WORLD TRADE  
ORGANIZATION  WT/REG244/M/1 
28 September 2009 
 (09-4533) 
Committee on Regional Trade Agreements 
Fifty-fourth Session  
 
 
 
CONSIDERATION OF THE ECONOMIC PARTNERSHIP AGREEMENT BETWEEN  
BRUNEI DARUSSALAM AND JAPAN, GOODS AND SERVICES 
 
Note on the Meeting of 15 September 2009  
 
Chairman:  Mr D. Brauns (Germany) 
  
1. The meeting was convened in document  WTO/AIR/3410, dated 7 August 2009. 
2. Under Agenda Item B.V of its 54
th Session, the Committee on Regional Trade Agreements 
(hereinafter CRTA or the Committee) took up cons ideration of the Economic  Partnership Agreement 
(EPA) between Brunei Darussalam and Japan (herei nafter 'the Agreement'), goods and services.  
3. The Chairman  noted that the Agreement had entered into force on 31 July 2008 and had been 
notified by the Parties to the WTO on the same date under Article XXIV:7(a) of the GATT 1994 and 
the Understanding on the Interpretation of Article XXIV of GATT 1994 as an Agreement establishing 
a free trade agreement (document WT/REG244/N/ 1) and under GATS Article V:7(a) as an 
Agreement providing for the liberalization of trade in services within the meaning of GATS Article V 
(document S/C/N/466).  The text of the Agreement w as available, together with its Annexes, on the 
Parties' official websites.  The Factual Presentation on the goods and services aspects (document WT/REG244/1, dated 6 July 2009) had been prepared  by the Secretariat on its own responsibility in 
full consultation with the Parties, in accordance w ith paragraph 7(b) of the Transparency Mechanism 
for Regional Trade Agreements (document WT/L/671).  In addition, written questions and replies on 
the Agreement had been recently distributed in  document WT/REG244/2, dated 4 September 2009. 
He proposed to organize the consideration of the Ag reement by asking first the Parties and then other 
Members to give any general comments.  The Co mmittee would then turn to the specifics of the 
Agreement using the Factual Presentation to guide th e debate.  He proposed to go through the Factual 
Presentation by section, and then through the questions and replies document.  
4. The representative of Japan
 thanked the Committee for th e opportunity to present the 
Agreement for consideration and the WTO Secretar iat for the Factual Presentation.  The Agreement 
encompassed a wide range of areas beyond trade in goods and services, for example energy, improvement of business environment, and coopera tion.  The Agreement was the seventh Economic 
Partnership Agreement (EPA) concluded by Jap an, following those with Singapore, Mexico, 
Malaysia, Chile, Thailand a nd Indonesia.  Its key objectives were the liberalization and facilitation of 
trade and investment, and cooperation for capacity -building.  Through these means the Agreement 
was expected to strengthen economic relations betwee n the Parties.  Brunei had been one of Japan’s 
major trading partners and a host country to its investment, as well as a supplier of energy.  The 
Parties had decided to negotiate the Agreement to  further strengthen their economic ties.  It was 
expected that the conclusion of the Agreement with Brunei, which was one of the core countries of 
ASEAN, would have had a positive and demonstrativ e impact on other economies, particularly those 
in East Asia, and have helped further enhance econom ic integration within the region as a whole.  In 
May 2006, at the Japan-Brunei foreign ministers’ me eting held in Doha, the ministers of the Parties WT/REG244/M/1 
Page 2  
 
  decided to start the negotiations.  The first round of ne gotiations had been held in June 2006 in Tokyo;   
in December of the same year, the Parties' lead ers had confirmed completion of the negotiations on 
major elements of the Agreement, to be followe d by the finalization of the legal texts.  The 
Agreement had been signed on 18 June 2007 in Tokyo,  and had entered into force on 31 July 2008.  It 
was a comprehensive economic partne rship agreement and attained a high level of liberalization of 
tariffs;  within ten years, it would eliminate up to  99% of tariffs in terms of 2005 bilateral trade 
volume.  The liberalization of trade in goods under the Agreement covered all major sectors, therefore 
meeting the requirements of GATT Article XXIV.  For trade in services, the Agreement provided for national treatment for a broad range of sectors and sub-sectors, and therefore was compatible with GATS Article V.  The economic effects of the Agre ement were difficult to assess, firstly because the 
Agreement was still new, and secondly because of the recent economic crisis.  One of the major 
characteristics of the Agreement was the chapter on energy, under which the Parties had agreed to 
promote partnership in this area including assurance of transparency for restrictive measures as well 
as the establishment of a mechanism for bilatera l policy dialogue.  The Joint Committee and seven 
sub-committees had been established to ensure effective implementation and operation of the 
Agreement, and after the entry into force of th e Agreement a meeting of the Sub-Committee on Trade 
in Services had been held in April 2009.  Under the chapter on cooperation, the Agreement provided 
for cooperation in ten different fields.  Japan belie ved that the Agreement had laid a solid foundation 
for further growth in economic ac tivities in and across the Parties. 
5. The representative of Brunei Darussalam
 thanked the Chairman for the opportunity to present 
the Agreement, the Japanese delegation for its interv ention, the Secretariat for having prepared the 
Factual Presentation, and Members for their questions .  The Agreement had been signed by the Parties 
on 18 June 2007 in Tokyo and had been implemente d from 31 July 2008.  As Japan continued to be 
Brunei's top trading partner, it was natural for Brunei to have entered into an agreement with Japan.  
The Agreement was comprehensive, consisting of 11 chapters covering trade in goods, rules of origin, 
trade in services, investment, energy, cooperation, improvement of business environment, customs 
procedures, general provisions, fina l provisions, and dispute settlement , in which the Parties had taken 
great care to ensure the WTO consistency of the Agreement's provisions.  The Agreement was also 
intended to further enhance cross-border trade in goods and services and investment between the 
Parties, for which they had committed to substantial levels of liberalization.  Other benefits of the 
Agreement included: enhancing the investment clim ate and encouraging foreign direct investment 
(FDI) through greater predictability and transparen cy;  improving market access for Brunei goods and 
suppliers of services;  tapping Japan's expertise and assistance in enhancing Brunei's capacity and 
capabilities in areas such as human resources developmen t, the environment, education and industry;  
and continuing to enhance people to people contacts.   The Agreement, which was the first bilateral 
agreement concluded by Brunei was a landmark which was designed to enable the Parties to make the most of their economic complementarities and to fu rther promote the development of their respective 
economies, as well as to enhance econom ic integration within the region. 
6. The representative of the United States
 thanked the Parties and the Secretariat for the 
information provided on the Agreement.  Accordi ng to paragraphs 24 and 25 and Tables A1 and A2 
of the Factual Presentation, Japan would eliminate duties on 87.4% of all tariff lines, covering 100% 
of imports from Brunei under the Agreement.   Although Japan would eliminate 94% of non-
agricultural tariffs, only 59.4% of agricultural dutie s were to be eliminated under the Agreement.  
Meanwhile, Brunei was due to eliminate tariffs on 99 .4% of all tariff lines, covering 99.9% of imports 
from Japan under the Agreement.  In contrast to  Japan's commitments, 99.8% of non-agricultural 
duties and 98% of agricultural duties were to be e liminated by Brunei under the Agreement.  As was 
the case for Japan's other agreements with Chile, Mexico and Malaysia, which had been considered 
by the Committee, she noted the disproportionate lib eralization of its non-agricultural and agricultural 
sectors.  The disproportionate liberalization in th is Agreement was even more disappointing when 
noting Brunei's liberalization as compared to Japan 's.  The situation was even worse considering 
Japan's refusal to eliminate tariffs on more than 59.4% of agricultural duties, compared to Brunei's  WT/REG244/M/1 
 Page 3 
 
 
  figures of 98%.  Japan's lack of coverage of ag ricultural goods hurt other Members operating in the 
multilateral trading system and the sustained and sy stematic protection of Japan's agricultural sector, 
even within a trade preferential agreement, could only make WTO Members' efforts towards 
multilateral liberalization more difficult.  The representative of Japan  said that like other WTO 
Members, the Parties had tried their best to libera lize trade in a mutually beneficial and acceptable 
way, by taking into consideration specific inter ests and concerns.  Japan had noted the concerns 
expressed by Members.  However, she believed that  factors such as longer implementation periods 
and provisions for the future review of commit ments were an effort by  Japan towards further 
liberalization.   
7. The representative of Australia thanked the Parties for having  presented the Agreement and 
for the answers provided.  He expressed his con cerns about the low level of liberalization in 
agricultural products in some regional trade agreem ents having been considered by the Committee.  
He emphasized the significant proportion of Japan's  agricultural lines which were excluded from 
liberalization under the Agreement.  He asked the Par ties to explain the reasons for this low level of 
coverage, the disproportionate level of liberaliza tion between agricultural and industrial goods, and 
the imbalance between the commitments made by the Pa rties.  He also asked them to explain how this 
level of liberalization could meet the requirements of GATT Article XXIV to eliminate duties on substantially all the trade. The representative of Japan
 replied that, as already mentioned in her 
introductory statement, Japan considered the Agreem ent to be consistent with the requirements of 
GATT Article XXIV.   
8. The representative of the European Communities (EC)  thanked the Parties for their written 
replies and explanations on the Agreement.  She not ed that the response to question 8 in the questions 
and replies document was not satisfactory.  Japan had provided a 'standard reply'.  According to the 
Factual Presentation, Japan was due to liberalize 87.4% of its tariff lines by 2023, corresponding to 99% of its imports.  These figures showed that du ring the period 2004-2006 there was virtually no 
trade in the lines for which Japan re tained duties and asked if Japan considered that liberalizing some 
of the dutiable lines could promote trade in those lines and create new trading opportunities between 
the Parties.  She also stressed the need to pr ovide comprehensive and complete replies which 
adequately responded to and clarified Members' questions.   The regular recourse to vague and 
standard replies which normally pointed to the lack of  clearly defined rules, did not add much value to 
the discussions at the CRTA and consequently, the debate was watered down.  She urged Members to 
reflect on this.  The representative of Japan
 did not have a response to the first question.  To the 
second point, she said that Japan had tried its best to provide comprehensive answers so that the 
transparency could be enhanced.  She said she w ould be happy to answer further questions but the 
answers that had been provided in  the questions and replies documen t were the answers they had at 
the present. 
9. The representative of the United States  said that according to paragraph 90 of the Factual 
Presentation, Brunei had scheduled non-conforming me asure reservations for national treatment with 
respect to investment activities "in all services sectors on condition that measures maintained or 
adopted do not constitute a violation of obligations".  In its  Annex 7 schedule, Brunei had replicated 
the mode 3 limitation in its GATS' Schedule which specified that its commitments were unbound for 
measures concerning foreign-equity or interest in  companies established or wishing to establish a 
commercial presence.  It appeared as if the comb ined effect of the services market access limitation 
and the investment reservation were that Brunei had undertaken no mode 3 market access 
liberalization commitments under the Agreement.  She asked if this was an a ccurate characterization 
of the Agreement's provisions with respect to services supplied through commercial presence.  The 
representative of Brunei replied that Brunei had undertaken mode 3 commitments under the 
Agreement and the details would be  provided in writing at a later stage.  The representative of the 
United States,  following up on question 18 of the questions and replies document, asked Japan to 
elaborate on the "specific interest and concerns" that necessitated an implementation period that was WT/REG244/M/1 
Page 4  
 
  five years longer than that required by Brunei.  The representative of Japan
 reiterated that some of the 
points included in the Agreement re presented the results of Japan's liber alization efforts, in particular, 
the longer implementation period.  This longer im plementation period did not prejudice the 99% of 
bilateral trade which was to be liberalized within te n-years from the entry into force of the Agreement. 
10. The Chairman  noted that the consideration of the goods and services aspects of the Economic 
Partnership Agreement between Brunei Darussalam and Japan had allowed the Committee to clarify a 
number of questions and oral discussion of the Ag reement could be concluded in accordance with 
paragraph 11 of the Transparency Mechanism.  If any delegations wished to ask follow-up questions 
they were invited to forward submissions in writing to the Secretariat by 22 September 2009  and the 
Parties were asked to submit replies  in writing by no later than 6 Oc tober 2009.  In accordance with 
paragraph 13 of the Transparency Mechanism all written submissions, as well as minutes of this 
meeting would be circulated promptly, in all WTO official languages, and would be made available 
on the WTO website. 
11. The Committee took note  of the comments made. 
__________