WORLD TRADE  
ORGANIZATION  WT/TPR/M/196 
10 April 2008 
 (08-1646) 
Trade Policy Review Body 
25 and 27 February 2008  
 
 
 
TRADE POLICY REVIEW 
 
BRUNEI DARUSSALAM 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Yonov Frederick Agah (Nigeria) 
 
   Page 
 
I.
 INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF 
 BRUNEI DARUSSALAM 4 III.
 STATEMENT BY THE DISCUSSANT 6  
IV. STATEMENTS BY MEMBERS 9  
V. REPLIES BY THE REPRESENTATIVE OF BRUNEI DARUSSALAM 
AND ADDITIONAL COMMENTS 15  
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 17  
 
 
     
 
    
 
    
 
 
 
Note:   Advance written questions by WTO Member s and the replies provided by Brunei Darussalam 
are reproduced in document WT/TPR/M/196/Add.1 and will be available online at http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.  WT/TPR/M/196 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The second Trade Policy Review of Brunei Darussalam was held on 25 and 
27 February 2008.  The Chairperson (H.E. Mr . Yonov Frederick Agah) welcomed the Brunei 
delegation, led by Mr. Dato Lim Jock Hoi (Permane nt Secretary, Ministry of Foreign Affairs and 
Trade), and which included Her Royal High ness Princess Muta-Wakillah Bolkiah and  
H.E. Mr. Alaihuddin Taha, as well as the discussant H. E. Mrs. Marie-Claire Swärd Capra (Sweden).  
As usual, the discussant would speak in her persona l capacity and not as a country representative.  In 
accordance with establishe d procedures, the discussant had provided in advance outlines of the main 
issues she intended to raise (document WT/TPR/D/171). 
2. The Chairperson recalled the purpose of Trade Po licy Reviews and the main elements of the 
meeting’s procedures.  The report by Brunei Da russalam was contained in document WT/TPR/G/196 
and that of the WTO Secretariat in WT/TPR/S/196.   As indicated in WT/TPR/6/Rev.1, the Member 
under review should provide written answers, by the beginning of the review meeting, to questions 
submitted at least two weeks before the meeting.  Questions posed subsequently should be answered, 
to the extent possible, before the start of the second session of the meeting.  Questions left 
unanswered at the end of the second session should be  answered in writing no later than one month 
after the meeting.  The following delegations had submitted questions in writing at least two weeks in 
advance of the meeting and these had been tran smitted to the Brunei delegation:  Canada, the 
European Communities, Australia, and the United St ates.  Copies of these questions and of Brunei's 
answers were available in the meeting room.  Wr itten questions by Colombia, Japan, the Separate 
Customs Territory of Taiwan, Penghu, Kinmen an d Matsu (Chinese Taipei), India, and Brazil, 
submitted after the two-week deadline, had also been  transmitted to the Brunei delegation, and copies, 
along with the answers, were available in the m eeting room.  All advance questions and responses 
were reproduced in WT/TPR/M/196/Add.1.  
3. Brunei maintained strong support for an open, rules-based and non-discriminatory trading 
system, as well as for the process of the Doha Deve lopment Agenda.  Brunei had continued to reduce 
its already low tariff rates, in particular under ASEAN as well as more recent preferential 
arrangements.  In several trade-related ar eas – notably TRIPS, customs procedures, 
telecommunications and standards – Brunei had ma de significant improvements to its regulatory 
framework.  The country owed its economic prospe rity to its abundant pe troleum and natural gas 
resources, which had increased their shares of GD P, exports, and government revenue during the 
review period.  Brunei's economy had thus become more heavily dependent on revenue from the oil 
and gas sector, despite the Government's emphasis on diversification.  The authorities appreciated that 
they had to deal with volatile gove rnment revenue caused by energy price instability, and prepare for 
the expected depletion of oil and gas resources over the next two decades, essentially by creating 
sustained growth in the non-oil private sector, wh ile reducing the role of the Government in the 
economy.  Brunei had adopted a new approach to attracting FDI to fu rther diversification, focusing on 
a few large projects, and the Government expected th em to improve the international image of Brunei, 
kick-start economic diversification, and provide significant employment opportunities for the local 
labour force.   
4. The Chairperson informed members that AITIC ha d requested ad hoc observership to the next 
meeting, the Review of Madagascar, a participa ting member of AITIC.  UNIDO, as a provider of 
technical assistance to Madagascar, had also asked to observe the Review.  Members agreed with the 
proposal to grant these requests.   WT/TPR/M/196 
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  II. OPENING STATEMENT BY THE REPRES ENTATIVE OF B RUNEI DARUSSALAM 
5. The representative of Brunei Darussalam
 noted that since its last Review, Brunei had 
maintained an open-economy policy that was conduciv e to trade and investment.  The Ninth National 
Development Plan (2007-2012) was aimed at strengthening this policy through the widening of Brunei's economic base, human resources capacity development, reinforcement of institutional 
capacity, and ensuring sustainable development.  Up to B$9.5 billion was due to be spent on 
826 projects across the economy during this five-year pe riod.  Brunei's trade and trade-related regime 
had witnessed fundamental reforms.  In terms of improving Brunei's legislation and regulatory 
framework for trade in goods, customs legislation ha d been brought closer in to line with WTO rules, 
and the Customs Valuation Agreement had been full y implemented.  Brunei had also enacted several 
pieces of trade-related legislation in relation to regional and bilateral agreements, notably for the 
ASEAN CEPT agreement and the ASEAN-China FTA on trade in goods. 
6. In the field of investment, Brunei welcomed forei gn participation in most sectors, in particular 
export-oriented industries, where full foreign par ticipation was possible.  Brunei had improved the  
investment climate through the signing of bilateral investment treaties and doub le taxation agreements 
with some WTO Members, among them China, Singapor e, Viet Nam and, most  recently, Bahrain.  
The investment climate had been further enha nced by the BEDB Act, which empowered the 
autonomous foreign investment board – the Brunei Ec onomic Development Board – to attract FDI.   
7. Brunei had strengthened its financial services s ector by enacting banking legislation that 
would enhance the regulatory and supervisory frame work, to bring it into line with international 
standards;  up to ten Orders had already been enacted.  With the inclusion of a Money Laundering 
Order 2000, steps had been taken to prevent mone y laundering activities regarding the development of 
the Brunei International Financial Centre (BIF C).  The telecommunications sector had been 
transformed:  the role of regulator and service-provi der, which at the time of the previous Review 
were carried out by the same body, was now divided.   A new law, the AiTi Order, was enacted to 
empower an independent regulatory body – the Authority for Info-Communication and Technological 
Industry (AiTi) – to oversee the telecoms sector, in order to avoid conflicts of interest between the 
service provider and the regulator.  Brunei had also  introduced an element of competition into the 
mobile telephony services by granting a licence to a new local service provider.  The intellectual 
property rights regime had improved with the enac tment of new legislation to further protect IP 
holders, aimed at bringing Brunei's IP laws mo re into line with international standards. 
8. The Government realized that the oil and g as industry formed the backbone to the economy, 
but it was important to strengthen development in  the non-oil and gas sector.  In 2001, Brunei had 
embarked on a revised strategy to enhance diversif ication by setting up the BEDB with a strategy for 
attracting FDI into a few mega projects for deve loping downstream oil and gas activities;  and 
four clusters, comprising financial services, business services, hospitality and tour ism, and logistics.  
The strategy had resulted in the establishment of  the Sungai Liang Industrial Park, and the 
development of a logistics hub in Pulau Muara Besar that aimed to attract FDI of up to US$4.5 billion 
and create up to 1,000 jobs.  Memoranda of understanding (MoUs) had been signed to establish 
petrochemicals and manufacturing industries at the Sungai Liang Industrial Park to capitalize on 
Brunei's proven gas reserves.  Brunei had attracted  FDI worth US$350 million from Japan to engage 
in methanol production with further plans to manufact ure urea, acetic acid, and biofuels for export.  
The port project at Pulau Muara Besar included an export-processing zone to accommodate industries 
such as aluminium smelting, halal food distribution,  petrochemicals, oil refining, logistics, and 
warehousing.  The export-processing zone would also bring opportunities for SME employment. 
9. Brunei was also working to become a hub for Islamic finance, for which legislation was 
currently being drafted.  The Syariah Financial S upervisory Board was established in 2006 to regulate 
Islamic banking activities, and in April 2006 Brunei  successfully launched its first government  WT/TPR/M/196 
 Page 5 
 
 
  short-term sukuk (Islamic bonds) worth B$150 million.  Brunei was also diversifying into halal brand 
products and aimed to become a global player in  halal food production and certification.    
10. Regarding sustainable development policy, Br unei aimed to stop illegal trade in endangered 
species.  Legislation was in its final preparatory stage to regulate imports to and exports from Brunei 
of endangered plants and animals consistent with its  obligations to the CITES.  Brunei also played an 
active role in the tripartite Heart of Borneo Initiative, a conservation project between Brunei, 
Malaysia, and Indonesia.  The project aimed to ensu re sustainable forest resources management and to 
protect biological diversity, complementing Brunei 's national illegal-logging enforcement efforts and 
development of the eco-tourism industry. 
11. Brunei recognized that data collection was not one of its strengths due to human resource 
constraints and limitations in institutional capacity.  This hampered Brunei's ability to formulate, 
communicate, and administer certain government pol icies, which had resulted in the impression of a 
lack of transparency and accountability.  Efforts had been made to address these challenges.  For 
example, the Brunei Darussalam Long-Term Develo pment Plan sought to counter these challenges 
through an education strategy an d an institutional development stra tegy to upgrade human resources 
and strengthen institutional capacity.  The educati on strategy promoted research, development, and 
innovation in national institutions, which would even tually resolve problems of data collection and 
policy implementation.   
12. The Ninth Development Plan allocated up to B$250 million to the Human Resource 
Development Fund to improve human resource cap acity.  This included a revised and improved 
Education Act, which incorporated curriculum improvements and made nine years of schooling 
compulsory, and an expansion of university tw inning programmes with Australia, Canada, Japan, 
New Zealand, and the United Kingdom.  Brunei's institutional development strategy was geared 
towards the development of a better legal system , the creation of an independent ombudsman, and 
clear regulatory frameworks for the purposes of ensuring predictability, transparency, and 
accountability.  The Government was involving relevant  stakeholders, especially those in the private 
sector, in discussions on policy formulation as a step to encouraging transparency.  The Legislative 
Council had been reconvened in 20 04 to gradually improve government accountability.  Brunei had 
also participated in the World Bank Ease of Doing Business survey as part of  a broader transparency 
exercise.  In areas where national legislation was lacking, for instance in competition policy, efforts 
were being made to see how to transpose policies th at had been adopted in regional fora into Brunei's 
policy formulation and administration system. 
13. As one of the original Members of the WTO, Brunei Darussalam was committed to the 
multilateral trading system.  The rule of law was vi gorously enforced in order to give investors the 
security to invest in the long term.  On the othe r hand, several significant impediments remained and 
support from the international community, in terms of  technical assistance, was welcome, such as an 
intensification of the capacity building activities provided by the WTO Secretariat. 
 WT/TPR/M/196 
Page 6  
 
  III. STATEMENT BY THE DISCUSSANT 
14. The discussant
 (H.E. Mrs. Marie-Claire Swärd Capra) said that Brunei was a firm supporter 
of a rules-based multilateral trading system.  It ha d significantly developed its  regional and bilateral 
economic relations, including through free-trade agreements, which were complementary to the 
multilateral trading regime.  Am ong its regional trade agreements, the Trans-Pacific Strategic 
Economic Partnership (SEP) betwee n Brunei, Chile, New Zealand, and Singapore could become a 
significant basis for further liberalization. 
15. Brunei's standard of living remained among th e highest within its ASEAN partners, but 
long-term economic sustainability was yet to be achie ved.  It was a relatively open economy, while at 
the same time characterized by a notable lack of tr ansparency in the Government's policies, practices, 
and measures, including some restrictions pertaining  to trade and foreign investment.  Private-sector 
involvement in the economy was minimal, and there were significant gaps in areas such as competition policy and IP enforcement that risked  hampering the development of a more dynamic 
business climate and diversified integration into th e international economy.  The essential challenge to 
sustainable economic growth in Brunei was the con tinuing large GDP share of petroleum and natural 
gas, and the depletion of these reserves.  The non- oil and gas manufacturing sector part of GDP had 
shrunk from 3% to 1% during the review peri od, despite the economic policy objective of 
diversification.  
16. While GDP growth rose from 3.9% in 2002 to an estimated 5.1% in 2005, due mainly to high 
energy prices, a more sluggish growth rate of 1. 9% was expected for 20 07.  The economy was  
dependent on the energy sector (in 2006 petroleu m and natural gas resources share of GDP was 69%, 
96% of exports, and 94% of total Government reve nue), and therefore vulnerable to variations in 
output, and to international oil price fluctuati ons.  Saving the windfall revenues from high energy 
prices helped stabilize the economic cycle and provided a comfortable fiscal position.  There nevertheless seemed to be scope to further strengt hen fiscal management.  Public finances depended 
precariously on the oil and gas sector as the main s ource of income for the Government.  In 2006, 
corporate taxes represented 98% of total tax revenues,  nearly all of which originated from oil and gas 
companies.  She suggested improvements in transpar ency and governance should be made in the area 
of asset management and expenditure from funds su ch as the General Reserve Fund, the Consolidated 
Fund, the Development Fund, the Government Trust Fund, and the Brunei Investment Agency (BIA).  
17. The policy objective of diversification faced in creasing challenges:  some privatization had 
been accomplished, for example in transport.  The Government had had difficulties launching a 
dynamic cycle of private-sector development, despite  a large number of incentives.  This could point 
to the need for a more extensiv e structural adjustment process, including following through on the 
privatization of a number of Government agen cies, announced already in 2001, such as 
telecommunications, electrical services, postal services, and information technology.  The 
two-pronged approach for greater industrial diversif ication launched by the BEDB, as outlined by the 
Brunei delegation, had met with some success, and could contribute to reinforcing the international 
image of Brunei.  It was advisable to develop the manufacturing component of Brunei's industrial 
structure, alongside an expansion in the services sec tor, to better sustain long-term economic growth.  
She noted the emphasis on sustainable development in  the government statement, and asked whether 
the Government intended to define any genera l climate or other environmental objectives to 
accompany its decisions on industrial policy, be it in developing manufacturing, or fisheries and 
forestry, where some conservation regulations existed.    
18. The new Brunei Economic Development Boar d Act of 2003 strengthened the BEDB's 
possibilities to promote FDI and develop joint ventur es.  However, a better business climate, in terms 
of transparency and predictability for traders and i nvestors, was a prerequisite for turning Brunei into 
a regional hub.  Effective procedures to combat in fringements of intellectual property rights would  WT/TPR/M/196 
 Page 7 
 
 
  significantly increase confidence in the business envi ronment.  No specialized corporate governance 
code existed in Brunei, outside th e provisions in the Companies Act and related to securities dealings 
under the 2001 Securities Order.  The absence of co mpetition law affected the price of doing business 
in Brunei, and national competition rules needed to be  part of its diversification efforts, and for the 
development of the private sector.  General princi ples of competition were provided under the Trans-
Pacific SEP, but did not apply to Brunei unless it established a competition law or competition 
authority.  Also, she hoped that the Government 's consideration of whether to join the WTO 
Government Procurement Agreement could be advanced by procurement provisions in the 
Trans-Pacific SEP.  Increased competition in the government procurement market could have positive effects on the economy, in terms of value for money of government spending.  
19. Structural adjustment efforts in terms of private-sector employment would also benefit from 
increased competition in the labour market.  In orde r to bring about a more inclusive and competitive 
labour market, the important structural imbalance between public and private employment would have 
to be addressed, in conjunction with targeted effo rts in education, which should be well aligned with 
the demands of a diversified private sector.  Alt hough, tax incentives played a significant part in the 
Government's efforts to attract investment to targeted sectors and promote diversification, she 
questioned whether the number of tax incentiv es might not be reduced, especially as their 
cost-effectiveness in relation to forgone tax revenue  had not been verified.  A more broadly based 
corporate income tax system, with a lower rate than  the current 30%, should be explored.  Investment 
in the private sector, including FDI, should be encour aged by a simpler taxation structure with low tax 
rates and a less complex system of incentives, which would be less distorting and more in line with 
regional levels.  
20. Brunei should be commended for its average MF N tariff of 4.8%, with zero tariffs for 
agricultural products and 5.4% for non-agricultural pr oducts in 2007, and with 98.2% of tariff lines 
bound under the WTO.  But, at an overall bound rate  of 25.8%, the gap with the applied MFN tariff 
was significant.  There was no reason to believe th at the Government intended to make use of its 
scope for movement but the gap introduced an elem ent of unpredictability to the trade regime.  
Another significant element of uncertainty was the real  level of overall tariff protection:  there were 
131 MFN tariff lines to which Brunei applied specifi c rates and for which information as to their 
ad valorem  equivalents was not available.   
21. According to Brunei's Department of Econom ic Planning and Development, the services 
sector was the bright spot in the economy during the first two quarters of 2007, expanding by 15.3% 
year-on-year in the second quarter.  Brunei had made  an initial GATS offer in 2005, similar to its UR 
commitments, but the Government had indicated that they intend to put forward a revised offer in the 
DDA.  This was judicious in view of Brunei's wish to become a service hub, not least for tourism.  The Government held a dominant position in services and maintained entry restrictions in several 
areas.  Further deregulation and liberalization of so me key sectors would facilitate structural reform.  
For example, telecommunications in Brunei were of a high standard and ranked well in Asia in terms 
of penetration and infrastructure (with a household penetration rate of 100% and mobile penetration 
rate of 74% at end 2006). 
22. The tourism sector held great potential in Brune i, and economic expansion in the sector could  
spread to the rest of the economy.  Factors rela ted to market conditions had discouraged tourism, 
including high cost accommodation, inadequate trans port, etc;  and the 9/11 attacks and SARS had not 
helped.  Construction of hotels and modern f acilities could raise the competitiveness of Brunei as a 
tourist destination and one way to increase the number of international tourist arrivals appeared to be 
the niche development of eco-tourism, an interesti ng way for Brunei to make use of its comparative 
advantage.  WT/TPR/M/196 
Page 8  
 
  23. It was surprising that no institutional mechanism was in place to evaluate the effectiveness of 
trade measures and signal to the Government when it n eeded to reform trade policies.  In view of the 
importance of achieving more diversification of trad e in a limited time span, such an institutional 
mechanism would have definite added value to ensu re quick and flexible policy responses.  Policy 
formulation would also benefit from a greater degree of transparency in the economy.  As a 
developing economy, Brunei faced a number of human resource and capacity challenges and could 
benefit from trade-related technical assistance to achieve greater integration into the multilateral 
trading system.  She noted the Secretariat had suggest ed that training and expertise could be beneficial 
in the areas of standards, SPS measures, and IPR issues, especially in improving administrative capacities.    WT/TPR/M/196 
 Page 9 
 
 
  IV. STATEMENTS BY MEMBERS   
24. The representative of Canada  said that two-way merchandise trade with Brunei had reached 
US$17.2 million in 2006.  Canadi an exports to Brunei expanded from US$2.6 million in 2005, to 
US$15.5 million in 2006, mainly due to a jump in exports of machinery in the oil and gas industry.  
Canadian imports from Brunei, valued at US$1.7 million in 2006, were largely comprised of knit 
apparel, aluminium products and w oven apparel.  Canada would like to see more joint ventures and 
partnerships on innovation and energy-related technologies betw een Canadian and Bruneian 
companies, as well as the transfer of Canadi an capabilities, skills, and technology to facilitate 
industrial development.  Brunei' s economy had improved, growing by 5.1% in 2006, up from 2.7% in 
2001, with an expected growth rate of 2-4% in th e next five years.  Canada commended Brunei for its 
ongoing efforts towards greater liberalization and diversification of its economy, as well as its 
achievements in encouraging foreign investment with the establishment of the Brunei Economic 
Development Board and the reassessment of its investment laws. 
25. The report by the Secretariat indicated "a lack of  transparency in government policies and the 
manner in which they are administered".  Canada urged Brunei to develop a system that would, for 
example, clarify the limits of foreign equity holdings and the sectors in which investment was 
restricted, thus providing a framework for check s and balances, and government accountability in the 
management of its economy.  In addition, Canada urged Brunei to improve the collection of data in 
several key areas and activities, including the financia l and statistical databases on investment income, 
balance of payments, monetary statistics, the la bour market, the national account, and information on 
progress made under the national development plan.  Improving the reliability, coverage, timeliness, 
and frequency of data delivery would help strengthen Brunei's overall economic efficiency. 
26. With respect to intellectual property rights,  although Brunei had st rengthened its legal 
framework for the protection of intellectual prope rty rights and was considering accession to the 
WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, the Secretariat report 
underscored worrying trends in enforcement overa ll.  Canada encouraged Brunei to institute 
regulations and effective enforcement to di scourage commercial activities that infringed on 
intellectual property.  Brunei should extend its effort s in protecting intellectual property rights beyond 
its membership in the ASEAN Working Group on Intellectual Property Cooperation (AWGIPC), and in the EC-ASEAN Intellectual Pr operty Rights Cooperation Project (ECAP II), to the broader 
international community including China and Chinese Ta ipei.  Canada encouraged Brunei to continue 
its review of domestic legislation on governme nt procurement and to make any necessary 
amendments to advance the procurement regime.  It  was important that government procurement be 
conducted in accordance with set guidelines availabl e and accessible to all potential suppliers in a 
timely manner.  Ultimately, addressing issues like tr ansparency in the procurement process increased 
Brunei's attractiveness as a destination for foreign in vestment, enhanced its economic diversification 
initiatives, and created sustainable employment in the non-oil and gas private sector.  Canada sought 
assurance from Brunei that its halal certification pr ogramme would not lead to complications and 
cause market access problems for the agri-food sector.   
27. The representative of the European Communities
 said that Brunei Darussalam and the EC 
cooperated closely within the framework of the EC-ASEAN agreement of 1980 and the EC 
constituted the major source of foreign direct inv estment in Brunei Darussalam.  The EC encouraged 
the Bruneian authorities to diversify the economy.  Brunei was focussing efforts to increase the contribution of manufacturing and services to ec onomic growth, which promised to lessen its 
dependency on energy prices in the future.  The b ilateral relationship was underpinned by the EC's 
position as Brunei Darussalam's 7
th largest overall trading partner, with overall trade value at nearly 
€400 million.  The EC accounted for 5.7% of Brun ei Darussalam's total external trade, providing WT/TPR/M/196 
Page 10  
 
  10.8% of its imports.  Furthermore, the EC accounted for roughly 70% of foreign direct investment in 
Brunei Darussalam in 2006.  
28. ASEAN and the EC decided in May 2007 to launch negotiations for a comprehensive 
free-trade agreement.  The ambition to realize th e full potential of economic relations was welcomed 
by the business communities both in Europe and in South-East Asia, and the EC encouraged Brunei 
Darussalam to continue to participate actively in these negotiations, which were scheduled to be 
concluded within the next two years.  
29. The EC was concerned about the lack of tran sparency of government policies and the manner 
in which they were administered.  The EC encour aged Brunei Darussalam to provide data in key areas 
and activities such as investment income, balanc e of payments, and government procurement.  
Information was also lacking on the limits of foreign equity holdings and on sectors in which 
investment was restricted.  Publishing such da ta and information woul d constitute a source of 
predictability and reliability and t hus would support the aims of Brunei Darussalam to diversify the 
economy and to boost foreign direct investment.  
30. In order to facilitate foreign direct investme nt, the EC invited Brunei Darussalam to further 
liberalize trade by removing a number of import prohibitions, import restrictions, and licensing 
requirements on various products for health, secur ity and moral reasons.  Such practices by Brunei 
Darussalam had remained generally unchanged durin g the review period and were not in accordance 
with international rules and best available scientif ic evidence.  In addition, modifying the ban on 
foreigners owning land would help to increase FDI.   Steps to reduce the strong government presence 
in the economy would enhance the private sector's performance.   
31. Private entrepreneurship could also be suppor ted by enhancing the predictability of the 
regulatory regime.  For example, Brunei had no fra mework legislation on competition although it was 
exploring the possibility of introducing such legi slation in line with APEC principles.  Anti-
competitive practices affected the prices of everyd ay commodities;  thus a competition policy, if 
implemented effectively, would have a dir ect beneficial effect for consumers.   
32. The representative of Australia
 said that Australian exports to  Brunei Darussalam were led by 
agri-food items, and services exports, particularly e ducation, continued to grow.  Brunei Darussalam 
had a comparatively liberal trading regime, with relatively low applied MFN tariffs, zero tariffs on 
most agricultural products and no import quotas.  He encouraged Brunei Darussalam to continue its 
liberalization efforts and use the Doha Round to reduce the gap between applied and bound tariffs on 
industrial products.  More work needed to be d one to liberalize the services sector, and he urged 
Brunei to make a comprehensive offer on services in  the Round, particularly on financial services, 
telecommunications, education, and professional services. 
33. Australia welcomed Brunei Darussalam's effort s to diversify its economy beyond the oil and 
gas sector.  The BEDB had attracted significant in terest by major investors, including Australian 
companies.  Australia also supported Brunei Da russalam's efforts to implement its economic 
diversification agenda, including its efforts to beco me a regional services hub, as well as a financial 
and business centre.  Australia valued its close working relationship with Brunei Darussalam in a 
number of regional fora and commende d Brunei for its constructive role  as ASEAN coordinator in the 
current ASEAN Australia-New Zealand Free Trade Agreement negotiations.  Australia and Brunei 
Darussalam shared a strong commitment to an open  multilateral trading system and he encouraged 
Brunei to work with Australia and other WTO Members to bring the Doha Round to successful 
conclusion.   WT/TPR/M/196 
 Page 11 
 
 
  34. The representative of Colombia  said that although Brunei's per capita income was among the 
highest in Asia, growth indicators were positive and inflation low, its quasi-total dependence on 
production of oil and gas left it highly vulnerable to  outside conditions and the expected depletion of 
reserves.  Diversification of the economy, therefore,  was a priority recognized by the Government of 
Brunei but not yet sufficiently implemented.  The excessive presence of the public sector, which 
dominated the economy, the slowness of bureaucracy, th e lack of transparency, the salary advantages 
offered by the Government and the very small si ze of the domestic market were reasons why the 
private non-oil sector, made up mainly of small and medium-sized companies, was still extremely limited.  Therefore, it was important to redefine the role of the public sector, modernize and open public procurement further, promote competition, an d give greater scope to private initiatives.  He 
noted the lack of transparency in trade and invest ment policies, the lack of an independent body to 
assess government policies, as well as the lack of  information on national accounts and finance.  
Colombia wished to know what remedies were be ing promoted by the authorities to solve those 
problems.   
35. The representative of Japan
 said that Japan welcomed Brunei's efforts, under the 8th National 
Development Plan (2001-2005), to diversify its productive base away from the heavy dependence on 
oil and gas, and to enhance efficiency by expanding  the role of the private sector.  Japan considered 
that Brunei's manufacturing industry and export trad e were still limited and that the public sector, 
including state enterprises, occupied an overly large share of its economy.  In addition to its 
intensified participation in regi onal agreements, Brunei had increased activity on the bilateral front.  
Japan and Brunei, as close trade partners, ha d signed the Japan-Brune i Economic Partnership 
Agreement in June 2006, to promote the libera lization and facilitation of bilateral trade and 
investment. 
36. Regarding the transparency of trade policy,  Japan questioned a new law (effective on 
1 January 2008), which eliminated the customs tari ffs on automotive products, tobacco, and alcoholic 
beverages, while imposing excise taxes (at the same rate as the customs tariffs) on these goods.  There 
was not much explanation of the rationale and background and Japan asked Brunei to elaborate on 
this measure.  On the protection of intellectual property rights, the Japanese Government had heard 
from companies operating in Brunei that they were being adversely affected by piracy in respect of 
products such as auto parts.  With a view to ensuring product safety and a better business 
environment, Japan enquired about the specific meas ures being undertaken by Brunei to combat trade 
in pirated goods. 
37. The representative of Chinese Taipei  said that Brunei's general economic performance since 
its last Review had been modest.  Its main sources  of revenue continued to be oil and natural gas, 
which was insufficient to create enough jobs for its  growing labour force.  One problem was the lack 
of transparency in government policies and the absen ce of a competition law.  While certain steps had 
been taken to relax restrictions on the ban on fore igners owning land in non-oil and gas industries, and 
to grant national treatment to foreign investors, it remained to be seen whether such steps would 
succeed in attracting the higher levels of privat e investment needed to diversify the economy, 
especially in areas like financial services, tourism, and transport.  Brunei's internal barriers to trade 
resulted mainly from the apparent absence of a competition policy and restrictions on foreign 
participation under the investment regime.  Al so, the Brunei Government maintained import 
prohibitions on a number of products, including v accines from Chinese Taipei.  He requested further 
details of the regulations on the import of vaccines and the reasons for the prohibition. 
38. The representative of India  said that Brunei was targeting an annual growth rate of 6%, 
backed by a B$2 billion annual budget, according to the National Development Plan (2007-2012).  
The Government planned to spend B$9.5 billion up to 2012 for a package of programmes to grow the 
economy.  The budget would be allocated to support projects aimed at improving its human resources, WT/TPR/M/196 
Page 12  
 
  industrial and commercial activities, and its social de velopment agenda.  It would be useful for WTO 
Members to learn the details and proposed implem entation of the NDP.  Brunei's current level of 
competitiveness lagged behind other countries.  Th e World Bank's Ease of Doing Business Index 
ranked Brunei 78
th out of 178 countries, behind even some of its neighbours.   
39. India-Brunei trade was around US$300 million, the balance in favour of Brunei.  The bulk of 
India's imports from Brunei consiste d of crude oil and India urged Br unei to consider ways and means 
to cooperate with India in  balancing the trade for a sustained hea lthy growth of trade.  India was ready 
to share its experience and expertise in developm ent of small and medium enterprises, including 
industrial estates in Brunei, HRD, including entrep reneurial training, software and IT, hotel and 
tourism, oil and gas downstream, pharmaceuti cals, construction, agriculture, etc.  Around 
7,000 Indians were working and living in Brunei a nd almost 50% of doctors in the country were 
Indians.   
40. The representative of the United States  said that Brunei's economic performance had been 
impressive:  real GDP was picking up, inflation and unemployment were low, and Brunei continued to accumulate long-term foreign assets.  The trade relationship between Brunei and the United States continued to grow.  Two-way trade was worth about ha lf a billion U.S. dollars.  In addition to energy, 
Brunei exported textiles to the United States and w as expanding its exports in new sectors such as 
seafood.  U.S. exports to Brunei nearly triple d between 2006 and 2007.  The United States 
commended Brunei, a small country heavily reliant on oil and gas revenue, for the priority it had 
placed on diversification.  Brunei's progress toward  this goal had been relatively slow and the 
United States was interested in any further updat es and whether it was considering policy changes to 
accelerate progress towards this objective. 
41. There was a lack of transparen cy in some government operations, including the availability of 
information about foreign investment policies, th e procurement and state-trading activities of state 
enterprises, and the coverage and timeliness of fina ncial statistics.  He urged Brunei to enhance 
transparency and reporting in these areas and to upda te its WTO notifications on state trading, import 
licensing, and subsidies.  These steps could prom ote greater awareness of Brunei's policies and 
enhance its attractiveness as a trade and investment partner.  The United States appreciated Brunei's 
recent notification of its hala1 requirements.  The authorities were working to develop a Brunei halal 
brand with the objective of promoting Brunei's e xports in world markets.  The United States 
encouraged Brunei to ensure that import require ments were not overly burdensome or more trade 
restrictive than necessary.  
42. The United States acknowledged Brunei's efforts in the area of intellectual property, but was 
concerned about the high levels of optical disk pi racy and other weaknesses in Brunei's IPR regime;  
it would welcome an update on any planned legislativ e, judicial or enforcement steps.  Brunei was 
exploring membership in the WTO Agreement on G overnment Procurement.  Given the important 
role played by government entities in Brunei's econo my, participation in that  agreement could provide 
a significant boost to Brunei's economic growth and diversification efforts. 
43. The representative of Brazil
 noted the improvement in Brunei's financial regulatory 
framework and the investment in transport and te lecommunication infrastructure, reflecting Brunei's 
concern to diversify its economy and reduce its ove r-dependency on oil and gas.  Efforts had been 
made to establish Brunei as an off-shore banking and tr ading centre for the region.  New legislation 
had brought the regulatory framework more in line w ith international standards, and measures against 
money laundering activities had also been in troduced.  The Government's investments in 
telecommunication infrastructure were noteworthy:  with a fixed-line telephone  penetration rate of 
100% and a mobile rate of 74%, Brunei had increased its capacity to provide high level 
telecommunication services and had expanded interc onnectivity to rural and remote areas of its  WT/TPR/M/196 
 Page 13 
 
 
  territory.  Nonetheless, the overall results under succe ssive National Development Plans indicated that 
the Government had still to overcome its depende ncy on petroleum.  Brune i had bound 93% of its 
tariff lines but there was a considerable differe nce between the overall bound and applied tariff 
averages.  In addition, despite the low applied av erage tariff, a significant number of tariff lines 
entailed peaks and pronounced escalation.   
44. The representative of Malaysia, speaking on behalf of ASEAN , noted that the economy of 
Brunei Darussalam had grown by 5.1% in 2006 comp ared with 2.7% in 2001.  Brunei had by and 
large maintained a relatively open trading system, with low applied MFN tariffs, of which 99% were 
ad valorem .  Foreign investors could hold up to 100% equity in all sectors except those involving 
local natural resources and those relating to nationa l food security.  Although oil and gas remained the 
main source of revenue for the Government, Brunei had implemented several policies to diversify its 
economy away from over-dependence on oil and gas.  There had been considerable strengthening of 
financial sector supervision and regulation, an d downstream oil and gas manufacture, trade and 
tourism, agriculture and fisheries, and exports of  halal food had also been promoted.  Brunei had 
strengthened intellectual property rights protection,  enforcement, administration, and legislation. 
45. Under AFTA, Brunei Darussalam had reduced tari ffs on 93% of tariff lines to 5% or 0% for 
products of ASEAN origin.  The ASEAN Economic  Community (AEC) had been established to 
enhance regional economic integra tion, and it was hoped that ASEAN would be a single market and 
an integrated base for production by 2015.  Seve ral other initiatives towards integration included the 
ASEAN Framework Agreement on Services and the ASEAN Investment Area Agreement, which would bring a higher level of integr ation in services and investments. 
46. The representative of Pakistan
 noted that liberalization in finance and telecom services had 
led to economic growth in Brunei.  Pakistan valued  the legislative reforms in  Islamic banking and the 
promotion of halal brand products.  Pakistan appreciated Brunei's intensive efforts in social and 
infrastructure development, education, health, human  resources development, and social welfare.  
Despite being an oil-based economy, Brunei had ma de significant efforts to expand its share of 
non-oil revenues in its economy.  Pakistan was taking all steps possible to enhance its bilateral trade 
with Brunei in goods and services.   
47. The representative of New Zealand  said in August 2005 Brunei had signed the Trans-Pacific 
Strategic Economic Partnership (TPSEP) with Chile, New Zealand, and Singapore.  It was the first 
multiparty trade agreement involving countries fro m Asia, the Pacific, and Latin America.  
New Zealand, together with Australia, was ne gotiating a free-trade agreement with the ASEAN 
countries, which would include  Brunei within its scope. 
48. The representative of Chile  also noted Brunei's membership of the Transpacific SEP (known 
as P-4), which included a labour cooperati on memorandum of understanding as well as an 
environmental cooperation agreement.  Brunei's trad e policy was going in the right direction in terms 
of  greater trade opening, efforts to diversify the economy, a strategy to attract direct foreign 
investment, and the intention of Brunei to study le gislation on competition policy.  He referred to the 
Secretariat report, which said "the effective appreciation of the Brunei dollar may impede the Government efforts to diversify the economy and deve lop export industries" (Chapter I, para. 23) and 
he asked how the Brunei authorities intended to counter act the effect of such an appreciation.  He 
noted that in several sectors – for example oil a nd gas, telecommunications, transport, energy – the 
presence of the State in the economy was still strong, often in the form of a monopoly, and asked 
whether such state monopolies were natural monopoli es, given the size of the market, and whether 
there was any price regulation in these markets.  Re garding phytosanitary rules in Brunei, he drew 
attention to the stipulation that labels for food products had to include the address of the manufacturer, 
packer, wholesaler, importer, and distributor and ask ed what advantages were gained from including 
such information at all levels of the logis tical chain in the labelling of products.   WT/TPR/M/196 
Page 14  
 
  49. The representative of Nigeria
 noted that Brunei Darussalam was an oil and gas dependent 
economy, which made it vulnerable to  shocks due to frequent price fluctuations in the world energy 
market.  In spite of this, the country had been able  to subdue inflation to 1% in the period under 
review.  Recent changes and revisions in trade an d trade-related legislation had made Brunei more 
open and flexible.  The BEDB was expected to  be a catalyst for economic diversification, 
private-sector participation, and increased inflows of FDI.  If properly implemented, the 
diversification policy would encourage private-sector  participation, and reduce the large presence of 
the public sector in the economy.  She suggested that Brunei needed to re-examine its tariff structure 
with a view to narrowing the gap between bound and applied rates.    WT/TPR/M/196 
 Page 15 
 
 
  V. REPLIES BY THE REPRESENTATIVE  OF BRUNEI DARUSSALAM AND 
ADDITIONAL COMMENTS 
50. The representative of Brunei Darussalam  addressed the major concerns raised by Members 
during the opening session of the Review.  Regarding the perceived lack of transparency at how government policies were administered, as well as the quality of data collection, the fundamental 
impediments were human resources constraints and limited institutional capacity.  To address them, 
the Long Term Development Plan called for an HRD strategy and an institutional development 
strategy.  The HRD strategy would form the ba sis for alleviating human resources constraints 
hampering Brunei's data collection capabilities a nd its ability to successfully carry out various 
government policies, including IPR protection, economic diversification efforts, as well as 
maintaining certain WTO obligations, such as notifi cations.  The institutional development strategy 
would provide a predictable, accountable, and tran sparent economic regime by developing a more 
comprehensive legislative framework a nd creating an independent ombudsman.  
51. The need for Brunei to diversify away from its staple of oil and gas exports was pressing.  
Brunei had embarked on promoting FDI inflows and had targeted four clusters in its diversification 
efforts:  hospitality and tourism, business service s (in particular halal food processing), financial 
services, and logistics.  He welcomed the inter est expressed by some Members to initiate joint 
ventures and partnerships in some of these fields, which would benefit Brunei in  terms of transferring 
skills and technology, and upgrading its  labour productivity.  On foreign investment, he said that full 
foreign equity participation was possible in par ticular in high-technology manufacturing and export-
oriented industries although 30% local participati on was required in industries requiring the use of 
local natural resources and those relating to national food security. 
52. On trade policies and measures, the Long Term  Development Plan had incorporated the 
streamlining of customs procedures;  for instance,  an e-customs programme under the auspices of the 
National Single Window initiative was under way to  complement the efforts of other ASEAN 
members to facilitate trade.  Anot her example was the setting up an e-procurement system to expedite 
the procurement process;  the Trans-Pacific Stra tegic Economic Partnership agreement included a 
chapter on government procurement, which coul d enhance accountability in Brunei's government 
procurement activities.  On tariffs, Brunei had main tained a low average applied MFN tariff of 4.8% 
and, with effect from 1 January 2008, had unilate rally eliminated tariff duties on 716 lines, bringing 
its current average applied MFN tariff down to 3. 6%.  Brunei Darussalam remained committed to 
maintaining its open trade policy and saw the Doha  Round as a further step towards increasing the 
scope and depth of its tariff bi ndings.  Brunei's excise duties were  applied on a non-discriminatory 
and national treatment basis.  On standards, labe lling, and SPS matters, Brunei Darussalam adhered to 
WTO principles when applying measures to import re strictions, licensing, and prohibitions;  the halal 
certification notification to the WTO TBT Agreement was one such instance.   
53. On the issue of framework legislation on compe tition, he said that considering the small size 
of the economy, coupled with limited institutiona l capacity, a competition law was still a novelty.  
Nevertheless, Brunei acknowledged the importance of having a competition law and was studying 
how to transpose measures in APEC Competition Po licy guidelines into the Brunei system.  Brunei 
was studying the benefits of a competition policy as it related to the Competition Policy Chapter under the Trans-Pacific SEP.  Brunei used elements  of competition policy on a sectoral level in the 
telecommunications and financial services sect ors and in the oil and gas industry.   
54. On compliance with IPR rules, Brunei Da russalam had taken the necessary measures to 
enforce its IP laws, which had resulted in the pr osecution of several infringements.  The police had 
ex-officio  powers to take action, although cooperati on from rights-holders was required in identifying 
infringements.  In order to improve the quality of enforcement measures, as of  2006 all complaints or 
cases on IP were referred to the Attorney Genera l's Chambers, which coordinated consultations WT/TPR/M/196 
Page 16  
 
  between enforcement agencies and rights-holders and complainants to ensure compliance with the law 
and usability of the evidence.  In order to meet its obligations under the TRIPS Agreement, Brunei 
Darussalam had enacted five laws relating to IPR and replaced the Trade Mark Act, Cap. 98 with a 
new Trade Mark Act.  It was also finalizing its  Draft Patent Regulation.  In addition, Brunei 
Darussalam had enacted other legislation, such as the Medicines Order 2007, to complement its IP 
laws.  The e-Registry project was completed at the end of 2007 and the trade mark e-filing system was 
due to be introduced.  Brunei Darussalam also ma intained public awareness on IPR through seminars 
and made its IP laws publicly available.  Brunei was considering the feasibility of joining the Paris 
Convention and the WIPO internet treaties.  Technical assistance would be welcome from WIPO and WTO to help strengthen the IPR enforcement regime.   
55. Brunei had commenced the gradual liberalization of the telecoms sector.  During the review 
period, it had set up an independent regulatory body (A iTi) to supervise the industry.  Corporatization 
efforts had started with a view to improving corp orate governance.  Brunei had introduced an element 
of competition in mobile telephony services.  Limits  on foreign participation were set at 50%, to 
encourage a transfer of skills and technology into th e local sector development.  In financial services, 
Brunei had improved the banking sector's regulator y and supervisory frame work, including better 
rules against money laundering.  This has aided th e development of the Brune i International Financial 
Centre (BIFC) and Brunei's ambition to become an Islamic financial centre.  
56. The discussant
 said the 2001 goals for economic restructuring were comprehensive and 
ambitious.  But essential structural adjustment challe nges remained in view of  the deadline set by the 
expected depletion of oil and natural gas resources.   The economy remained hostage to the dominance 
of the energy sector, and private-sector development had proven difficult.  In particular, enhanced 
transparency and predictable open markets, incl uding in government procurement, and improved 
business and investment climates, were yet to be achie ved.  Therefore, any lack of urgency in carrying 
out comprehensive diversification and privatizatio n might be the biggest risk to the medium and 
long-term prospects of sustainable economic grow th.  Brunei should increase the pace of reform under 
its 9th National Development Plan.  Remaining external and internal barriers to trade needed to be 
addressed, and Brunei should be encouraged to present a revised services offer in the DDA that 
contributed to developing its comparative advantages, especially in the five service sectors covered in its 2005 initial offer. 
57. The representative of the United States
 asked about the extent to which ex officio  authority 
was available in Brunei's laws and procedures for IP enforcement, and whether consideration was 
being given to expanding or st rengthening this authority.  Sh e urged Brunei to update its WTO 
notifications on state trading, import licensing, and subsidies.   
58. The representative of the EC  said that her delegation ha d some follow-up questions and 
comments (which would be submitted in writing) rega rding:  information about the transparency of 
government institutions;  the sectors covered by competition policy;  the restricted sectors in the 
investment regime;  how land ownership was dea lt with;  SPS measures and mutual recognition of 
certificates;  the application criteria for excise tax;   and the conditions for obtaining an operating 
licence in the telecom sector.    
  WT/TPR/M/196 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
59. The second Trade Policy Review of Brunei Daru ssalam has been thorough and informative 
and has allowed Members to come to a better un derstanding of Brunei's tr ade and trade-related 
policies and of the challenges it faces as it seeks to diversify its economy.  I thank Mr. Dato Lim Jock 
Hoi and his delegation, as well as the discussant, Am bassador Marie-Claire Swärd Capra of Sweden, 
and Members of the TPRB for contributing to our fruitful exchange of views.  The reports by Brunei 
and the Secretariat, as well as the detailed responses of the delegation of Brunei Darussalam to the 
many questions posed, have provided a valuable r esource for reflection and for transparency within 
the WTO.   
60. Brunei is a small, relatively open economy whose prosperity is based on its abundant 
petroleum and natural gas resources.  However, th e prospect of an eventual depletion of these 
resources has prompted the Government to continue  pursuing an active industrial policy to encourage 
economic diversification particular ly to develop downstream oil and gas activities, financial and 
business services, hospitality and tourism, and logi stics.  Members expressed support for Brunei's 
efforts to implement its economic diversification agenda.  Noting that progress has been relatively 
slow, Members asked whether the authorities are c onsidering significant policy changes to accelerate 
diversification.  Questions were also raised about other policies re lating to employment, pricing, and 
fiscal management. 
61. Members welcomed Brunei's commitment to an open, rules-based and non-discriminatory 
trading system with relatively low applied MFN ta riffs and no import quotas.  They also welcomed 
Brunei's assurance that regional arrangements woul d be complementary to the multilateral trading 
system.  Regarding the DDA, Members encouraged Br unei to continue its liberalization efforts to 
reduce the gap between applied and bound tariffs on  industrial products.  Some Members noted that 
more work needs to be done on liberalizing the services sector and urged Brunei to make a 
comprehensive offer – including on financial and te lecom services – in the Doha Round.  In the 
agri-food sector, some Members sought assurances from Brunei that its Halal certification programme 
and import requirements will not beco me overly burdensome or more trade-restrictive than necessary.   
62. Several aspects of the trade and investment regime  are characterized by a lack of transparency 
including the availability of information about fo reign investment policies, the procurement and 
state-trading activities of state enterprises, the ti meliness of WTO notifications, and the coverage of 
financial and economic statistics.  In response, the Brunei delegation outlined steps being taken to 
improve the transparency of government policies an d regulations, especially those pertaining to the 
strengthening of institutional capacity  and meeting the challenge of human resource restraints.  It is 
clear that such steps could go a long way to prom oting a greater awareness of Brunei's policies and 
enhancing its attractiveness as a trade and investme nt partner.  Members also pointed out that 
addressing transparency in the government procur ement process – including making procurement 
guidelines available and accessible to all potentia l suppliers in timely fashion – could improve 
Brunei's image as a destination for foreign invest ment.  Given the importance of government entities 
in Brunei's economy, Members welcomed the news th at Brunei is exploring membership in the WTO 
Agreement on Government Procurement. 
63. With respect to intellectual property rights, Brunei has strengthened its legal framework for 
IPR protection and is considering accession to th e WIPO Treaties on Copyright and Performances and 
Phonograms.  However, Members expressed concern about IPR enforcement, which needs to be more 
effective to discourage commercial activities that in fringe intellectual property such as optical disk 
piracy.  Some Members noted that Brunei has to  date no legislation on  competition although it 
appears that it is exploring the possibility of introduc ing such legislation in line with APEC principles.  
Brunei also noted that competition policies are u sed on a sectoral basis in telecommunications, 
financial services, and the oil and gas industry. WT/TPR/M/196 
Page 18  
 
  64. In conclusion, I feel that we should c ongratulate Brunei Darussalam on maintaining a 
relatively open trade and investment regime.  I th ink that we are all aware of certain difficulties 
Brunei faces in policy transparency and impl ementation, but the delegation made Brunei's 
commitment to continued trade and economic reform and to the WTO very clear.  Generally, I think 
we appreciate that technical assistance in some areas might ease Brunei's implementation problems.  I 
think we also agree that further liberalizati on of the trade regime, including additional GATS 
commitments, could assist Brunei both in its effort s to diversify its economy and in its further 
integration into the multilateral system, to the bene fit of the WTO Membership in general.  We look 
forward to receiving any outstanding responses as soon as possible.  I would once again like to thank 
the Brunei Darussalam delegation for its efforts, the discussant for her insi ghtful comments, and 
Members for contributing to what has been an enlightening two days of discussions. 
 
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