. Japan is Brunei's 3rd largest trading partner in  terms of imports in 2006, accounting for 12.8% 
of its total imports, and its largest tr ading partner in terms of 2006 exports.2  Brunei is Japan's 33rd  
largest trading partner in terms of 2006 imports , accounting for 0.40% of its total imports and 
its 99th trading partner in terms of 2006 exports.3 
3. Japan's GDP was estimated at US$4,340 billion in 2006, while that of Brunei reached 
US$9.5 billion in 2005.  With total mercha ndise exports of US$647 billion and imports of 
US$580 billion, Japan ranked in 2006 as the fourth exporter and the fifth importer in the world;  with merchandise exports of US$7.6 billion and im ports of US$1.7 billion, Brunei ranked as the 
81
st exporter and 144th importer in that year.4 
A. MERCHANDISE TRADE  
4. Recent developments in global and intra-Party trade are presented in Charts I.1 and I.2.  Over 
the period surveyed (1998-2006), Brunei has run a consistent trade surplus both on a global basis and with Japan.  Japan, which runs a tr ade surplus with the world, has seen  little change in its exports to 
Brunei during this period. 
5. The commodity structure of trade among the Parti es, as well as of their imports and exports to 
the world in the period 2004-2006, is shown in Ch art I.3 on the basis of Harmonized System (HS) 
section. 
6. A single product category – minerals - made up 93.9% of Brunei's total exports in 2004-2006 
and accounted for 99.9% of Japan's imports from  Brunei.  Japan's four largest export product 
categories – machinery, vehicles, base metals, and ch emicals – made up 79.0% of its total exports in 
2004-2006 and accounted for 90.4% of Brunei's imports from Japan.   
 
                                                     
 
1 Brunei is a party to the AFTA and the Transpacific SEP Agreements. 
2 UNSD, Comtrade database (2006).  Countries of the European Communities are considered 
individually. 
3 UNSD, Comtrade database (2006). 
4 WTO, Trade Profiles. WT/REG244/1 
Page 2   
 
 
012345678
1998 1999 2000 2001 2002 2003 2004 2005 2006012345678US$billion US$billionChart I.1 - Brunei: Merchandise imports from and exports to world 
and Japan, 1998-2006
Imports from Japan
Exports to JapanTotal imports
Total exportsLeft hand scale: Right hand scale:
Sources:  UNSD, Comtrade database : trade with world and Japan (2001-2003;2006 );  WTO-IDB : import from world (1999-2000) ; 
                Brunei submission : import from world (2004-2005); export to world (1998-2000;2004-2005); export to Japan (1999-2000; 2004-2005).
 
 
0100200300400500600700800
1998 1999 2000 2001 2002 2003 2004 2005 20060.00.51.01.52.02.53.0US$billion US$billionChart I.2 - Japan: Merchandise imports from and exports to world 
and Brunei, 1998-2006
Source:  UNSD, Comtrade database.Imports from Brunei
Exports to BruneiTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
  
 WT/REG244/1 
Page 3  
 
 
Chart I.3
Japan and Brunei: product compositio n of merchandise trade, annual avera ge 
(2004-2006)
Japan's imports from Brunei Brunei's imports from Japan
 Sources: Japan : UNSD, Comtrade database; 
                 Brunei : WTO-IDB (imports from Japan, 2004-2005); UNSD, Comtrade database (2006 imports from Japan); 
                                Brunei submission (global trade, 2004-2006)                 Per cent
Total:  US$2.2 billion Total:  US$164 million
Total:  US$516.7 billion Total: US$1.5 billion
Total:  US$ 602.5 billion Total:  US$6.3 billionJapan's global exports Brunei's global exportsJapan's global imports Brunei's global imports 
Machinery
17.9
Animal products 4.0
Chemicals 7.0Textile 2.9
Machinery
40.6Other 
10.4Other 1.8
Base metals 7.6Base metals 11.7Base metals 5.1
Plastics 4.3
Vehicles 23.8Other
0.05Other 
5.6
Machinery 1.3Other 
6.6Vehicles  54.0
Minerals 28.7
Machinery 22.1
Chemicals  6.4Vegetables 3.0
Textiles 5.4Minerals 3.0Other 
7.0
Textiles  9.2
Minerals 93.9Vegetables 5.2Minerals 99.95
Optical 4.4Articles of wood 2.3
Chemicals 8.5Animal products 4.1Articles of wood 3.3
Optical 6.2Vehicles  3.7Prepared foods 3.5Machinery 21.1Base metals 15.3Minerals 3.9
Plastics  3.1Miscellaneous 2.2
Plastics 2.3
Vehicles
15.4Miscellaneous 2.5
Prepared foods 9.4
 WT/REG244/1 
Page 4   
 
 
B. TRADE IN SERVICES AND INVESTMENT  
7. In 2006, Brunei ranked 111th in terms of worl d exports of commercial services and 112th in 
terms of imports.  Its commercial services exports amounted to US$742.3 million, representing 0.03% of world exports, while imports amounted to US $1.21 billion, representing 0.04% of world imports.  
In 2006, Japan ranked fourth in the world both fo r exports and imports of commercial services.  Its 
commercial services exports amounted to US$122. 5 billion, representing 4.43% of world exports, 
while imports amounted to US$143.9 billi on representing 5.48% of world imports.
5   
8. Chart I.4 shows the breakdown of commercial services trade for Brunei in 2003-2006.  
Transportation services, travel services and othe r business services account for the largest shares of 
both imports and exports of commercial services. 
0.00.10.20.30.40.50.60.70.80.91.01.11.21.31.4
2003
2004
2005
20060.00.10.20.30.40.50.60.70.80.91.01.11.21.31.4
2003
2004
2005
2006Chart I.4
Brunei, total commercial services trade, 2003-2006
Exports Imports
Transportation services
Travel 
Source : IMF, BOP CD-Rom, March 2008.Communications servicesUS$ billion
Financial services
Royalties and license Other business services
Government servicesUS$ billion
 Insurance services
 
9. Brunei's global investment position is depicted in Chart I.5.   
 
                                                      
5 WTO, Trade Profiles. WT/REG244/1 
Page 5  
 
 
0.01.02.03.04.05.06.07.08.09.010.0
2000 2001 2002 2003 2004 20050100200300400500600700800
2000 2001 2002 2003 2004 2005Chart I.5
Brunei foreign direct investment stock from world, 2000-2005
Inward Outward
Source : UNCTAD, Foreign Direct Investment databaseUS$ billion US$ million
 
 
10. Table I.1 shows the breakdown of FDI inflows in to Brunei from Japan by industrial sector for 
the period 2000-2007. 
Table I.1 
FDI inflows into Brunei from Japan by industrial sector, US$ million 
Industrial Sector 2000 2001 2002 2003 2004 2005 2006 2007 
Agriculture, hunting & forestry 0 0 0 0 0.02 0 0 0 
Mining and quarrying 5.41 4.47 9.28 7.68 0 0 0 0 
Manufacturing 0 0 0 0.03 13.81 18.57 30.85 66.08 
Construction 0 0 0 0.03 0.48 0 0.14 0.29 
Wholesale and retail trades;  repair of motor 
vehicles and motorcycles;  retail sale of automotive 
fuel 0 0 0 0 0.58 0.93 1.47 0 
Transport, storage and communications 0 0 296.68 0 0 0.01 0 0 
Financial intermediation 0 0 0 0 0.48 0 0 0 
Real estate, renting and business activities 0 0 0 4. 35 0.01 0.16 0.52 0 
Total 5.41 4.47 306.31 12.09 15.37 19.66 32.46 66.89 
Source:  WTO Secretariat, based on data supplied by Brunei. 
 
11. Chart I.6 shows the breakdown of commercial services trade for Japan in 1999-2006.  
Transportation services, other business services, a nd royalties and license fees represent the largest 
categories in terms of exports of commercial serv ices, while transportation services, travel services, 
and other business services are the largest in terms of imports. 
 WT/REG244/1 
Page 6   
 
 
0102030405060708090100110120130140
1999
200020012002
2003
2004200520060102030405060708090100110120130140
1999
20002001
200220032004
20052006Chart I.6
Japan, total commercial services trade, 1999-2006
Exports Imports
Transportation services
Travel services
Sourc e: IMF, BOP CD-Rom.Communications servicesUS$ billion
Construction servicesFinancial services
Computer and information services
Royalties and license Other business services
Personal and cultural services
Government servicesUS$ billion
 Insurance services
Note:     Exports of insurance services were negative in the following years: 1999 (-US$80 million),
              2001 (-US$100 million), and 2002 (-US$380 million).
 
 
 12. Japan's global investment position is depicted in Chart I.7.  Japan's inward stock of foreign 
direct investment (FDI) increased by 140% over the period 2000-2007, while its  stock of outward FDI 
increased by 77% over the same period.
6   
 
                                                      
6 Exchange rates to convert yen to US$ are the following:  2002 – 125.39;  2003 – 115.93;  
2004 - 108.19;  2005 – 110.22; 2006 – 116.30;  and 2007 – 117.75. WT/REG244/1 
Page 7  
 
 
050100150200250300350400450500550
2000 2001 2002 2003 2004 2005 2006 2007050100150200250300350400450500550
2000 2001 2002 2003 2004 2005 2006 2007Chart I.7
Japan inward and outward foreign direct investment stock from  world, 2000-2007
Inward Outward
Source : WTO Secretariat estimates based on data at http://www.boj.or.jp/en.US$ billion US$ billion
 
 
 
13. Japan's bilateral investment position with Brunei is shown in Table I.2.  
Table I.2 
Japan's bilateral investment flows with Brunei, US$ million 
Year 2005 2006 2007 
Inward flow 0 0 0 
Outward flow 0.91 -6.88 -69.64 
Source : WTO Secretariat, based on data provided by Japan. 
 
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
A. BACKGROUND INFORMATION  
14. The Agreement was signed by Japan and Brunei on 18 June 2007 and entered into force on 
31 July 2008. 
15. The goods and services aspects of the Agreement were notified to the WTO by the Parties on 
31 July 2008 under Article XXIV:7(a) of the GATT 1994, and Article V:7(a) of the GATS, 
respectively (document WT/REG244/N/1 and S/C/N/466).  The text of the Agreement is available, 
together with its related Annexes, on the following official websites:  
http://www.mfa.gov.bn/agreements/index.htm
 
http://www.mofa.go.jp/region/asia- paci/brunei/epa0706/index.html  
 
 WT/REG244/1 
Page 8   
 
 
16. The Agreement is composed of 11 Chapters  and has eight related Annexes, as follows: 
Box II.1:  Composition of the Agreement 
Preamble 
Chapter 1:  General Provisions  
Chapter 2:  Trade in Goods  Chapter 3:  Rules of Origin 
Chapter 4:  Customs Procedures   
Chapter 5:  Investment Chapter 6:  Trade in Services 
Chapter 7:  Energy 
Chapter 8:  Improvement of Business Environment Chapter 9:  Cooperation 
Chapter 10:  Dispute Settlement   
Chapter 11:  Final Provisions  
Annexes 
   Annex 1 Schedules in relation to Article 16
 
   Annex 2  Product Specific Rules  
   Annex 3  Minimum Data Requirement for Certificate of Origin 
   Annex 4  Reservations for Existing Measures    Annex 5  Reservations for Future Measures 
   Annex 6  Financial Services 
   Annex 7  Schedules of Specific Commitments in relation to Article 78    Annex 8  Lists of Most-Favoured-Nation Treatment Exemptions in relation to Article 79 
    
   Implementing Agreement pursuant  to Article 10 of the Agreement
 
Source : Economic Partnership Agreemen t between Japan and Brunei. 
 
17. As regards trade in goods, no overall implemen tation period is explicitly stated in the 
Agreement.  However, the Parties' schedules of concessions for merchandise tr ade foresee a transition 
period of up to 15 years for some products.  In add ition, tariff negotiations are scheduled to take place 
in 2012 for a number of products. 
III. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS ON TRADE IN 
GOODS 
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
1. General Provisions 
18. Each Party accords national treatment to the goods of the other Party in accordance with 
Article III of the GATT 1994 (Article 15). 
19. The Parties agree to eliminate customs duties on originating goods as scheduled in Annex 1 of 
the Agreement and not to raise customs duties on originating goods from the level provided for in 
their schedules (Article 16).  Annex 1 contains eight categories relati ng to tariff liberalization between 
the Parties:  i)  the immediate elimination of cust oms duties from the date of entry into force of the 
Agreement (category A);  ii)  the progressive elimina tion of customs duties in four, six, eight, 11, or 
16 equal stages (categories B3, B5, B7, B10 and B15) ;  iii) negotiation in 2012 (category R);  and 
iv) exclusion from liberalization (category X).  Tari ff reductions take place on the date of entry into 
force of the Agreement and on 1 April of following years.     WT/REG244/1 
Page 9  
 
 
20. Upon request by either Party, the Parties agr ee to negotiate improved market access of goods 
designated for negotiation in the respective schedule in Annex 1, in accordance with the terms and 
conditions set out in the schedule (Article 16.3).  
21. The Parties agree not to introduce or maintain  any non-tariff measures on imports from each 
other, which are inconsistent with their oblig ations under the WTO Ag reement (Article 20). 
22. The Parties agree to undertake a general review  of the implementation and operation of the 
Agreement in the fifth calendar year following the Agreement's entry into force and every five years 
thereafter, unless otherwise agreed (Article 119).   
2. Liberalization of trade and tariff lines 
23. The elimination of tariffs applicable between  the Parties is detailed in the corresponding 
Parties' schedules.  Tariff elimination started on 31 July 2008, from the base rates applied in April 
006. 
24. The overall tariff elimination under the Agreem ent is depicted in Tables III.1A and III.1B 
below.7  In the case of Brunei, 74.7% of total tariff lines were already duty-free on an MFN basis in 
2008.8  A further 2% of tariff lines became duty-free for imports from Japan in 2008;  in terms of 
imports from Japan for the period 2005-2007, these fi gures amount to 90.7% and 0%, respectively.  
By the end of the transition period in 2018, a further 22.6% of tariff lines are to be liberalized, accounting for 9.2% of imports from Japan for the pe riod 2005-2007.  Thus, a total of 99.4% of tariff 
lines are to be liberalized under the Agreement, corresponding to 99.9% of imports by value from Japan for the period 2005-2007. 
Table III.1A Brunei 
Tariff elimination commitments under the Agreement  and corresponding average trade values for 2005-2007 
Duty phase-out 
period Number of lines % of total lines in 
Brunei's tariff 
schedule Value of Brunei's imports 
from Japan (2005-2007) 
in million US$ % of Brunei's total 
imports from Japan 
2005-2007 
MFN duty free (2008) 7,986 74.7 159.5 90.7 
2008 216 2.0 0.1 0.0 
2011 1,232 11.5 7.9 4.5 
2013 1,077 10.1 6.5 3.7 
2015 79 0.7 1.4 0.8 
2017 4 0.0 0.0 0.0 
2018 34 0.3 0.4 0.2 
Remain dutiable 61 0.6 0.2 0.1 
Total 10,689 100.0 175.9 100.0 
Note: Based on the HS 2002 nomenclature. 
 
Source :  WTO estimates based on data provided by Brunei Darussalam. 
 
25. In the case of Japan, 41.7% of total tariff lin es were already duty-fr ee on an MFN basis in 
2008.9  A further 40.1% of tariff lines became duty-fr ee for imports from Brunei in 2008;  in terms of 
                                                      
7 Tariff lines containing in-quota duties are ex cluded from all the tari ff-related calculations. 
8 Brunei's tariff is composed of 10, 689 tariff lines at the HS 8-digit le vel, of which 10,630 are subject to 
ad valorem  duties.  The remaining 59 lines are subject to specifi c duties.  Tables III.1A and III.2 reflect Brunei's 
2008 MFN tariffs which include unilateral tariff eliminations/reductions which Brunei undertook in 2008 on 712 lines, whereas the Agreem ent was signed in 2007. 
9 Japan's tariff is composed of 8,912 tariff lines at the HS 9-digit level, of which 8,302 are subject to 
ad valorem  rates;  203 lines to specific duties, 56 to compound duties, 329  to mixed duties, and 22 to other 
duties.  No ad valorem  equivalent rates were provided by Japan.  Only the ad valorem  rate is taken into account 
in the calculation of averages. WT/REG244/1 
Page 10   
 
 
imports from Brunei for the period 2004-200610, these figures amount to 99.97% and 0.02%, 
respectively.  By the end of the transition period in 2023, a further 5.7% of tariff lines are to be 
liberalized;  these lines do not account for any impor ts from Brunei for the period 2004-2006.  Thus, a 
total of 87.4% of tariff lines are liberalized unde r the Agreement, corresponding to 100% of imports 
by value from Brunei for the period 2004-2006. 
Table III.1B:  Japan 
Tariff elimination commitments under the Agreement  and corresponding average trade values for 2004-2006 
Duty phase-out 
period Number of lines % of total lines in 
Japan's tariff schedule Value of Japan's imports 
from Brunei  
(2004-2006) 
in million US$ % of Japan's total 
imports from Brunei 
2004-2006 
MFN duty free (2008) 3,714 41.7 2,171.8 99.97 
2008 3,570 40.1 0.5 0.02 
2011 10 0.1 0.001 0.00 
2013 69 0.8 0.001 0.00 
2015 193 2.2 0.0 0.0 
2018 163 1.8 0.005 0.00 
2023 68 0.8 0.001 0.00 
Remain dutiable 1,125 12.6 0.002 0.00 
Total 8,912 100.0 2,172.3 100.0 
 
Note: Based on the HS 2002 nomenclature.  Calculati ons exclude tariff lines having an in-quota rate. 
 
Source :  WTO estimates based on data provided by Japan. 
 
(a) Brunei's liberalization schedule 
26. The base rates used by Brunei for implementi ng its tariff liberalization scheme provided for 
more than 70% of tariff lines being duty free before th e entry into force of the Agreement.  As can be 
seen from Chart III.1, upon entry into  force the majority of lines liber alized are subject to MFN rates 
of 10% or less.  The elimination of duties on lines subject to MFN duties of 20% or less takes place in 
2013, 2015, and 2018.   
                                                      
10 Given the change in HS nomenclature in 2007, imports for 2004-2006 were used. WT/REG244/1 
Page 11  
 
 
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000200820112013201520172018Chart III.1
Brunei's duty eliminat ion under the AgreementYear of duty free treatment   
Source: WTO Secretariat estimates, based on data provided by Brunei Darussalam.Number of duty-free lines (cumulative)
Duty-free <10% <20% <30% MFN is:
 
 
27. Table III.2 shows Brunei's trade liberalization commitments under the Agreement on the basis 
of products' treatment at the HS 8-digit level orga nized by HS section product categories.  Of the 
10,689 tariff lines in Brunei's tariff schedule, 7,986 were already duty-free on an MFN basis in 2008;  an additional 216 lines were liberalized upon entry into force of the Agreement.  In 2011, an 
additional 1,232 lines are to be subject to liberali zation, followed by further liberalizations in 
subsequent years until 2018.  Of the 61 lines which will remain subject to duties, 24 are agricultural 
products subject to specific rates of duty;  the rest ar e minerals and chemicals.  The average final tariff 
on chemicals is 30%. 
Table III.2 
Brunei:  Tariff elimination unde r the Agreement, by HS section 
Number of duty-free lines  
HS section and description  MFN 
avg. 
2008 
% Total 
No of 
lines  MFN 
duty-
free 
2008  2008 2011 2013 2015 2017 2018 
Remain 
 dutiable  
Average Final 
Tariff (Dutiable)  
I Live animals and animal 
products 0.0 338 338         
II Vegetable products 0.0 388 372       16a  
III Animal or vegetable fats and 
oils 0.0 151 151         
IV Prepared food etc. 0.0 417 405  4     8a  
V Minerals 0.0 213 199       14a  
VI Chemical and products 0.7 1,287 1,126  54 84    23b 30.0 
VII Plastics and rubber 2.3 588 510  69 2 7     
VIII Hides and skins 1.4 112 96  6 10      
IX Wood and articles 15.7 253 53  198 2      
X Pulp, paper etc. 0.0 271 271         
XI Textile and textile article s 0.7 1,185 1,052 133        
Table III.2 (Cont'd)  WT/REG244/1 
Page 12   
 
 
Number of duty-free lines  
HS section and description  MFN 
avg. 
2008 
% Total 
No of 
lines  MFN 
duty-
free 
2008  2008 2011 2013 2015 2017 2018 
Remain 
 dutiable  
Average Final 
Tariff (Dutiable)  
XII Footwear, headgear 5.7 74 14 2 54 4      
XIII Articles of stone 0.5 221 214  6 1      
XIV Precious stones, etc. 2.2 77 43  34       
XV Base metals and products 0.1 1,161 1,156  4    1   
XVI Machinery 10.1 2,202 785 3 649 730  2 33   
XVII Transport equipment 4.0 1,026 823 75 56  72     
XVIII Precision equipment 7.7 398 178 1 52 167      
XIX Arms and ammunition 0.0 28 28         
XX Misc. manufactured articles 2.8 287 160 2 46 77  2    
XXI Works of art, etc. 0.0 12 12         
Total 3.6 10,689 7,986 216 1,232 1,077 79 4 34 61 30.0 
Note: Based on the HS 2002 nomenclature. 
a Specific duty. 
b Mixture of ad valorem  and specific duties (tariff lines with specifi c duties are excluded from the computation). 
 
Source:  WTO estimates based on data provided by Brunei Darussalam. 
 
28. Chart III.2 shows a comparison of average du tiable rates in those HS Chapters where 
preferential duties remain at the end of the implem entation period.  The comparison is made between 
the average preferential and MFN rates for lines subj ect to preferential duties only.  As can be seen 
from Chart III.2, tariff lines in HS Chapter 36 reta in the same duties as t hose on an MFN basis.  
 
0 5 10 15 20 25 30 3536Chart III.2
Brunei:  Average of dutiable rates, by HS Chapter
HS Chapter 
Note: Specific rates are excluded in the calculation.
Source :  WTO Secretariat estimates, based on data provided by Brunei Darussalam.Average rate of duty (%)
MFN Preferential
 
 WT/REG244/1 
Page 13  
 
 
(b) Japan's Liberalization Schedule 
29. The base rates used by Japan for implementi ng its tariff liberalization scheme provided for 
41.7% of tariff lines being duty free before the entry into force of the Agreement.  As can be seen 
from Chart III.3, most of the lines freed of duties in 2008 to 2023 are subject to rates of 10% or less.  The majority of lines subject to duties of up to 30% are liberalized in 2018 and 2023.  Lines subject to 
duties of more than 40% are not liberalized under the Agreement. 
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000200820112013201520182023Chart III.3
Japan's duty elimination under the Agreement
Year of duty free treatment   
Source: WTO Secretariat estimates, based on data provided by Japan.Number of duty-free lines (cumulative)
Duty-free <10% <20% <30% MFN is: <40% Non ad valorem
 
30. Table III.3 shows Japan's trade liberalization commitments under the Agreement on the basis 
of products' treatment at the HS 9-digit level orga nized by HS section product categories.  Of the 
8,912 tariff lines forming Japan's tariff schedule, 3,714 tariff lines were already duty-free on an MFN basis in 2008;  the lines liberalized upon entry into force of the Agreement cover a broad range of 
HS sections.  Of the 1,125 lines which remain subjec t to duties, most are agricultural products.  The 
average final tariff on dutiable items ranges from 4.7% to 22.2%. 
Table III.3 
Japan:  Tariff elimination under the Agreement, by HS section 
Number of duty-free lines  
HS section  MFN 
avg.
% Total 
No of 
lines  MFN 
2008  
2008  2011  2013  2015  2018  2023  
Remain 
dutiable  
Avg. Final 
Tariff 
(Dutiable)  
I Live animals and animal 
products 8.4 508 109 47  42 25  4 281 13.6a 
II Vegetable products 6.1 526 165 131  9 57 45 18 101 20.1a 
III Animal or vegetable 
fats and oils 3.8 85 20 21  1 5 1  37 14.5a 
IV Prepared foods etc. 16.4 761 77 45  13 54 88 46 438 22.2a 
V Minerals 0.5 219 166 32    20  1b  
Table III.3 )Cont'd)  WT/REG244/1 
Page 14   
 
 
Number of duty-free lines  
HS section  MFN 
avg.
% Total 
No of 
lines  MFN 
2008  
2008  2011  2013  2015  2018  2023  
Remain 
dutiable  
Avg. Final 
Tariff 
(Dutiable)  
VI Chemicals and 
chemical products 2.3 1,034 403 618  1 3 1  8 14.2 a 
VII Plastics and rubber 2.4 296 103 179   14     
VIII Hides and skins 10.4 196 66 3      127 16.0  
IX Wood and articles 3.4 233 83 72  3 34 3  38 6.6 
X Pulp, paper etc. 0.0 172 172         
XI Textiles and textiles 
articles 6.5 2,058 86 1,966      6b  
XII Footwear, headgear 16.3 111 6 25      80 21.2 a 
XIII Articles of stone 1.1 160 100 58      2 7.3 
XIV Precious stones, etc. 1.3 80 58 14 3   5    
XV Base metals and base 
metals products 0.9 842 604 238        
XVI Machinery 0.1 959 945 7 7       
XVII Transport equipment 0.1 147 146 1        
XVIII Precision equipment 0.2 294 285 6      3 12.0 
XIX Arms and ammunition 6.9 24  23   1     
XX Misc. manufactured 
articles 1.7 200 113 84      3 4.7 
XXI Works of art, etc. 0.0 7 7         
Total 4.8 8,912 3,714 3,570 10 69 193 163 68 1,125 18.0 
Note: Based on HS 2002 nomenclature;  for  tariff lines subject to TRQs only the out-of-quota duty is included in the tariff-re lated  
 calculations. a Combination of ad valorem  and specific duties. 
b Specific duty 
 
Source:  WTO estimates based on data provided by Japan. 
 
31. Chart III.4, compiled as for Chart III.2 compares th e average dutiable rates by HS Chapter at 
the end of the implementation period with MFN rates corresponding to the same tariff lines for Japan.  
As can be seen from Chart III.4, duties remain in 34 HS Chapters (of which 32 are subject to 
ad valorem  duties);  in all cases the average prefer ential duties are the same as the MFN duties 
applicable for those tariff lines.   WT/REG244/1 
Page 15  
 
 
05101520253035404550
01
02030407
08
09
1011121315
16
171819
20
2122
23
2405101520253035404550
25
29
35
41
42
4344
50
6470
91
9496Chart III.4
Japan: Average of dutiable rates, by HS Chapter
HS  01-24 HS 25-97Average rate of duty (%)  
Average rate of duty (%)  
HS Chapter HS Chapter
MFN Preferential* *
Note: For tariff lines with non ad valorem  components, only the ad valorem  part of alternate rates are included in the calculation; 
          * HS Chapters 25 and 50 contain specific duties.Source :  WTO Secretariat estimates based on data provided by Japan.
 
 
B. RULES OF ORIGIN  
32. Disciplines regarding rules of origin and custom s procedures are set out in Chapters 3 and 4, 
respectively.  Articles 24-36 deal with the rules of origin themselves, while Articles 37-46 cover 
certificate of origin and related procedures.  Article 23 contains definitions relating to rules of origin. 
33. The general requirements for a good to be c onsidered an originating good of a Party 
(Article 24.1) are:  
(a) the good is wholly obtained or produced entirely in the Party;   
(b) the good is produced entirely in the Party ex clusively from originating materials of 
the Party;  or 
(c) the good is produced entirely in the Party using non-originating materials which 
satisfy the product specific rules of Annex 2,  and all other applicable requirements of 
Chapter 3. 
34. Part 2 of Annex 2 sets out specific criteria for non-originating materials to meet in order for 
the good to acquire originating status.  In the case of agricultural products, the specific rules in 
Annex 2 call for the most part for a change of HS chapter;  for a change in HS chapter or heading 
(4-digits) for dairy products (Chapter 4),  sugar (C hapter 17), cocoa (Chapter 18), beverages, spirits 
and vinegar (Chapter 22), residues and wastes (Cha pter 23) and tobacco (Chapter 24);  and for a 
change in HS chapter or subheading (6-digits) for coffee, tea, maté and spices (Chapter 9) and tobacco WT/REG244/1 
Page 16   
 
 
(Chapter 24).  For some products, the rule provides that certain non-originating materials used must 
originate in a non-Party which is a member country of the ASEAN.11  For some products in 
Chapters 21-23 no change in tariff classification is required provided that there is a qualifying value 
content of not less than 40%.  
35. For industrial products, in the majority of cases,  origin is granted if the non-originating 
materials have undergone a change in tariff classificat ion (CTC) on the basis of HS chapters, headings 
or sub-headings - i.e. at the 2, 4 or 6-digit level.  In many cases, where the CTC requirement is applied, it is supplemented with, or replaced by, a qualifying value requirement which establishes the 
minimum value of originating materials (not l ess than 40%) allowed in the good for it to be 
considered originating.  For chemical and plastic products (HS Chapters 28-40), a specific 
manufacturing or processing operation in the form of a chemical reaction, purification, isomer 
separation or biotechnological process may be requi red in some cases.  In some cases of textiles 
(HS Chapters 55-60) the dyeing or printing process is to be accompanied by two or more of the 
48 different operations identified in Annex 2;  pr ovided certain processes such as spinning, dyeing or 
weaving may be performed either in  one of the Parties or in a non-Pa rty which is a member country of 
ASEAN.  Also, in the case of apparel (HS Chap ters 61-63), certain processes, such as knitting, 
crocheting or weaving may be performed in one of the Parties or in a non-Party which is a member 
country of ASEAN. 
36. Article 26 establishes a de minimis  principle whereby a product is considered to be 
originating if all non-originating materials used in  its production that do not undergo an applicable 
CTC do not exceed specific percentages of value, wei ght or volume as set out in Annex 2.  For goods 
in Chapters 28-49 and 64-97, the applicable percenta ge is 10% in value of the good;  and for goods in 
Chapter 50 through 63, 7% of the weight of the go od.  Cumulation allows an originating good of a 
Party used as a material in the production of a good in the other Party to be considered as an 
originating material of the former Party (Article 25).  
37. Articles 30-35 define how certain goods or ma terial (unassembled or disassembled goods;  
fungible goods and materials;  indirect materials;   accessories, spare parts and tools;  packaging 
materials and containers for retail sale;  packing materials and containers for shipment) are to be 
treated/valued when determining the origin of a good for which those material s are used.  Article 27 
contains a list of non-qualifying operatio ns which do not confer origin.   
38. The Parties agree to the establishment of a S ub-Committee on Rules of origin responsible for 
the implementation and operation of the ch apter on rules of origin (Article 47). 
Box III.1:  Rules of Origin:  Basic Features at a Glance 
• Product specific criteria: 
- Wholly obtained or entirely produced goods. 
- For most agricultural goods, a change of HS chapter applies.  For some agricultural goods, certain 
non-originating materials used must origin ate in a member coun try of ASEAN.   
- For most industrial goods, a change of HS chapter, heading or sub-heading, or qualifying value 
requirement (not less than 40%) applies. 
- For some textile and apparel products, certain processes may be performed either in one of the 
Parties or in a member country of ASEAN. 
• Bilateral cumulation. 
• De minimis rule in terms of value or weight of the good (10% in value, or 7% by weight, depending on 
the good). 
 
                                                      
11 This applies to some products in Chapters 4, 11, and 16-20. WT/REG244/1 
Page 17  
 
 
C. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
39. Neither Party may introduce any export duties on goods exported from one Party to the other 
(Article 18).  Neither Party may introduce export su bsidies on any agricultural good which is listed in 
Annex 1 to the WTO Agreement on Agriculture (Article 19).  Neither Party may introduce or 
maintain any non-tariff measures on the export or sale  for export of any good destined for the other 
Party which are inconsistent with each Party's ob ligations under the WTO Agreement (Article 20). 
D. REGULATORY PROVISION S ON TRADE IN GOODS  
1. Standards 
2. Safeguard mechanisms 
(a) Bilateral Safeguard Measures 
40. Each Party may take bilateral safeguard measur es to the minimum extent necessary to prevent 
or remedy the serious injury to its domestic industr y and to facilitate adjustment in the case of imports 
of originating goods of the other Party in such incr eased quantities, in absolute  terms, that constitute a 
substantial cause of serious injury or thre at to its domestic industry (Article 21.1). 
41. Bilateral safeguards may take the form of (a)  suspension of the further reduction of customs 
duty on the originating good;  or (b) increased cust oms duty to the lesser of the applied MFN applied 
rate of customs duty in effect when the safeguard act ion is taken, and the MFN applied rate on the day 
immediately preceding the date of entry into force of the Agreement (Article 21.2).   
42. Bilateral safeguards cannot be imposed for more than three years (compared to four years in 
the WTO Agreement on Safeguards), but can be exte nded up to a maximum total period of four years 
in very exceptional circumstances (Article 21.4(d)).12  The measure may not be applied again to goods 
which have already been subject to a bilateral sa feguard measure, for a period of time equal to the 
duration of the previous measure or one year, whic hever is longer (compared to two years in the 
WTO Agreement on Safeguards), whicheve r is longer (Article 21.4(e)). 
43. Provisional measures may be taken in critical circumstances where delay would cause 
damage which would be difficult to repair.  The duration of provisional measures cannot exceed 
200 days within the overall period of the safeguard (Article 21.9). 
44. An investigation must in all cases be complete d within one year from the date of initiation 
(Article 21.3(b)).13  Only if the investigation demonstrates the existence of a causal link between 
increased imports of the originating good and serious injury or threat to a domestic industry can a 
bilateral safeguard measure be app lied (Article 21.3(d)).  The relevant factors for the investigation 
include the rate and amount of the increase in imports  in absolute terms, the share of the domestic 
market taken by increased imports, and changes in the levels of sales, pr oduction, productivity, 
capacity utilization, profits and losses,  and employment (Article 21.3(c)).14 
45. If necessary, the Parties shall review the bilateral safeguard provisions five years after the 
entry into force of the Agreement, i.e. August 2013 (Article 21.11). 
                                                      
12 Under the WTO Agreement on Safeguards, the maximum period of application of (global) safeguard 
measures is eight years (Article 7.3). 
13 There is no time period for the investig ation in the WTO Agreement on Safeguards. 
14 Article 4.2.(a) of the WTO Agreement on Safeguards includes the rate and amount of the increase in 
imports of the product concerned in both absolute and relative terms.   WT/REG244/1 
Page 18   
 
 
(b) Restrictions to Safeguard the Balance of Payments 
46. Article 22 provides for the Parties to take measur es to safeguard the balance of payments in 
accordance with the conditions established un der Article XII of the GATT 1994, and the 
Understanding on the Balance-of-Payments Provisions of GATT 1994. 
(c) Anti-dumping and countervailing measures 
47. The Parties agree to exclude anti-dumping or countervailing duty applied pursuant to a 
Party’s law and relevant provisions of WTO Agreem ents from the scope of customs duties which are 
subject to the elimination pursuant to  the Agreement (Article 13(b) (ii)). 
(d) Subsidies and State-aid 
48. In Article 19 the Parties agree not to introdu ce any export subsidies on any agricultural good 
which is listed in Annex 1 to the WTO Agreement on Agriculture. 
(e) Customs-related procedures 
49. Customs procedures are detailed in Articles 36- 50 and Chapter 4.  Articles 37-42 lay out 
disciplines for documentation requirements, verification of origin and denial of preferential treatment 
in case of non-compliance with the relevant requi rements.  Annex 3 contains the minimum data 
requirement for the certificate of origin.  The certific ate of origin is to be issued by the government 
authority designated by the exporting Party, which ma y, in turn, designate other entities or bodies to 
be responsible for the issuance of the certificate of origin.  Such entities or bodies are to be notified to 
the other Party in writing (Article 37).   
50. Chapter 4 contains provisions on transparen cy, customs clearance, goods in transit, and 
cooperation as regards customs procedures.  Article 54 provides for the establishment of a 
Sub-Committee on Customs Procedures which is responsible for the review of the implementation 
and operation of customs procedures. 
IV. PROVISIONS ON TRADE IN SERVICES AND INVESTMENT 
A. SCOPE AND DEFINITIONS  
51. Trade in services is mainly govern ed by the Chapter on Trade in Services (Chapter 6), which 
covers all four modes of supply found in the GATS.  The definition of trade in services is the supply 
of a service:  from the Area of a Party into the Area of the other;  in the Area of a Party to the service 
consumer of the other Party;  by a service supplie r of a Party, through commercial presence in the 
Area of the other Party;  or by a service supplier of a Party, through presence of natural persons of that Party in the Area of the other Party (Article 74(w)). 
52. The liberalization of trade in services follo ws a "positive-list approach" whereby the 
obligations of market access (Artic le 75) and national treatment (Ar ticle 76) apply only to the sectors 
expressly listed in the schedules of specific commitments (Annex 7), subject to limitations and conditions or qualifications liste d therein.  A Sub-Committee on Trade in Services is established 
which is responsible for the implementation an d operation of the Chapter on trade in services 
(Article 87). 
53. Chapter 6 does not apply to:  measures affecting air traffic rights, other than measures 
affecting aircraft repair and maintenance services,  the selling and marketing of air transport services, 
and computer reservation system services;  governme nt procurement;  cabotage in maritime transport 
services;  measures affecting natural persons of a Party seeking access to the employment market of WT/REG244/1 
Page 19  
 
 
the other Party, or measures regarding nationality or  residence or employment on a permanent basis;  
and subsidies (Article 73.2).  MFN treatment does not apply to any measure by a Party pursuant to 
immigration laws and regul ations (Article 73.3). 
54. The Agreement also contains a chapter on investment (Chapter 5) which covers all sectors, 
including services.  The chapter's liberalization moda lities follow a "negative-list approach"; while the 
national treatment obligations of both the investment  and services chapters apply to services sectors,  
in the event of any inconsistency between Chap ters 5 and 6 with respect to national and MFN 
treatment and prohibition of performance requirements,  the Chapter on Trade in Services prevails to 
the extent of inconsistency.  As stipulated in Ar ticle 55.3(a) and (b), in the case of inconsistency 
regarding national treatment, MFN treatment or the prohibition of performance requirements, the 
Chapter on Trade in Services would prevail.  In th e case of inconsistency regarding other matters, the 
Chapter on Investment would prevail.  Chapter 5 also  provides for an investor-state dispute settlement 
mechanism (Article 67).  The tribunal may award, separately or in combination monetary damages 
and applicable interest;  and restitution of property if it finds in favour of the complaining investor 
(Article 67.20). 
55. Annex 6 provides supplementary provisions on fi nancial services.  It applies to measures 
affecting the supply of financial ser vices in the four modes of supply of the GATS.  Financial services 
are defined to include all insurance and insurance -related services, and all ba nking and other financial 
services (excluding insurance) (Section 1).  The Annex's provisions on domestic regulation 
(Section 2) and recognition (Section 3) are in line wi th the relevant paragra phs in the GATS Annex on 
Financial Services.   
B. MARKET ACCESS  
56. The Agreement contains provisions on market  access along the lines of Article XVI of the 
GATS (Article 75). 
C. NATIONAL AND MFN  TREATMENT  
57. In the Chapter on Trade in Services, Articles 76 and 79 provide, respectively, for a Party to 
accord to services and service suppliers of the other Party treatment no less favourable than it accords, 
in like circumstances, to its own services and servi ce suppliers (national treatment) and to services 
and service suppliers of any non-Party (MFN treatment).15  Annex 8 contains the lists of MFN 
exemptions for Japan and Brunei.  For Japan su ch exemptions apply in the following sectors:  
maritime freight forwarding services;  international shipping services;  energy services;  and fisheries 
related services.  For Brunei MFN exemptions appl y in legal services, radio and television, financial 
services, reinsurance and retrocession, banking and other financial services, and services sectors not 
scheduled in the Trans-Pacific Stra tegic Economic Partnership Agreement.16  If a Party concludes an 
agreement on trade in services with a non-party, it agrees upon request of the other Party, to consider 
according to services and service suppliers of the other party, with respect to sectors, sub-sectors or 
activities included in its Schedule in Annex 8, treat ment no less favourable that that it accords to 
services and service suppliers of that non-party (Article 79.3).   
58. Article 82.2 provides for the Parties within two years from the date of entry into force of the 
Agreement to forward to the other Party, and to make public a list providing all existing measures 
which are inconsistent with the market access and national treatment provisions of the Chapter, 
                                                      
15 National treatment applies to those sectors inscribed in a Party's schedule of specific commitments as 
laid out in Annex 7.  The MFN treatment obligation applie s to all sectors, subject to the exemptions listed in 
Annex 8.   
16 Issued as document WT/REG229/1. WT/REG244/1 
Page 20   
 
 
whether or not these measures are included in its Schedule of specific commitments contained in Annex 7.  The list of each Party is to be reviewed every three years and revised as necessary. 
59. In the Chapter on Investment, Articles 57 and 58 provide for the Parties to accord national 
and MFN treatment respectively, in like circumstan ces to investors of the other Party and to their 
investments, with respect to investment activities.
17 
D. MOVEMENT OF NAT URAL PERSONS  
60. The Parties grant entry and temporary stay to  each others' nationals in accordance with the 
commitments made in their schedules;  these are typi cally specified in the horizontal section.  In the 
case of Japan, a natural person is a national of Japan, whereas for Brunei it includes both nationals 
and permanent residents of Brunei (Article 74(k )).  As in its GATS schedule, Japan has made 
commitments on mode 4 for the following categori es of personnel:  short term business visitors;  
intra-corporate transferees;  and nationals of Br unei who engage in professional services.  A fourth 
category, nationals of Brunei w ho engage in supplying services which require technology or 
knowledge at an advanced level, on the basis of  a personal contract with a public or private 
organization in Japan, has been added under the Agre ement.  For the most part the commitments on 
mode 4 under the Agreement are the same as tho se under Japan's GATS schedule with the following 
exceptions:  intra-corporate transferees may be transferred to Japan for a period not exceeding 
three years.  (The five year limit on extension of  the period in Japan's GATS schedule, which is based 
on immigration law of Japan at the time of entry in to force of the GATS, is not inscribed in this 
Agreement).  Additionally, for this category, activ ities which require technology or knowledge at an 
advanced level pertinent to natural or human scie nces can also be fulfilled through engagement in 
such activities for at least ten years. 
61. Table IV.1 provides recent data on the m ovement of natural persons to Japan.  
Table IV.1 
Movement of Natural Persons of Brunei to Japan 
Categories 
Year 
Intra-corporate transferees Service providers/ person s responsible for setting up commercial presence Total 
2005 1 248 249 
2006 0 278 278 
2007 0 373 373 
Source: WTO Secretariat, based on data provided by Japan. 
 
62. Brunei's commitments on mode 4 under the Agreement, which exactly mirror those in its 
GATS schedule, are unbound except for measures con cerning the entry and temporary presence of 
intra-corporate transferees at the level of mana gers, executives and specialists who have been 
employed outside Brunei for a period  of not less than one year in their firm immediately preceding the 
date of their application for admission.  As in  its GATS schedule, entry for such intra-corporate 
transferees is limited to a three year period which may be extended for up to two additional years for a 
total term not exceeding five years.  Almost a ll sector-specific commitments made by Brunei are 
"unbound" under mode 4, thus rendering the horizontal commitments for these sectors irrelevant.18   
                                                      
17 Investment activities are defined as the establishm ent, acquisition, expansion, management, conduct, 
operation, maintenance, use, enjoyment and sale or other disposition of investments. 
18 According to Brunei, in 2008 there were a total of 4,453 recorded entries of personnel with Japanese 
nationality into Brunei, and a recorded exit of 4,339 pers onnel.  As of 2008, there are 34 personnel of Japanese 
nationality working in Brunei. WT/REG244/1 
Page 21  
 
 
E. DENIAL OF BENEFITS  
63. Under Articles 70 and 86, a Party may deny the bene fits of Chapters 5 and 6 to an investor or 
service supplier of the other Party if that investor/ service supplier is an enterprise or juridical person 
"owned" or "controlled" by investors/persons of a non-Party, and the denying Party does not maintain diplomatic relations with the non-Party or adopts or  maintains measures with respect to the non-Party 
that prohibit transactions with the enterprise or juri dical person or would be violated or circumvented 
if the benefits of the relevant Chapters were accord ed to the enterprise, its investments or juridical 
person.  Further, subject to prior notification and consultation, a Party may deny the benefits of the 
two Chapters to an investor, its investments or  a service supplier of the other Party if that 
investor/service supplier is an enterprise or a ju ridical person owned or c ontrolled by persons of a 
non-Party and has no substantial business activities in the other Party.
19   
F. LIBERALIZATION COMMITMENTS ON TRADE IN SERVICES  
64.  The schedules of specific commitments are contained in Annex 7.  The schedule of each 
Party specifies terms, limitations and conditions on market access;  conditions and qualifications on 
national treatment;  undertakings relating to add itional commitments;  and where appropriate, the 
time-frame for implementation of such commitments (Article 78). 
65. Under Article 77, the Parties may negotiate add itional commitments with respect to measures 
affecting trade in services not subject to sched uling under Articles 75 a nd 76, including those 
regarding qualifications, standards or licensing matters.   
 
66. The Parties agree to review commitments on tr ade in services with the first review within 
two years from the date of entry into force of th e  Agreement, with the aim of improving the overall 
commitments undertaken by the Parties (Article 88).  In reviewing commitments, the Parties agree to 
take into account paragraph 1 of Article IV of the GATS. 
1. Japan 
(a) Horizontal commitments / exceptions 
67. Japan has no horizontal commitments under the Agreement in modes 1-3.  Its single 
horizontal exception in modes 1-3 in its GATS schedul e is a mode 3 national treatment limitation with 
regard to research and development subsidies wh ich is removed under the Agreement.  Japan's 
horizontal commitments in mode 4 in its GATS schedule are, for the most part, replicated and expanded upon in the Agreement and are described in the section on movement of natural persons. 
(b) Sector specific commitments / exceptions 
68. For business services, under the Agreement Japan has liberalized mode 2 and the recognition 
criteria for advisory services on the law of jurisd iction, and added commitments for other legal 
services suppliers including judicial scriveners, ad ministrative scriveners, certified social insurance 
and labour consultants and land and house surveyors.   Japan has added a number of new commitments 
including urban planning and landscape architectural  services, medical and dental services, veterinary 
services, services provided by midwives, nurses, para-medical personnel and physiotherapists, 
                                                     
 
19 An enterprise or juridical person is "owned" if more than 50% of its equity interests is beneficially 
owned by the person or investor, while an enterprise or juridical person is "controlled" by a person or investor if the person or investor has the power to name a majority of its directors or otherwise to legally direct its actions 
in accordance with the laws and regulations of a Party (Articles 56(b) and 74(f)).   WT/REG244/1 
Page 22   
 
 
research and development services, rental and leasing services without operators, and a number of subsectors under other business services such as technical testing and analysis services, and services incidental to agriculture, mining, manufacturing and energy distribution.  Under placement and supply 
services of personnel, Japan under the Agreement,  indicates exempted occupations whereas its GATS 
schedule positively lists eligible occupations.  
69. For communications services, Japan has fully  liberalized correspondence-delivery services 
supplied by special correspondence delivery business subject to permission/registration requirements 
for related modes of transport services.  In tel ecommunications services, Japan has increased the limit 
of foreign capital participation in Nippon Telegra ph and Telephone to one third (up from a fifth in its 
GATS schedule), and incorporates and expands u pon the reference paper of the GATS through 
additional requirements in connection with the re ference interconnection offer.  Japan has added 
partial commitments (mode 2 only) in telegraph services, radio and television services and radio and 
television transmission services.   
70. For construction and related engineering services,  Japan has added a commitment for services 
related to mining in which it has fully liberalized mode 2 and partially liberalized mode 3.  For 
distribution services, Japan has fully liberalized co mmission agents services, wholesale trade services, 
retailing services, and franchising services except for petroleum, petroleum products, alcoholic 
beverages, and services supplied at public wholesale ma rket;  and partially liberalized retail sales of 
motor fuel, and wholesale trade and retailing services of  steam and hot water.  In educational services 
Japan has removed the establishment requirement  for pre-school education services supplied by 
nursery schools, and has added a commitment for child  day-care services.  In environmental services, 
Japan has removed the limitation on the number of li censes issued for service suppliers of waste oil 
disposal at sea which it maintains in the GATS schedule.   
71. In financial services, Japan incorporates the GATS' Understanding on Commitments in 
Financial Services into its schedule under the Agre ement.  While no additional subsectors have been 
committed under the Agreement, some changes have been made compared to Japan's GATS schedule.  
Under insurance and insurance-related services, unde r modes 1 and 2, Japan has removed compulsory 
coverage by the Government of reinsurance on the compulsory automobile third party liability 
insurance and the prohibition on supply of insuran ce intermediation services through an intermediary 
in Japan.  Insurance intermediation services under th e Agreement are subject to commercial presence 
for modes 1 and 2.  For banking and other financial services, Japan has removed the requirement that 
commercial presence for investment trust management services must be juridical persons established 
in Japan.   
72. For health related services and recreational services, Japan has added new commitments in 
other human health services and social services.  In  recreational, cultural and sporting services, Japan 
has added new commitments in libraries, archives,  museum and other cultural services and in sporting 
and other recreational services.  In other services not included elsewhere, Japan has added new 
commitments on washing, cleaning and dyeing services, laundry collection services, and hairdressing 
and other beauty services. 
73. For transport services, Japan has added the sub-sector of rental of vessels with crew 
(excluding vessels flying the flag of Japan) under maritime transport services and liberalized modes 1-3 of international maritime transport servi ces.  Additional transport sectors committed under 
the Agreement comprise maritime auxiliary transp ort covering maintenance and repair of vessels, 
maritime cargo handling services, container station and depot services, and maritime freight 
forwarding services;  internal waterways transport covering maintenance and repair of vessels;  rail transport services covering passenger transportation,  freight transportation, pushing and towing 
services, and supporting services for rail transport services;  road transport services covering 
passenger transportation, rental of commercial vehicles with operator, and supporting services for 
road transport services,  pipeline transport covering transportation of fuels;  and services auxiliary to WT/REG244/1 
Page 23  
 
 
all modes of transport covering cargo-handling services, storage and warehouse services relating to 
petroleum and petroleum products, and freight transport agency services.   
2. Brunei 
(a) Horizontal commitments / exceptions  
74. Brunei has replicated its mode 3 limitation on market access in its GATS schedule which 
specifies that its commitments are unbound for measure s concerning foreign equity or interest in 
companies established or wishing to establish a commercial presence.  Under its GATS schedule, 
Brunei specifies that national treatment for mode  3 is unbound except with respect to existing 
commercial presence, and then lists some nationality and residence requirements.  Under the 
Agreement, Brunei has listed no limitations under m ode 3 except for the following:  registration 
and/or establishment requirements for all forms of legal entity;  more than 50% of the board of 
directors must be nationals or residents of Brunei;  foreigners are not eligible to register for sole 
proprietorships and;  for partnershi ps, applications by foreigners are subject to prior clearance through 
the Registrar of Companies.     
(b) Sector specific commitments / exceptions 
75. For business services, Brunei has GATS commitments in professional services only for 
auditing services and medical and dental services.  U nder the Agreement, Brunei has, in addition,  
scheduled commitments in architectural and e ngineering services (subject to foreign equity 
participation limits of 50% and registration require ments).  Under other business services, Brunei has 
added the category of other services in additi on to its GATS commitments.  Under other business 
services, a sector uncommitted to in Brunei's GATS schedule, it has liberalized modes 1 and 2 of 
advertising planning and creati ng and placement services, and marketing research and public opinion 
polling services, both of which are subject to forei gn equity participation lim its of 30% as regards 
mode 3.   
76. For telecommunication services, Brunei has added commitments in telex and telegraph 
services subject to licensing, and in voicemail servic es subject to a foreign equity participation ceiling 
of 30% and licensing requirements.  Under cons truction services, a sector in which it has no GATS 
commitments, Brunei has undertaken commitments acr oss all sub-sectors of construction and related 
engineering services subject to a foreign equity part icipation limit of 55%, a registration requirement, 
and a 50% limit on the number of foreign nationals that may comprise the total number of employees 
of a company. 
77. For distribution services, educational services, environmental services, health related and 
social services, and recreational, cultural and sporting services, Brunei has, like in its GATS schedule, undertaken no commitments in the Agreement.   
78. For financial services, Brunei has added commitments on the provision and transfer of 
financial information, financial da ta processing and related software by providers of other financial 
services.  This commitment is unbound for modes 1, 2, and 4, and mode 3 is subject to approval by the Ministry of Finance.   
79. For tourism and travel related services, fo r which Brunei has no GATS commitments, it has 
scheduled hotel lodging services subject to a foreign equity participation ceiling of 30%.  In transport 
services, for which it has limited commitments only with  regard to the rental of aircraft with crew 
under its GATS schedule, Brunei has added passe nger and freight transportation under maritime 
transport services (except for transport of energy goods).  Both commitments are unrestricted under 
modes 1 and 2.  Under mode 3, they are subject to a foreign equity participation limit of 40% under 
market access, and national treatment is unbound.  Under air transport services, Brunei has undertaken WT/REG244/1 
Page 24   
 
 
new commitments on aircraft maintenance and repair services, except that these are unbound under mode 3.  
G. L
IBERALIZATION COMMITMENTS ON INVESTMENT  
80. The investment Chapter adopts a negative-list a pproach to the scheduling of liberalization 
commitments, such that the obligations of na tional and MFN treatment (but not performance 
requirements) apply fully except for any measure with  respect to the sectors or matters specified in 
Annex 4 for which the central government or au thorities of a Party maintains a non-conforming 
measure which exists on the date of entry into fo rce of the Agreement.  Unlike typical negative-list 
agreements, Annex 4 lists, in two pages, the sect ors where measures inconsistent with national 
treatment or MFN are maintained, but does not list the non-conforming measures themselves.  The 
Parties agree to notify such measures on the date of entry into force of the Agreement (Article 62.3).20 
Sectors where existing non-conforming measures are ma intained at the local level of government do 
not have to be listed, although they  are nevertheless bound, meaning they can be maintained but that 
new non-conforming measures, or more restrictive ones, cannot be introduced.   
81. Some measures listed in Annex 4 are subject to a "ratchet" clause (Article 62.1(d)) meaning 
that if a Party unilaterally amends or repeals an y existing non-conforming measure with the effect of 
making it more liberal, such liberalization is bound an d becomes its new level of commitment towards 
the other Party.  For those measures in Annex 4 wh ich are indicated with an asterisk (which applies 
exclusively to all of Brunei's entries in A nnex 4), either Party may amend or modify a 
non-conforming measure provided that it does not d ecrease the conformity of the measure with the 
obligations of national and MFN treatment and it is  not more restrictive to existing investors and 
existing investments than that applied immediat ely before the amendments or modifications 
(Article 62.1(e)).21   
82. Article 62.3 provides for the Parties, on the date  of entry into force of the Agreement, to 
notify the following:  the sector or matter to whic h the measure is maintained;  the domestic or 
international industry classification codes, where a pplicable, to which the measure relates;  the 
obligations under the Agreement with which the measure does not conform;  the source of the 
measure;  and a succinct description.  
83. Annex 5 sets out the sectors or matters for wh ich a Party reserves the right to maintain 
existing, or adopt new or more restrictive, measur es that do not conform to the obligations of national 
and MFN treatment (Articles 62.4).  Article 62.5 provides for the Parties on the date of entry into force of the Agreement to notify the following:  th e sector or matter with respect to which the measure 
is maintained, the domestic or international indust ry classification codes, where applicable, to which 
the reservation relates;  the obligations under the Agreement with whic h the measure does not 
conform;  the source of the measure;  and a succinct description of the measure.
 Subsequent 
amendments to Annexes 4 or 5, or adoptions of new measures in Annex 5 are to be notified to the 
other Party (Article 62.7).   
                                                      
20 Notification of the measures took place on the date of  entry into force of the Agreement, i.e. 31 July 
2008 and are available on Japan's Ministry of Foreign Affairs website at:  
http://www.mofa.go.jp/policy/economy/fta/brunei.html . 
21 All six of Brunei's reservations in Annex 4 are indicated with an asterisk.  "Existing investors" and 
"existing investments" are defined respectively as investors whose investments are present in the Area of a 
Party, and investments that are pr esent in the Area of a party, imme diately before the amendment or 
modification of any non-conforming measure;  and any expansion or diversification of existing investments by existing investors after the amendment or modification of any non-conforming measure shall not be regarded as 
existing investments to the extent of such expansion or diversification. WT/REG244/1 
Page 25  
 
 
84. Article 61 prohibits performance requirements in relation to investments.  For the purposes of 
the Investment Chapter, the Annex to the Agre ement on Trade-Related Investment Measures in 
Annex 1A of the WTO Agreement is incorporated into the Agreement, mutatis mutandis .  The Parties 
agree to enter into further consultations with the aim of reviewing issues pertaining to the prohibition 
of performance requirements within five years from th e date of entry into force of the Agreement. 
85. Each Party accords to investments made in its Ar ea by investors of the other Party, treatment 
in accordance with customary international law, including fair and equitable treatment and full 
protection and security (Article 59).  Article 63 prohibits the expropriatio n or nationalization of 
investments unless certain specific conditions are fulf illed.  Under Article 65, each Party allows all 
transfers relating to investments in its Area except in certain specific circumstances, such as in the 
case of bankruptcy or criminal or penal offences. 
86. The obligations of national and MFN treatment do not apply to any measure covered by the 
exceptions to, or derogations from, obligations unde r Articles 3 and 4 of the TRIPS Agreement, as 
specifically provided in Articles 3, 4 and 5 of the TR IPS Agreement (Article 62.9).  The provisions of 
the investment chapter do not apply to govern ment procurement and to services supplied in the 
exercise of governmental authority (Article 55.2). 
87. The Agreement contains an exception for measur es taken for prudential reasons (Article 69), 
which has been modelled on the same provision cont ained in the GATS Annex on Financial Services.  
Article 72 provides for the establishment of a sub-committee on investment.   
1. Japan 
88. Japan has undertaken a number of reservations for existing measures for 22 different sectors 
or matters, mostly for national treatment and to a lesser extent for MFN treatment.  Such measures 
cover inter alia  agriculture, forestry and fisheries, and related services;  air transport;  banking;  
railway transport;  road passenger transport;  security guard services;  and water transport 
(see Table IV.2).  Japan has also taken a number of reservations for future measures as listed in 
Annex 5 for 10 different sectors or matters, mostly in  the form of national treatment reservations.  The 
sectors listed include aerospace, arms and explosiv es, broadcasting, energy, fisheries, public law 
enforcement and correctional services and social  services, and subsidies (see Table IV.3). 
Table IV.2 
Existing non conforming measures listed by Japan  
Sector, sub-sector or activity Reservation Description of existing measure 
Agriculture, Forestry and Fisheries NT/MFN Domicile, reside nce requirement - establishment in case of a legal person 
Agriculture, Forestry and Fisheries and 
related services NT Prior notification requirement 
Banking NT Commercial presence (head offices) in Japan 
Heat Supply NT Prior notification requirement 
Telecommunications Nationality limitations related to voti ng rights apply to Nippon Telegraph and 
Telephone (NTT) Corporation for the purposes of entering the name and 
address in its register of shareholders  – Nationality requirement for assuming 
the office of director or auditor of this corporation and NTT East Corporation 
and NTT West Corporation 
Telecommunications and Internet 
based services NT 
Prior notification requirement 
Drugs and medicines manufacturing 
Leather and leather products 
manufacturing NT Prior notification requirement 
Matters related to the nationality of a 
ship NT Japanese nationality shall be given to  a ship whose owner is a Japanese 
national or a company established under Japanese law of which at least two-
thirds of executives are Japanese nationals 
Mining NT Nationality requirement 
Oil Industry NT Prior notification requirement 
Table IV.2 (Cont'd)  WT/REG244/1 
Page 26   
 
 
Sector, sub-sector or activity Reservation Description of existing measure 
Security guard services NT Prior notification requirement 
Transport:   
− Air transport NT/MFN Prior notification and nationality require ment for permission – authorization 
requirement for foreign air carriers 
− Aircraft service NT Prior notification and nationa lity requirement for permission 
− Registration of aircraft NT Registration in the national registry subject to nationality requirement 
− Freight forwarding business NT/MFN Registration requirement – permission shall be granted to non-nationals on 
the basis of reciprocity 
− Freight forwarding business using 
air transportation only NT/MFN Freight forwarding businesses using a) air transportation within Japan are 
subject to nationality requirement;  b)  international air transportation is 
subject to registration/authorization requirement granted on the basis of 
reciprocity 
− Railway transport NT Prior notification requirement 
− Road passenger transport NT Prior notification requirement 
− Water transport NT Prior notification requirement except oceangoing/seagoing transport and ship 
leasing industry excluding coastwise ship leasing industry 
− Water transport NT/MFN Ships not flying the Japanese flag are prohibited from entering Japanese ports 
not open to foreign commerce and from  carrying cargo or passengers between 
Japanese ports. 
Water supply and waterworks NT Prior notification requirement 
Source:  http://www.mofa.go.jp/pol icy/economy/fta/brunei.html . 
 
Table IV.3 
Future Non conforming measures listed by Japan  
Sector Reservation Description of measure 
Aircraft/space industry 
Arms and explosive 
manufacturing industry 
Energy industry 
Broadcasting industry NT Right to adopt or maintain any measure relating to investments in these industries 
Fisheries NT/MFN Right to adopt or maintain any measure relating to investment in fisher ies in the territorial 
sea, internal waters, exclusive economic  zone and continental shelf of Japan 
Land transaction NT/MFN With respect to acquisition or lease of land prope rties in Japan, prohibitions or restrictions 
may be imposed by Cabinet Order on foreign nationals or legal persons, where Japanese 
nationals or legal persons are placed under identical  or similar prohibitions or restrictions in 
the foreign country. 
Source:  http://www.mofa.go.jp/pol icy/economy/fta/brunei.html . 
 
2. Brunei 
89. In its Annex 4, Brunei has taken a number of reservations for existing measures for 
six different sectors or sub-sectors, all of which concern national treatment reservations (and in one 
case, an MFN treatment reservation).  The reservations taken by Brunei affect registration requirements for the establishment of businesses and partnerships in all sectors, and local equity 
requirements in manufacturing, agriculture, fisheries and forestry (see Table IV.4).   
90. Brunei has also taken a number of reservations  for future measures as listed in Annex 5 for 
13 different sectors or matters, in the form of national or MFN treatment reservations.  Ten of the 13 reservations apply to all sectors.  Brunei has ta ken a national treatment reservation for all sectors 
by virtue of royal decree (though any modificati on of an existing measure or adoption of a new 
measure is not to be more restrictive to existing investors of Japan and their investments than the 
measure applied immediately before).  Other re servations applying to all sectors relate to:  
commercialization of projects, privatization or di vestment of assets owned by the Government of 
Brunei;  licensing requirements;  transfer or disposal of equity interests or assets of a state enterprise, 
a government entity, or a government-linked company;   provision of subsidies or grants provided by 
Brunei or their continued receipt;  activities rela ting to food security and those utilizing local 
resources;  land transactions;  and all services sec tors on condition that measures maintained or WT/REG244/1 
Page 27  
 
 
adopted do not constitute a violation of obligations under Chapter 6 on trade in services.  In addition 
Brunei has taken an MFN reservation with regard to all sectors for its relations with ASEAN.22  In the 
case of the Trans-Pacific Strategic Economic Part nership Agreement, Brunei has taken an MFN 
reservation with regard to all sectors.23  In the case of fisheries and forestry, Brunei has taken a 
national treatment reservation, and for mining and quarrying it has listed both national and MFN 
treatment reservations (see Table IV.5). 
Table IV.4 
Existing non conforming me asures listed by Brunei 
Sector, sub-sector or activity Reservation Description of existing measure 
All sectors NT Registration requirements for establishment of businesses 
All sectors NT/MFN Registration of Partnership 
Manufacturing 
Agriculture 
Fishery 
Forestry  
NT  Local equity requirements 
Source:  http://www.mofa.go.jp/pol icy/economy/fta/brunei.html. 
 
Table IV.5 
Future non conforming measures listed by Brunei 
Sector, sub-sector or activity Reservation Description of existing measure 
All sectors NT Brunei reserves the right to adopt or maintain any measures as stipulated by royal 
decree. 
All sectors NT Matters relating to commercialization of project s, privatization or divestment of assets 
owned by the Government. 
All sectors NT Mattes relating to licensing requirements. 
All sectors NT Matters relating to the transfer or disposal of equity interests or assets of a state 
enterprise, a government entity, or a government-linked company 
All sectors NT Mattes relating to the provision of subsidie s or grants provided by Brunei or the 
continued receipt of such subsidies or grants 
All sectors NT Matters relating to food s ecurity and those utilizing local resources 
All sectors NT Matters relating to land transactions 
All services sectors NT/MFN Brunei reserves the right to adopt or mainta in any measure relating to investments in 
services, on condition that such measures  do not constitute a violation of its 
obligations under Chapter 6 (services)  including National Treatment and MFN 
treatment. 
All sectors MFN MFN treatment may not be accorded to investors of Japan and their investments with 
respect to preferential treatment granted under any ASEAN agreement. 
All sectors MFN MFN treatment may not be accorded to investors of Japan and their investments with 
respect to preferential treatment granted under the Trans Pacific Strategic Economic 
Partnership for a period of three years from  the date of entry into force of this 
Agreement. 
Fishery NT Brunei reserves the right to adopt or maintain any measure relating to any fishery 
activity in its Area, including its Exclusive Economic Zone. 
Forestry NT Brunei reserves the right to adopt or maintain any measure relating to the 
development, conservation and sustaina ble management of forest resources. 
Mining and Quarrying – Oil 
and Gas Upstream Activities NT/MFN Brunei reserves the right to adopt or mainta in any measure relating to the oil and gas 
upstream activities. 
Source:  http://www.mofa.go.jp/pol icy/economy/fta/brunei.html. 
 
                                                      
22 If Brunei enters into an ASEAN agreement on invest ment after the date of en try into force of this 
Agreement, it will consider according to investors of Japan and their investments treatment no less favourable 
than that it accords to ASEAN member countr ies pursuant to such an ASEAN agreement. 
23 MFN treatment may not be accorded to investors of Japan and their investments with respect to 
preferential treatment granted under th e Trans-Pacific Agreement, for a peri od of three years from the date of 
entry into force of the Agreement.  Th e Parties agree to review this reserv ation before the expiry of the three 
year period. WT/REG244/1 
Page 28   
 
 
H. SAFEGUARD ACTIONS ON SERVIC ES TRADE AND INVESTMENT  
91. In the event of serious balance of payments and external financial difficulties or threat 
thereof, or where movements of capital cause or threaten to cause serious difficulties for 
macroeconomic management in part icular, monetary, fiscal and exchange rate policies, the Parties 
may adopt or maintain restrictions relating to cross-border capital transactions with regard to 
investments (Article 68), while Artic le 85 permits the Parties to adopt or maintain restrictions on trade 
in services, including on payments or transfers on trade in services on which the adopting/maintaining 
Party has undertaken specific commitments.  Such me asures are to ensure that the other Party is 
treated as favourably as any non-Party;  to be consiste nt with the Articles of Agreement of the IMF;  
avoid unnecessary damage to the commercial, economic a nd financial interests of the other Party;  not 
exceed those necessary;  and be temporary in nature. 
I. DOMESTIC REGULATION  
92. With a view to preventing unnecessary barriers to  trade in services, Article 80 provides that 
the Parties shall endeavour to ensure that me asures relating to qualifi cation requirements and 
procedures, technical standards and licensing requi rements are: based on objective and transparent 
criteria, such as competence and the ability to supply the service;  not more burdensome than 
necessary to ensure the quality of the services;  and do not constitute  a disguised restriction on the 
supply of the service in the case of licensing procedures. 
J. RECOGNITION  
93. Where a Party recognizes the education, or e xperience obtained, requirements met or, licenses 
or certifications granted in a non-Party, it is not bou nd to accord this treatment to the other Party.  The 
Party shall provide the other Party an adequate op portunity to demonstrate that the education or 
experience obtained, requirements met, or licenses or  certifications granted in the other Party should 
also be recognized (Article 81.3).   
V. PROVISIONS AFFECTING TRADE IN GOODS, SERVICES AND INVESTMENT 
A. GOVERNMENT PROCUREMENT  
94. In Article 98 the Parties agree to accord MFN treatment to goods, services and suppliers of 
the other Party;  enhance transparency of me asures regarding government procurement;  and 
implement in a fair and effective manner the measures regarding government procurement.24 
B. INTELLECTUAL PROPERTY RIGHTS  
95. Article 97 contains provisions governing intellectual property.  Each Party made 
commitments to endeavour to improve its intellect ual property protections system;  comply with 
obligations set out in the international agreements  relating to intellectual property to which it is a 
party and endeavour to join those to which it is not  a party;  endeavour to ensure transparent and 
streamlined administrative procedures concerning inte llectual property rights;  endeavour to ensure 
adequate and effective enforcement of intellectual property rights;  and endeavour to promote public 
awareness of protection of intellectual property.   
                                                      
24 Japan is a signatory of the WTO Agreement on Government Procurement, Brunei is not. WT/REG244/1 
Page 29  
 
 
C. ENVIRONMENT  
96. In Article 71 the Parties recognize that it is  inappropriate to encourage investments by 
investors of the other Party by relaxing environmen tal measures.  The Parties agree not to waive or 
otherwise derogate from such environmental meas ures as an encouragement for the establishment, 
acquisition or expans ion of investments in their Areas. 
D. SECTOR SPECIFIC PROVISIONS  
(a) Energy  
97. Chapter 7 contains provisions relating to energy as classified in HS subheadings 2709.00, 
2711.11 and 2711.21.  Provisions include written noti ce with regard to import and export restrictions, 
and energy regulatory measures.  The Parties rec ognize the importance of bilateral cooperation in the 
energy sector, including in areas such as policy development, human resource development and 
technological development.  The Parties agree to endeavour to minimise, in  accordance with their 
applicable laws and regulations, in an economical ly efficient manner, the harmful environmental 
impacts of all activities related to energy.  In Ar ticle 95, they agree to establish a Sub-Committee on 
Energy.  
E. INSTITUTIONAL PROVISIONS  
1. Exceptions 
98. General exceptions for goods and services ar e maintained by incorporating into the 
Agreement mutatis mutandis  Article XX of the GATT 1994 for goods25 and Article XIV of the GATS 
for services-related issues (Article 8).26  Article 8.3 sets out security exceptions that are similar to 
those in Article XXI of the GATT 1994 and Article XIV bis of the GATS.  Article 7 excludes taxation 
measures from the scope of the Agre ement, with certain exceptions. 
2. Accession and Termination 
99. There are no accession provisions in the Agre ement.  Either Party may terminate the 
Agreement by giving one year's advance notice in writing to the other Party (Article 122).  
3. Institutional Framework 
100. In Article 11 the Parties agree to establish a Jo int Committee, the functions of which include 
the following: to review and monitor the implementa tion and operation of the Ag reement;  to consider 
and recommend to the Parties any amendments to the Agreement;  and to superv ise and coordinate the 
work of all Sub-Committees est ablished under the Agreement. 
101.  Articles 3-6 deal with measures to enhance tr ansparency in and between the Parties.  The 
Parties agree to make publicly available their resp ective laws, regulations and judicial decisions of 
general application as well as international agreem ents which affect any matter covered by the 
Agreement (Article 3).  Provisions are also made for administrative procedures (Article 4);  review 
and appeal (Article 5);  confidential informati on (Article 6); and enqui ry points (Article 12). 
                                                      
25 For the purposes of trade in goods, rules of origin, customs procedures,  investment (other than 
"Protection from Strife");  and energy. 
26 For the purposes of investment (other than "P rotection from Strife") and trade in services. WT/REG244/1 
Page 30   
 
 
4. Dispute settlement 
102. Chapter 10 sets out procedures on the settlement of disputes between the Parties relating to 
the implementation or application of the Agreem ent.  Article 107 provides a choice-of-forum clause 
for matters arising under both the Agreement and any other international agreement to which both 
Parties are parties.  Once the complaining Party has chosen the forum to settle the dispute, that forum 
shall be used to the exclusion of the other forum (exclusive forum clause).  However, this shall not 
apply if substantially separate and distinct ri ghts or obligations under different international 
agreements are in dispute. 
103. Under Chapter 10, the Parties firstly seek to resolve disputes through consultations which are 
requested in writing (Article 108).  In the event that  Parties fail to enter into consultations within 
30 days from the date of receipt of the request for consultations (15 days in  cases of urgency) or if 
consultations between the Parties fail to settle the dis pute within 60 days after the date of receipt of 
the request for consultations (30 days in cases of urgency), the complaining Party may request the 
establishment of an arbitral tribunal (Article 110.1(b)). 
104. Articles 110-112, deal respectively with the establishment, functions, and proceedings of 
arbitral tribunals.  The arbitr al tribunal meets in closed sess ion and its deliberations and the 
documents submitted to it are kept confidential (Article 112.1 and 112.3).  Where a Party has 
provided information or written submissions designa ted to be confidential, the other Party may 
request a non-confidential summary of the info rmation or written submissions which may be 
disclosed publicly (Article 112.4).  The award of the arbitral tribunal is final and binding on the 
Parties (Article 112.10). 
105. Article 67 provides for the settlement of investme nt disputes between a Party and an investor 
of the other Party.  In the case of an investme nt dispute an investor of a Party can request 
consultations or negotiations with the Party concerned.  Any matter,  which is not resolved within 
five months from the date of written request for consultations, may be re ferred to international 
arbitration, such as the International Centre for Settlement of Investment Disputes (ICSID) if the 
Convention is in force between the Pa rties;  or to the Additional Fac ility Rules of the ICSID if it is 
not;  to UNCITRAL;  or in accordance with other arb itration rules if agreed with the disputing Party.  
Notice of an investor's intention to submit an invest ment dispute to conciliation or arbitration must be 
notified in writing to the other Party at least 90 days before the submission of it.  The arbitral award is 
final, binding and shall be executed without delay under the law of the Party concerned 
(Article 67.21).   
106. The dispute settlement procedures provided for in Chapter 10 of the Agreement do not apply 
to the Agreement's provisions on improvement of business environment set forth in Chapter 8 including those relating to intellectual propert y and government proc urement (Article 100). 
107. Table IV.6 provides a synopsis of the Ag reement's Dispute Settlement Provisions. WT/REG244/1 
Page 31  
 
 
Table IV.6:  Synopsis of the Agree ment's Dispute Settlement Provisions 
 
 
5. Relationship with other agreements concluded by the Parties 
108. The Agreement's relationship with other agreem ents concluded by the Parties is provided for 
in Article 9, where the Parties reaffirm their ri ghts and obligations under the WTO Agreement or any 
other agreements to which both Parties are parties.   
109. Table V.1 lists all other regional trade agreem ents (RTAs) notified and not notified to the 
GATT/WTO and in force to which Japan and Brunei are party. Request for Consultations (Art.108.1)
Establishment of Arbitral Tribunals (Art.110) 
Issuance of Award (Art.112.7 and 112.8) 
Notification of Implementation Period (Art.114.2)
Consultation on Compensation (Art.114.3) Referral to Arbitral Tribunal (Art.114.5) 
Suspension of Concession (Art. 114.7)Consultations (Art. 108.2)
Consultation (Art. 114.8)
Referral to Arbitral Tribunal (Art.114.8)Issuance of Award (Art.114.9)
Issuance of Award (Art.114.9)WT/REG244/1 
Page 32   
 
 
Table V.1 
Japan and Brunei Darussalam:  Participation in other RTAs  (notified and non-notified in force), as of June 2009  
GATT/WTO Notification Partner/ 
Agreement Date of 
entry into 
force Type of 
agreement Year WTO Provision 
JAPAN  
Philippines 11.12.08 Goods & Services 2008 GATT Art. XXIV & GATS Art. V 
Indonesia 01.07.08 Goods & Services 2008 GATT Art. XXIV & GATS Art. V 
Thailand 01.11.07 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
Chile 03.09.07 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
Malaysia 13.07.06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Mexico 01.04.05 Goods & Services 2005 GATT Art. XXIV & GATS Art. V 
Singapore 30.11.02 Goods & Services 2002 GATT Art. XXIV & GATS Art. V 
ASEAN * Goods & Services Not notified 
BRUNEI DARUSSALAM  
Trans-Pacific SEP 
(New Zealand, Singapore, Chile) 28.05.06 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
ASEAN Agreements:     
 ASEAN-China 01.07.07 Services 2008 GATS Art. V 
 ASEAN-China 01.07.03 Goods 2004 Enabling Clause 
 AFTA 28.01.92 Goods 1992 Enabling Clause 
 ASEAN-Rep. of Korea * Goods & Services Not notified 
 ASEAN-Japan * Goods & Services Not notified 
*  Not yet in force for all Parties.  Dates of entry into force differ. 
 
AFTA: ASEAN Free Trade Area. 
Source: WTO Secretariat.  
 WT/REG244/1 
Page 33  
 
 
ANNEX I 
 
Indicators of Trade Liberalization under the Agreement  
 
 
1. A comparison between the scheduled elimination of tariffs applied to the Parties' mutual 
imports and the duty rates applied by them on MFN imports is shown in Tables A.1 (Brunei) and A.2 
(Japan), by agricultural (WTO definition), non-ag ricultural and total products.  Applied MFN duty 
rates in 2006 serve as a comparison. 
2. Brunei's average applied MFN rate in 2008 was 3.6%;  the average applied tariff on 
agricultural products is zero while that applied to non-agricultural products is 4%.  Duty-free tariff 
lines account for 74.7% of all tariff lines.  Japan's expor ters enjoyed an absolute margin of preference 
of 1.0% for non-agricultural goods and an overall margin of preference of 0.9% vis-à-vis the 
prevailing average applied MFN tariff, as well as an increase to 76.7% in the share of Brunei's 
duty-free lines.  By the end of the transition period in 2018, average tariffs on all goods are set to be 
zero and the share of duty-free tariff lines will rise to 99.4%. 
Table A.1  
Brunei: Indicators of MFN and preferential tariff rates on imports from Japan 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin 
of goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2008 3.6 14.4 74.7 0.0 5.0 97.7 4.0 14.4 71.8 
Japan 2008 2.7 11.7 76.7 0.0 3.8 97.7 3.0 11.7 74.1 
 2009 2.0 8.7 76.7 0.0 2.5 97.7 2.2 8.7 74.1 
 2010 1.3 5.6 76.7 0.0 1.3 97.7 1.5 5.6 74.1 
 2011 0.6 5.3 88.3 0.0 0.0 98.0 0.7 5.3 87.1 
 2012 0.3 3.0 88.3 0.0 0.0 98.0 0.4 3.0 87.1 
 2013 0.1 6.2 98.3 0.0 0.0 98.0 0.1 6.2 98.5 
 2014 0.0 4.1 98.3 0.0 0.0 98.0 0.1 4.1 98.5 
 2015 0.0 5.7 99.1 0.0 0.0 98.0 0.0 5.7 99.4 
 2016 0.0 4.3 99.1 0.0 0.0 98.0 0.0 4.3 99.4 
 2017 0.0 3.2 99.1 0.0 0.0 98.0 0.0 3.2 99.4 
 2018 0.0 30.0 99.4 0.0 0.0 98.0 0.0 30.0 99.8 
a WTO Definition.   
Source:   WTO Secretariat estimates based on data provided by Brunei Darussalam. 
 
3. Japan's average applied MFN rate in 2008 was 4.8%;  the average applied tariff on 
agricultural products was roughly three times higher th an that applied to non-agricultural products.  
Duty-free tariff lines account for 41.7% of all tariff li nes.  Exporters of Brunei enjoyed an absolute 
margin of preference of 1.2% for agricultural goods vis-à-vis  the prevailing average MFN tariff in 
2007, and 2.6% for non-agricultural goods.  Overall,  exporters of Brunei enjoyed a margin of 
preference of 2.3% vis-à-vis the prevailing average applied MFN tariff, as well as an increase 
to 81.7% in the share of Japan's duty-free lines.  By the end of the transition period in 2023, these 
figures will increase to 2.9% and 87.4% with a si gnificant difference in the number of tariff lines 
liberalized for agriculture (59.4%) and non-agricultural products (94%). 
 
  
 
  WT/REG244/1 
Page 34   
 
 
Table A.2 
Japan:  Indicators of MFN tariff rates and pref erential rates for imports from Brunei Darussalam 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2008 4.8 8.3 41.7 11.3 15.8 25.6 3.4 6.2 45.6 
Brunei Darussalam 2008 2.5 15.0 81.7 10.1 18.5 40.2 0.8 10.2 91.8 
 2009 2.4 14.7 81.7 9.9 18.0 40.2 0.8 9.9 91.8 
 2010 2.3 14.4 81.7 9.7 17.6 40.2 0.8 9.8 91.8 
 2011 2.3 14.1 81.8 9.4 17.2 40.2 0.8 9.7 91.9 
 2012 2.2 13.7 81.8 9.2 16.7 40.2 0.8 9.5 91.9 
 2013 2.2 14.1 82.6 8.9 16.7 41.3 0.7 10.2 92.6 
 2014 2.1 13.8 82.6 8.7 16.2 41.3 0.7 10.0 92.6 
 2015 2.1 15.7 84.8 8.5 18.2 47.6 0.7 11.8 93.8 
 2016 2.0 15.5 84.8 8.3 17.9 47.6 0.7 11.8 93.8 
 2017 2.0 15.3 84.8 8.2 17.6 47.6 0.7 11.8 93.8 
 2018 2.0 17.2 86.6 8.0 21.1 55.4 0.7 12.0 94.0 
 2019 2.0 17.1 86.6 7.9 20.9 55.4 0.7 12.0 94.0 
 2020 2.0 17.0 86.6 7.9 20.8 55.4 0.7 12.0 94.0 
 2021 2.0 17.0 86.6 7.8 20.6 55.4 0.7 12.0 94.0 
 2022 2.0 16.9 86.6 7.8 20.5 55.4 0.7 12.0 94.0 
 2023 1.9 18.0 87.4 7.7 23.1 59.4 0.7 12.0 94.0 
 
a WTO Definition. 
 
Note:  For tariff lines subject to TRQs only the out-of-quota duty  is included in the tariff-related calculations;  lines with specific duties 
 and the non- ad valorem  component of lines with compound and altern ate rates are excluded from the calculations. 
Source:  WTO Secretariat estimates based on data provided by Japan. 
 
4. Table A.3 shows the market access opportunities in  Japan for Brunei's top 25 exports, which 
in 2005-2007 accounted on average for 98.1% of Brunei's global expor ts.  The table shows at which 
year all HS 8-digit tariff lines corresponding to  the product definition (i.e. applying to the 
6-digit HS Code used to capture the volume of trade) will become duty-free in Japan. 
5. Brunei's top 25 exports cover a total of 46 HS 9- digit tariff lines.  Twelve of Brunei's top 
25 exports (which account for 15 HS 9-digit lines and 95.5% of Brunei's average global exports in the 
period 2005-07) already benefit from zero MFN duti es in Japan's market, the remaining 13 products 
(accounting for 30 tariff lines and a further 2.6% of  Brunei's average global exports) gain immediate 
duty-free access in 2008.  The margin of preference granted to Brunei by Japan under the Agreement 
varies from 8.1 to 10.9 percentage points. 
Table A.3 – Market access opportunities in Japan  under the Agreement for Brunei's top 25 exports 
Access Conditions to Japan's import markets  
MFN (2008)  Brunei's top export products in 2005-2007  
No. of tariff lines  
HS number and description of the product  Share in global 
exports MFN 
average  Duty-free Dutiable Duty-free 
in 2008  
270820 Pitch coke 63.1 0.0 1   
271111 Natural gas 30.8 0.0 1   
610899 Women's or girl' slips, of other textile 
materials 1.2 8.1  3 3 
845921 Machine tools for drilling, numerically 
controlled 0.5 0.0 1   
610610 Women's or girls' blouses, shirts and shirt- 
Blouses, knitted or crocheted, of cotton 0.4 9.1  3 3 
721935 Flat-rolled products of stainless steel, of a 
thickness of less than 0.5 mm 0.4 0.0 4   
880330 Other parts of airplanes or helicopters 0.4 0.0 1   
610510 Men's or boys' shirts , knitted or crocheted, 
of cotton 0.2 9.7  3 3 
Table A.3 (Cont'd)  WT/REG244/1 
Page 35  
 
 
Access Conditions to Japan's import markets  
MFN (2008)  Brunei's top export products in 2005-2007  
No. of tariff lines  
HS number and description of the product  Share in global 
exports MFN 
average  Duty-free Dutiable Duty-free 
in 2008  
611420 Garments, made up of knitted or 
crocheted fabrics, of cotton 0.1 8.1  2 2 
847989 Other machines and mechanical 
appliances 0.1 0.0 1   
820750 Tools for drilling, other than for rock 
drilling 0.1 0.0 2   
610462 Trousers, bib and brace overalls, breeches 
and shorts, of cotton 0.1 10.9  2 2 
610463 Trousers, bib and brace overalls, breeches 
and shorts, of synthetic fibres 0.1 10.9  2 2 
841182 Other gas turbines, of a power exceeding 
5,000 kW 0.1 0.0 1   
620312 Men's or boys' suits, of synthetic fibres 0.1  9.6  2 2 
620520 Men's or boys' shirts, of cotton 0.1  7.4  1 1 
611020 Jerseys, pullovers, cardigans, waist-coats 
and similar articles, knitted or crocheted, 
of cotton 0.1 10.5  4 4 
610432 Jackets and blazers, of cotton 0.1  10.9  2 2 
621131 Ski suits, of wool or fine animal hair 0.0  9.6  2 2 
840690 Parts of steam turbines and other vapour  
turbines 0.0 0.0 1   
621143 Other garments, women's or girls', of 
man-made fibres 0.0 11.0  2 2 
720410 Waste and scrap of cast iron 0.0 0.0 1   
870540 Concrete-mixer lorries (concrete-mixers) 0.0 0.0 1   
610342 Trousers, bib and brace overalls, breeches 
and shorts, of cotton 0.0 10.9  2 2 
852510 Transmission apparatus 0.0 0.0 1   
Total of above  98.1  16 30 30 
 
6. Table A.4 shows the market access conditions in Brunei for Japan's top 25 exports, which in 
2005-2007 accounted for 34.6% of its global exports.  Thirteen products accounting for 263 tariff 
lines and 23.1% of Japan's global exports already benefited from zero MFN duties in Brunei's 2008 
tariff schedule.  In 2011, five products, accounti ng for 74 tariff lines and 5.0% of Japan's global 
exports are scheduled to become duty-free.  Five products become duty-free in 2013 and one in 2018.  
One product – other petroleum oils and oils obtaine d from bituminous minerals – remains subject to 
duties.  The margin of preference granted to Japan by Brunei under the Agreement varies from 5 to 20 
percentage points. 
Table A.4 – Market access opportunities in Brune i under the agreement for Japan's top 25 exports 
Access Conditions to Brunei's import markets  
MFN (2008)  Japan's top export products in 2005-2007  Number of 
tariff lines  Duty-free in  
HS number and description of the product  Share 
in 
global 
exports 
(%) Avg. 
MFN 
applied 
rate 
(%) 
Duty-free 
Dutiable 2008 2011 2013 2018 
Remain Dutiable 
 
870323 Motor cars and other motor vehicles, of 
a cylinder capacity exceeding 1,500 cc 
but not exceeding 3,000 cc 6.2 0.0 50       
870324 Motor cars and other motor vehicles, of 
a cylinder capacity exceeding 3,000 cc 4.5 0.0 32       
854221 Electronic integrated circuits and 
microassemblies, digital 2.5 0.0 2       
870322 Motor cars and other motor vehicles, of 
a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc 1.9 0.0 16       
847330 Parts and accessories of the machines of 
heading 84.71 1.9 0.0 3       
Table A.4 (Cont'd)  WT/REG244/1 
Page 36   
 
 
Access Conditions to Brunei's import markets  
MFN (2008)  Japan's top export products in 2005-2007  Number of 
tariff lines  Duty-free in  
HS number and description of the product  Share 
in 
global 
exports 
(%) Avg. 
MFN 
applied 
rate 
(%) 
Duty-free 
Dutiable 2008 2011 2013 2018 
Remain Dutiable 
 
852990 Other parts suitable for use solely or 
principally with the apparatus of 
headings 85.25 to 85.28  1.7 5.0  15  10 5   
870840 Gear boxes (transmissions) 1.5 20.0  16 10 6    
847989 Machines and mechanical appliances, 
other 1.4 15.0 1 3  1 2   
852540 Still image video cameras and other 
video camera recorders; digital cameras 1.4 5.0  4  2 2   
890190 Other vessels for the transport of goods 
and other vessels for the transport of 
both persons and goods 1.3 0.0 10       
870899 Parts and accessories of motor vehicles 
of headings 87.01 to 87.05, other 1.2 20.0  11 7 4    
853400 Printed circuits. 0.5 20.0  4  1 3   
854890 Electrical parts of machinery or 
apparatus, not specified or included 
elsewhere in this Chapter. 0.5 20.0  5  2 3   
271019 Other petroleum oils and oils obtained 
from bituminous minerals other than 
light oils and preparations 0.5 0.0 12 6     6 
842952 Machinery with a 360° revolving 
superstructure 1.0 15.0  2  2    
854140 Photosensitive semiconductor devices, 
including photovoltaic cells whether or 
not assembled in modules or made up 
into panels; light emitting diodes 0.8 0.0 4       
840991 Parts suitable for use solely or 
principally with spar k-ignition internal 
combustion piston engines 0.7 15.3 7 28  28    
890120 Tankers 0.7 0.0 6       
381800 Chemical elements doped for use in 
electronics, in the form of discs, wafers 
or similar forms; chemical compounds doped for use in electronics. 0.6 0.0 2       
854229 Other monolithic integrated circuits 
other than digital 0.6 0.0 2       
870333 Motor cars and other motor vehicles, of 
a cylinder capacity exceeding 2,500 cc 0.6 0.0 54       
870422 Motor vehicles for the transport of 
goods, g.v.w. exceeding 5 tonnes but not 
exceeding 20 tonnes 0.6 0.0 42       
870829 Parts and accessories of motor vehicles 
of headings 87.01 to 87.05, other 0.6 20.0  17 10 7    
853690 Lamp-holders, plugs and sockets, other 
apparatus 0.5 20.0  4  3  1  
Total of above 34.6  283 115 27 66 15 1 6 
Source:  WTO estimates based on data provided by Brunei Darussalam and UNS D, Comtrade data. 
 
__________