WORLD TRADE
ORGANIZATIONWT/TPR/M/84
11 July 2001
(01-3451)
Trade Policy Review Body
28 and 30 May 2001
TRADE POLICY REVIEW
BRUNEI DARUSSALAM
Minutes of Meeting
Chairperson:  H.E. Mr. Pekka Huhtaniemi (Finland)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3
II. OPENING STATEMENT BY THE REPRESENTATIVE OF
BRUNEI DARUSSALAM 4
III. STATEMENT BY THE DISCUSSANT 5IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 6V. REPLIES BY THE REPRESENTATIVE OF BRUNEI DARUSSALAM AND
ADDITIONAL COMMENTS 9
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 12ANNEX ADVANCE WRITTEN QUESTIONS AND RESPONSES PROVIDED BY
BRUNEI DARUSSALAM 15WT/TPR/M/84
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The first Trade Policy Review of Brunei Darussalam was held on 28 and 30 May 2001.  The
Chairperson welcomed the delegation of Brunei Darussalam, led by The Honourable Pehin Dato
Abdul Rahman Taib, Minister of Industry and Primary Resources, and the discussant,
H.E. Mr. Norbert Frick (Liechtenstein).  As usual, the discussant would speak in his personal
capacity.  In accordance with established procedures, the discussant had made available in advance a
broad outline of the themes he intended to raise (document WT/TPR/D/63).
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures of the meetings.  The Report by the Government of Brunei Darussalam was contained
in document WT/TPR/G/84 and that of the Secretariat in document WT/TPR/S/84.  Copies of
advance written questions, submitted by:  Canada;  Switzerland;  Australia;  Hong Kong, China;
New Zealand;  the European Union;  Japan;  the United States;  and India were transmitted to thedelegation of Brunei Darussalam.  Written replies to these and other questions provided by the Brunei
delegation are reproduced at Annex.WT/TPR/M/84
Page 4
II. OPENING STATEMENT BY THE REPRESENTATIVE OF BRUNEI DARUSSALAM
3. The representative of Brunei Darussalam explained that in recent years his country's
comfortable external position had deteriorated, thus obliging a tightening of the fiscal outlay.  In
2001, GDP growth was estimated at 3.5% and infl ation at around 1%.  A long-term strategy for
sustainable growth had been adopted, including privatization, regulatory reform, tax reform, and the
removal of all subsidies.  Efforts to improve transparency were being accelerated.  The institutional
framework and human capacity building were being strengthened to promote diversification andenhance competitiveness in a number of areas, including information and communications
technology.  Action had been taken to promote fina ncial services, tourism and air transportation;  on
1 May 2001, Brunei Darussalam had become signatory to the world's first plurilateral open skies
agreement, involving certain APEC members.  Th e growth of small and medium-sized enterprises,
which represented 99% of the business community, was a priority area to receive support in the formof facilities and expertise.  Despite diversification efforts, the oil and gas sector would remain the
backbone of the economy as foreign investors had been invited to bid in new petroleum areas and
expansion into downstream activities was under way.
4. He reaffirmed the importance his country attached to a rules-based multilateral trading system
as well as the commitment to working with all WT O Members towards the promotion of liberalization
and the strengthening of rules.  Despite the complex work and human resources limitations, Brunei
Darussalam had worked to ensure compliance with its GATT/WTO commitments, but extensive
training on WTO matters was still needed.  The different stages of Brunei Darussalam's first Trade
Policy Review Trade Policy, such as the preparatory work, the interaction with the WTO Secretariat,
and the feedback of Members, constituted a useful experience allowing for appropriate trade policy
adjustments.
5. Asia-Pacific Economic Cooperation (APEC) Economic Leaders had agreed that a sufficiently
broad-based but manageable agenda had to be finalized so as to launch a new WTO round in 2001.
Negotiations were expected to improve market access for developing and least developed countries as
well as to reinforce special and differential treatment.  Brunei Darussalam's liberal and transparent
tariff regime would be further improved by increasing the scope and depth of the bindings in a new
WTO round.WT/TPR/M/84
Page 5
III. STATEMENT BY THE DISCUSSANT
6. The discussant (Mr. Norbert Frick) suggested that Brunei Darussalam's Trade Policy Review
could be a starting-point for evaluating the country's effectiveness in achieving policy objectives.
Despite the diversification efforts, hydrocarbon resources continued to provide most of the
Government's revenue.  Noting the recent recovery of international oil prices, he asked whether this
development reduced pressure to diversify, a primary objective of the authorities.  Despite several
efforts, foreign investment did not seem to have yet played its role in the diversification process.  He
enquired about Brunei's competitive advantage or how such advantage was to be created.  He
considered that business confidence could be greatly improved and administrative discretion reduced
if legislation implementing WTO provisions was pa ssed.  He asked whether any steps had been taken
in this respect.  In the light of the gap between the wages of the public and private sectors,
unemployment could become a serious problem.  He enquired whether there were any plans forimproving the attractiveness of jobs in the private sector.  Lack of information, transparency and
accountability to the public was of concern.
7. In the light of Brunei Darussalam's regional trade and investment links, he sought the
authorities' view on the relative roles of the Asso ciation of Southeast Asian Nations (ASEAN) and the
WTO, as well as details of the concrete benefits from membership in the latter.  The large gapbetween applied and bound tariffs had not been used so far to raise import duties.  He wondered
whether the necessary mechanism to properly notify the WTO of trade measures, such the temporary
import ban on cement, had been established.  He asked whether the domestic rice market was open to
foreign producers other than Thailand.  Limitations on logging and other forestry activities allowed
for sustainable use of natural resources and the preservation of biological diversity.
8. The services sector, which had experienced considerable growth and was an important source
of employment, had recorded a growing trade deficit owing to a decline in export receipts.  In the
absence of data, he wondered which services subsectors were responsible for this decline.  He asked
about the possibilities for diversifying the economic base in the field of services.  He was interested in
Brunei's position with regard to the possible extension of GATS commitments to more services so as
to raise investor confidence.WT/TPR/M/84
Page 6
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
9. The representative of Indonesia on behalf of  ASEAN commended Brunei Darussalam, which
was an active member of the regional group, for ably implementing its WTO obligations as well as for
encouraging foreign investment and the development of domestic industries.  ASEAN supported
Brunei Darussalam's diversification policy aimed at developing selected non-traditional exports and
services.  Brunei Darussalam had the foresight to undertake measures for accelerating economic
growth.
10. The representative of Canada indicated that his country's economic, trade and political ties
with Brunei Darussalam continued to strengthen.  Canada welcomed Brunei Darussalam's
commitment to work towards an open, rules-based, n on-discriminatory international trading system as
well as greater regional economic cooperation, particularly in the context of its APEC chairmanship in
the year 2000.  Despite heavy dependence on petroleum and natural gas exports, Brunei Darussalamwas emerging as an important trading nation in South-East Asia.  Diversification efforts toward
international financial services, greater private-sector activity, and improvement of Internet
connections, demonstrated its commitment to becomi ng an active player in the multilateral trading
system.  His delegation welcomed, inter alia,  further initiatives in areas like transparency and
accountability in government, the broadening of the tax base, reduced reliance on hydrocarbons.Canada encouraged steps to eliminate non-tariff barriers to trade.
11. The representative of Switzerland commended Brunei Darussalam for its ongoing economic
reform in investment promotion and the services sector.  The Trade Policy Review of Brunei
Darussalam had helped WTO Members to better understand its economy and policy.
12. The representative of Hong Kong, China stress ed the impressive growth of bilateral trade
between his country and Brunei Darussalam as well as their close cooperation within WTO and
APEC.  Although steps had been taken to promot e foreign investment, there was still room for
improving transparency and establishing clearer trade-related guidelines.  Despite the fluctuation of
international petroleum prices Brunei Darussalam had maintained its liberal trade policy.
Nevertheless, he encouraged tariff cuts on wood and furniture, fabricated metal products, and
chemicals.  He encouraged an expansion of the limited GATS commitments to more sectors so as to
attract more foreign investment in the services sector.  A reduction of the exclusivity period of the twostate operators in the telecommunications services would improve services and bring further
technology progress.
13. The representative of Australia commended Brunei Darussalam's lead within APEC for the
launching of a new round of multilateral trade negotiations.  Australia and Brunei Darussalam had a
long-standing and positive relationship covering trade in goods and services.  He expressed the hopethat its liberal trade regime would be further improved with the decision to set agricultural tariffs to
zero (except on live animals).  He encouraged Brunei to convert the few specific tariffs to ad valorem
rates as well as to eliminate tariff peaks on some motor vehicles.
14. While acknowledging diversification efforts (b ased on human capacity building) towards a
regional financial and business services hub, he encouraged the removal of restrictions on theprovision of professional services by foreign opera tors, and recognition of a wider variety of overseas
university qualifications for government service.  Intentions to privatize and scale-back subsidies
would contribute to the development of a more robust and sound private sector.  He encouraged
further efforts to bring domestic legislation into  conformity with international (including WTO)
obligations as well as to streamline the implementation of new food import regulations.WT/TPR/M/84
Page 7
15. The representative of New Zealand commended Brunei Darussalam as a valued partner
playing a constructive role in several regional fora such as APEC and ASEAN.  She urged Brunei
Darussalam to pass legislation implementing WTO obligations.  She praised the zero applied tariff on
agricultural imports.  Her delegation was concerned about the use of temporary import bans,
particularly on construction products.  She expressed the view that sanitary and phytosanitary
requirements ought to be based on sound science and core WTO principles.  Agricultural subsidies
had to be WTO consistent and the Aggregate Measurement of Support should be notified as soon aspossible.
16. The representative of Japan highlighted his country's close relationship with Brunei
Darussalam in several areas, including trade, investment, technical cooperation, and participation in
ASEAN.  He recalled that Brunei Darussalam's APEC chairmanship had led to a call for launching a
new round in 2001, thus indicating its strong support for the multilateral trading system.  A rathermodest and stable growth rate had led to a decline in GDP per capita in the 1990s.  Japan appreciated
Brunei Darussalam's diversification and foreign investment promotion efforts, but Japanese investors
faced lack of transparency (e.g. regulatory changes) and administrative discretion (e.g. approval
delays, documentation requirements).
17. Japan encouraged the reduction of the significant gap between applied and bound rates.  He
also requested strict implementation of the recently enacted laws for the protection of intellectual
property rights, particularly on pirated editions of CDs and video CDs.  In the light of the importance
of the services sector to the economy, Japan recommended that Brunei Darussalam expand the
coverage of its commitments under the GATS and reduce MFN exemptions in the ongoing services
negotiations.  He asked for more transparency in the procedure for granting licences in banking
services.
18. The representative of the European Union praised Brunei Darussalam's continuous support for
liberalization of the multilateral trading system.  Nevertheless, there had been no mention of the
launching of a new round in its report.  He trus ted that WTO obligations were complied with and
reflected in domestic legislation.  He highlighted the main elements of the political and economic
framework of cooperation between the EU and Brune i Darussalam (e.g. within ASEAN).  As Brunei
Darussalam attached great importance to its ties with ASEAN and APEC, he wondered whether it wasof the view that regional integration should not hold back multilateral rule-making.
19. He sought more information on plans to develop the services sector as a means of diversifying
the economy.  In this context, he asked for the reasons behind the limited GATS commitments,
particularly the absence of commitments in transport or tourism.  Concerning government
procurement practices, he requested clarification on quotation criteria, registration of foreign biddersand the duties of their (foreign bidders) Bruneian agent.  He asked whether the 2001 patent legislation
had been enacted, and requested details of the main changes resulting from the introduction of this
legislation.
20. The representative of the United States highlighted the solid and broadened trade and
investment ties between her country and Brunei Darussalam.  In particular, U.S. imports of
manufactured goods from Brunei Darussalam had increased sharply.  Brunei Darussalam was an
active supporter and participant in APEC and the WT O.  Its chairing of APEC in 2000 had culminated
in the launch of a broad-based Action Agenda on the New Economy to ensure that APEC members
used advances in information technology to boost productivity and stimulate economic growth.
21. In response to the worsening of the trade and current account balances from 1996 to 1998, the
authorities had reduced expenditures and placed increased emphasis on export diversification and
foreign investment promotion.  State dominance wa s present in most sectors of the economy includingWT/TPR/M/84
Page 8
manufacturing energy generation and distribution, and transport and communication services.
Privatization and regulatory reform had to be speeded up.
22. Brunei Darussalam's trade and related policies were usually liberal but certain practices
reduced their positive impact.  Transparency n eeded to be improved so as to attract, inter alia , foreign
investment.  Apart from changes to intellectual property rights and customs valuation, domestic
legislation had not been amended to bring it into conformity with WTO Agreements.  Brunei
Darussalam needed to implement the new customs system quickly, as well as to take enforcementactions and to impose deterrent penalties for intellectual property rights violations. Brunei's
participation in the November 2000 plurilateral open skies agreement was indicative of future
liberalization of aviation services.  She urged the authorities to consider improving market access
predictability by, inter alia,  making further commitments under the GATS, as well as to maintain a
course towards fuller liberalization of the economy.
23. The representative of India complimented Brunei Darussalam for its recent economic
performance and long-term strategy in areas such as  government finance and diversification.  Noting
that the Secretariat Report as well as the Govern ment Report referred to the importance attached to
regional trade agreements by the Government of Brunei Darussalam, he pointed out that while the
Government report highlighted its policy priorities to be in favour of 'open regionalism', theSecretariat Report had observed that 'the Government of Brunei appeared to attach greater importance
to ASEAN and APEC than to the WTO'.  He also referred to the observation made in the Secretariat
Report that 'the lowering of tariff and non-tariff barriers to trade within the ASEAN region as a result
of the ASEAN Free Trade Agreement may have led to significant trade diversion'.  The representative
of India stated that it would be important to ensure that the regional arrangements were
complementary to the multilateral trading system and fully compatible with the WTO rules and that
there were no trade diverting effects.  He enquired as to how this would be addressed.  Referring toboth the Government and Secretariat Reports, he sought the views of the Government of Brunei
regarding its policy concerning the services sector, which had been identified as a priority area for its
diversification efforts.  Finally, he commended Brunei for its significant efforts to ensure compliance
with its WTO commitments, despite the heavy burdens placed on its limited human resources, and
supported the request of the Government of Brunei Darussalam for adequate technical cooperation.
24. The representative of Brunei Darussalam expressed his appreciation to all speakers for their
praise on his country's recent work within APEC, and diversification efforts, which at times might not
have met the expectations of certain partners.WT/TPR/M/84
Page 9
V. REPLIES BY THE REPRESENTATIVE OF BRUNEI DARUSSALAM AND
ADDITIONAL COMMENTS
25. The Chairperson invited the representative of Brunei Darussalam to focus his responses on
three main themes:  (i) economic environment;  (ii) trade policy measures;  and (iii) sectoral policies.
26. The representative of Brunei Darussalam presented his delegation's preliminary written
responses to questions raised by Members in advance and during the meeting (Annex).  He pledged to
respond in due course with replies to questions relating to financial services and governmentprocurement.
(i) Economic environment
27. The representative of Brunei Darussalam highlighted the importance of diversification by
indicating the persistent dominance of the oil and gas sector (about 50% of GDP).  The services sector
had declined due to the adverse effects of government spending.  A diversified and healthy privatesector was required to create employment opportunities.  Privatization was to be undertaken and the
tax base was to be expanded.
28. Brunei Darussalam's investment regime was transparent, straightforward, and
WTO-consistent.  A local equity requirement was imposed if government facilities were requested.
Transparency and clarity of the regime were to be improved through the revision of the EconomicDevelopment Board Act and implementation of a new Industrial Coordination Order.
29. Efforts to improve the transparency of policies and regulations were being expanded and
accelerated.  Administrative measures such as the Civil Service Client's Charter would support these
efforts.
30. Brunei Darussalam was in the process of incorporating the Final Act Embodying the Results
of the Uruguay Round of Multilateral Trade Negotiatio ns into its national legislation.  Apart from the
Patent Order, legislation on the protection of intellectual property rights was effective, whereas theCustoms Valuation order was to come in force by 1 September 2001.
31. The discussant recalled the number of questions raised by delegations on issues such as
WTO;  implementation, transparency, clarity of the legal framework, diversification, privatization and
foreign direct investment, were the key issues.  He took note of the intention of  the authorities to take
action in several areas and reiterated his question on regional cooperation versus WTO.
32. The representative of India sought comments on the issue of regionalism versus the WTO.
33. The representative of the European Union considered that the oral replies did not reflect
adequately the wide interest expressed by numerous TPRB participants on several aspects of Brunei
Darussalam's policies.  Questions had been raised on several matters, including regionalism and
transposition of WTO rules, and indicated that it would be regrettable if members had  to wait for sixyears (i.e. until the next TPR) to receive replies.  He enquired about Brunei Darussalam's place within,
and expected benefits from membership of the WTO.
34. The representative of the Republic of Korea expressed appreciation for Brunei Darussalam's
strong support for the multilateral trading system and open regionalism.  The healthy bilateral trade
relationship between his country and Brunei Darussalam was to be further expanded.
35. The representative of the United States indicated that, in addition to the written replies, her
delegation would appreciate further details during the meeting regarding steps to increaseWT/TPR/M/84
Page 10
transparency and bring domestic legislation's into compliance with WTO Agreements as well as
efforts to increase investments.
36. The Chairperson invited the representative of Brunei Darussalam to elaborate on the issue of
the multilateral versus regional approach.  Concerning investment incentives, he sought clarification
on the issue of local equity requirements for the supply of government facilities to investors.
37. The representative of Brunei Darussalam explained that local equity requirements affected
investment projects where land, building, or any infrastructure work had been provided by the
government in the course of the investment.  He clarified that his country's "original trading
arrangement" was based on WTO consistency, and multilateral rules formed part of the foundations of
its trade policy.  Within APEC, his country had been the leading supporter of an early new WTO
round by the year 2001.  Transparency was to be increased through the ongoing process of
incorporating WTO provisions into domestic legislation.
(ii) Trade policy measures
38. The representative of Brunei Darussalam recalled the autonomous duty reduction of
1,400 tariff lines to zero undertaken since its accession to the WTO.  Bindings were to be further
improved in line with its developmental, financial, and trade needs in the context of a new round.
39. The temporary import restriction on roofing material, which had been implemented on an
MFN basis to stabilize excess supply, had been lifted;  a similar restriction on cement imports was
being reviewed.  No import quotas were in force.  The importation and stockpiling of two staple food
items was to ensure security and stability of supplies.  Beef and poultry imports had to meet halal
requirements, justified under GATT 1947 Article XX.  New intellectual property rights legislation had
resulted in additional enforcement measures but no data or information, other than two cases
examined under the Copyrights Order, were yet available.
40. The discussant praised Brunei's plans for addressing tariff issues during the next round of
negotiations as well as increased enforcement measures with regard to intellectual property rights
legislation.  He noted that import restrictions should be properly notified to the WTO.
41. The representative of Japan asked whether under the new legislation, in addition to the
third-party enforcement mechanism, any positive mechanism had been put in place to protect
copyrights.
42. The representative of the European Union referred to the status, extensive activities,
transparency, and public accountability of the Brunei Investment Agency (BIA) and Semaun
Holdings.  He wondered how Semaun Holdings could be private while at the same time wholly owned
by the Government and under the jurisdiction of the Ministry of Industry and Primary Resources.  A
secrecy clause and the lack of published annual reports made their role in the economy far from clear.He asked why the activities of industrial holdings needed to be kept secret, and whether secrecy on
the activities of such groups constituted a strong impediment to foreign investment and private sector
involvement in diversification.
43. The representative of Brunei Darussalam indicated that replies on government procurement
issues would be delivered at a later stage, upon consultation with experts at the capital.  He clarified
that third-party enforcement action was taken only if the right holder or an exclusive licensee had
made a complaint.WT/TPR/M/84
Page 11
44. Semaun Holdings was operated like a commercial entity and no subsidy element was
involved.  In the light of the size of the domestic private sector, Semaun Holdings was to spearheadindustrial development and constituted a viable partner to foreign investors willing to develop a joint
venture in Brunei Darussalam.  These joint ventures would be given back to the private sector later.
Concerning the BIA, he considered that it was not  within the purview of the TPRB to discuss its
activity.
(iii) Sectoral policy issues
45. The representative of Brunei Darussalam indicated that support to the agricultural sector was
in form of incentives for infrastructure development, including clearing of new farm areas,
construction of main farm roads, irrigation, and drainage.
46. Progressive liberalization of the services sector would be undertaken in accordance with
national policy objectives, the level of development, and GATS Article XIX.  He recalled that BruneiDarussalam was a signatory to the world's first plurilateral open skies agreement, and had made
commitments in telecommunication services under the Fifth Protocol to the GATS.  Legislation for
the privatization of Jabatan Telekom Brunei would be enacted soon, and a second mobile
telecommunications licence was to be granted in the course of 2001.  Further developments
comprised:  the issue of four additional licences on Internet Access Services Provision;  theliberalization of re-sale of Internet Access Services;  and the licensing of a second public phone
operator.
47. In its liberalization process, Brunei Darussalam would adopt a gradual approach so as not to
impair growth of domestic industries.  To co mply with WTO commitments, Brunei Darussalam
needed extensive training and technical assistance, including for drafting legislation.
48. The discussant observed that the improvement of GATS commitments was a pre-requisite for
facilitating investment in the services sector.
49. The representative of Brunei Darussalam recalled that his country was small, and technical
cooperation was required in order to fully meet WTO commitments.WT/TPR/M/84
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VI. CONCLUDING REMARKS BY THE CHAIRPERSON
50. Members warmly welcomed the delegation from Brunei Darussalam to its first Trade Policy
Review.  This Review has allowed Members to come to a better understanding of Brunei's trade and
trade-related policies and of the challenges it faces as it seeks to diversify its economy.
51. Brunei is a small relatively open economy whose prosperity is due mainly to its abundant
petroleum and natural gas resources.  However, the prospect of an eventual depletion of these
resources has prompted the Government to pursue an active industrial policy in order to encourageeconomic diversification.  But for the time being, efforts to foster economic diversification are
complicated by a small and non-competitive private sector, which is partly attributable to the fact that
remuneration in the public sector is higher than that in the private sector.  Members asked how the
Government intends to improve the relative attractiveness of jobs in the private sector.
52. Members welcomed the fact that Brunei's trade and investment regime is relatively liberal –
the average applied MFN tariff, for example, was only 3.1% in 2000.  However, several aspects of the
regime are characterized by a lack of transparency and therefore provide scope for administrative
discretion, which could hamper the Government's efforts to diversify the economy.  Some Members
expressed concern that this lack of transparency, and thus public accountability, also seems to extend
to the operations of certain government bodies, notably the Brunei Investment Agency andSemaun Holdings.  In response, the Brunei delegation outlined steps being taken to improve the
transparency of government policies and regulations, especially those pertaining to the investment
regime.  It added that Semaun Holdings, although under the Ministry of Industry and Primary
Resources, nonetheless operates in accordance with normal commercial principles.
53. Members noted that Brunei had ratified the WTO Agreements but had yet to implement
legislation to bring domestic laws into conformity with the obligations in these Agreements, except in
the case of TRIPS;  instead, WTO provisions have hitherto been implemented in "good faith" or on a"best efforts" basis.  Members sought clarification of the Government's position and intentions in this
regard.  In response, the Brunei delegation indicated that the Government is in the process of
incorporating these provisions into its national legislation.  At the same time, Members commended
Brunei's efforts to adhere to its WTO commitments despite the heavy burden placed on its limited
institutional capacity, especially human resources.  Several Members also welcomed Brunei's supportfor the launching of a new round of negotiations.  Members warmly congratulated Brunei on its
successful chairmanship of APEC in 2000.
54. Members noted that Brunei made GATS commitments in four out of 12 service sectors.  They
asked whether Brunei intends to make commitments in other sectors, such as transport and tourism,
which it is trying to develop and where policies appear to be already relatively liberal, particularly asthis could support the diversification effort.  In response, the Brunei delegation stated that the
Government intends to undertake progressive liberalization taking into account its national policy
objectives and level of development.
55. Members also sought clarification of the relative roles of ASEAN and APEC on the one hand,
and the WTO on the other, in promoting trade liberalization;  they welcomed Brunei's assurance thatregional arrangements would be complementary to the multilateral trading system.
56. Questions were raised about the wide gap between bound and applied tariffs, which impart a
degree of uncertainty to the tariff in that it provides Brunei with considerable freedom to raise its
tariffs, although Members recognized that Brunei had seldom, if ever, taken advantage of this
freedom.  They noted that, while small in number, Brunei's tariff peaks of as much as 200% coulddistort trade significantly.  At the same time, Members welcomed Brunei's plans to convert theWT/TPR/M/84
Page 13
remaining small number of specific duties to ad valorem  tariffs, thereby increasing the transparency
of the customs tariff .
57. Members also sought details and clarification on a number of other policies and measures,
including:
• customs valuation and rules of origin;
• temporary bans on construction products, which had not been notified to the WTO;
• regulations concerning food imports;
• government-to-government contracts in the case of rice;
• export measures;
• government procurement;
• taxation and incentives;
• progress on privatization;
• competition and regulatory issues (including price controls);
• measures to enforce intellectual property rights;
• level of support to agriculture;
• efforts to liberalize telecommunications services;
• financial services;  and
• tourism.
58. Members expressed their appreciation for the written and oral responses provided by the
delegation of Brunei Darussalam to advance questions as well as to those posed during the meeting.
59. In conclusion, I feel that we should congratulate Brunei Darussalam on maintaining a
relatively open trade and investment regime.  I think that we are all aware of certain difficulties
Brunei faces in transparency and in implementation in terms of notifications and domestic legislation,
but I also note that the delegation made Brunei's commitment to the WTO very clear.  Generally, Ithink we understand that technical assistance in some areas might ease Brunei's implementation
problems.  I think that we also agree that a further liberalization of the trade regime, including
additional GATS commitments, could assist Brunei both in its efforts to diversify its economy and in
its further integration into the multilateral system, to the benefit of us all.WT/TPR/M/84
Page 15
ANNEX I
ADVANCE WRITTEN QUESTIONS AND RESPONSES PROVIDED
BY BRUNEI DARUSSALAM
CANADA
Secretariat Report (WT/TPR/S/84)
III. Trade Policies and Practises by Measure(2) Measures directly affecting imports
(iv) Applied Tariff
(paragraph 19)
According to para. 19, although the overall average applied MFN tariff is low, tariff escalation is
particularly pronounced in wood and furniture.  As commercial logging in the rainforest is prohibitedby law, Brunei cannot source wood products domes tically and must import them from abroad.  High
tariffs on wood, therefore, only serve to increase the costs for Brunei’s importers and consumers.
Please explain the rationale for maintaining high tariffs on wood.
The export of timber and logs from Brunei Darussalam is prohibited, in line with our "reduce-
cut" policy, with the ultimate objective for no-cut policy.  In order to develop the downstreamactivities, we are reviewing the tariffs of wood and log.
III. Trade Policies and Practises by Measure
(2) Measures directly affecting imports
(v) Tariff Bindings
(paragraph 27)
According to para 26-27, while Brunei's current applied MFN tariff rates were low at 3.7% in 2000,
Brunei's overall average bound rate was 24.8%, 23.8% for agriculture (23.9% according to the WTOdefinition) and 25% for non-agricultural products.  Narrowing this margin of difference can improve
predictability for foreign exporters, as well as for Brunei’s importers.  What is the rationale for
maintaining such a large margin between applied and bound rates for non-agricultural products?
Please refer to our response to Japan on Chapter III (Trade Policies and Practices by Measure)
para. 27.
With respect to agricultural products, the Secretariat report notes that Brunei authorities maintain
that the difference between bound rates and applied rates is necessary to address potential food
security concerns.  Please explain how this steep differential contributes to food security.
The wide difference is attributed to the tariffication of agricultural products that had been
agreed during the UR.WT/TPR/M/84
Page 16
III. Trade Policies and Practises by Measure
(2) Measures affecting production and trade(iv) Competition Policy and Regulatory Issues
(paragraph 97)
According to para. 97, while efforts are being made to increase competition, including through
deregulation and corporatization/privatization, Brunei has no specific legislation on competition
policy.  Please explain specifically what efforts are being made to increase competition in accordancewith WTO commitments.
Whilst there is no specific competition policy, Brunei Darussalam, as a member of APEC,
participates in the work programme in this issue.  Focus is currently educative, namely, on
understanding the implications and relationship between competition policy and other policy areas.
CANADA ADDITIONAL QUESTIONS
Secretariat Report (WT/TPR/S/84)
Summary Observations
(5) Sectoral Policies
(paragraph 25)
The Secretariat Report states that Brunei’s GATS commitments are rather limited.  They cover only 4
of the 12 categories of services listed in the services sectoral classification list (MTN.GNS/W/120).  It
also notes that Brunei has not made commitments in  sectors such as transport (other than air) and
tourism, which it is trying to develop further and in which policies appear to be relatively liberal.
Does the Government of Brunei intend, in the current services negotiations, to make commitments in
these sectors?  If no, please explain why not.
In accordance with Article XIX of the GATS, Br unei Darussalam will be participating in the
market access negotiations of services.
IV. Trade Policies by Sector
(5) Services
(iii) Financial Services
(b) Banks and Finance Companies Policy
(paragraph 56)
According to para. 56, the Financial Institutions  Division (FID) of the Ministry of Finance is
currently drafting a new Act to replace the existing Act of 1957.  Please provide an update on the
progress of this legislation?
Response will be submitted at a later date after further clarification from our relevant
authorities.WT/TPR/M/84
Page 17
IV. Trade Policies by Sector
(5) Services(iv) Telecommunications
(b) Policy Framework
(paragraph 74)
According to para. 74, the Government of Brunei has declared in its APEC Individual Action Plan,
that it intends to participate in the APEC telecommunications mutual recognition agreement (MRA).Longer term plans include opening up value-added services for competition;  consideration may also
be given to issuing licences for local switched voices services, public cellular mobile telephone
services employing technologies other than AM PS and GSM, and international telecommunication
services.  What is the Government of Brunei’s proposed timeframe for liberalization of these services?
Brunei participated in the Fifth Protocol to the GATS and made commitments in local,
international and mobile telephone services.  In Brunei Darussalam, JTB is the exclusive provider of
local voice telephony while DSTCom  is the exclusive provider of mobile telephone services.  Brunei
has also stated in its commitments that JTB's monopoly over voice telephone services will be
maintained for ten years after its privatization and subject to a Government review to allow new
suppliers into the market.  Similarly, for mobile telecommunications services, the Government willconsider issuing new licences to mobile telecommunications providers employing other than AMPS
and GSM technology in 2010.
As for the privatization of JTB, the necessary laws have been finalized and are anticipated to
be enacted very soon.  There are three laws altogether.  One is a law establishing a new independent
regulator; another is a new telecommunications law replacing the existing telecommunications act and
third is "Telecommunication Successor Company Order" which will enable JTB’s staff, asset and
liabilities to be transferred to a new company.
As for the provision of mobile telecommunications services, the Government has recently
announced that it would award a second mobile licence in Brunei Darussalam.  Details on the
mechanism of award of the licence will be made available by the Ministry of Communications this
year.
Recently the Government has issued four additional licences on Internet Access Services
Provision (IASPs), liberalized reselling of Internet Access Services and licensed a second public
phone operator.
SWITZERLAND
Foreign direct investment/privatization
I (4) 29
In order to increase transparency and accurate information on the economy, does the Government of
Brunei (GoB) intend to make data by major foreign investor available in the near future?  If yes,
when?  If not, why?WT/TPR/M/84
Page 18
Comprehensive data on social and economic indicators is available.  However, we still need
to improve those that are of interest to foreign invest ors, i.e. investment and services.  In this regard,
the Government is revamping and strengthening the Statistics Division of the Economic Planning and
Development Department, and welcomes technical cooperation.
I (5) 32 + III (1) 6 + IV (1) 4
Is the GoB going to clarify guidelines on sectors that require a certain amount of local participation?
A local equity requirement of not less than 30% applies to joint ventures in agriculture,
fisheries and food processing, only if government facilities such as government-developed industrial
sites are applied for.
The domestic market is dominated by state-owned enterprises (some of which are monopolies).  This
seems to be an important barrie r to both domestic and foreign investment:  does the GoB plan to
reduce its direct involvement in the economy?  Are there concrete plans for privatization of state-owned enterprises?  If yes, what is the foreseen time schedule?
Our long-term strategy for sustainable growth aims, among others, at strengthening
government finances and the private sector.  This includes the privatization of several government
services, such as the Muara Container Terminal and the Telecommunications Department.
What is the role and scope of BIA involvement in the development of the industrial sector of Brunei?
Are there plans to make BIA as well as state-owned enterprises more transparent and accountable to
the public?
BIA does not directly play a role in the industrial development in Brunei but like all
government departments, BIA encourages foreign dir ect investments into Brunei Darussalam.  In this
respect, BIA is happy to assist potential investors, to the extent it could, in familiarizing and
understanding the local economic and investment environment.
BIA is governed by the Brunei Investment Agency Act and there is a "Preservation of
Secrecy" clause within the Act which forbids disclosure of information relating to the affairs of the
Agency.
Financial services
IV (5) (iii) 51, 52
The GoB hopes to transform Brunei into a Service Hub for Trade and Tourism by the year 2003.
Initial steps were already taken in 1993 but progress has remained very slow, particularly in
attracting foreign investors Brunei.  The international business community is not yet satisfied with the
regulatory environment and is demanding a strengthened financial infrastructure, especially a
stronger accounting and auditing industry and greater government transparency.  What
supplementary changes, to improve the supervisory framework is the GoB wi lling to implement and
when?
Response will be submitted at a later date after further clarification from our relevant
authorities .WT/TPR/M/84
Page 19
AUSTRALIA
Tariff peaks
Australia notes that the primary reason for the significant increase in tariffs for various types of
motor vehicles is to limit car ownership in order to  preserve the environment.  We would equally note,
however, that non-trade restrictive measures such as development of public transport infrastructure
and provision of attractive public transport alternatives could be even more successful in curbing car
ownership and corresponding environmental damage.  Are there any plans in Brunei to consider
non-trade distortive alternatives to high tariffs to achieve environment protection through lower
ownership rates of certain motor vehicles?
These tariffs are applied on a non-discriminatory basis and not for protectionist reasons since
we do not have domestic car manufacturing.  In the meantime we are developing our public
infrastructure but this is a long-term strategy.
Recognition of Australian qualifications for Government Employment and for Professional
Practice
Australia welcomes Brunei Darussalam's focus on human capacity development as means of effecting
future economic growth.  Australia is already contributing to this process by providing education
services to Brunei students, both in Australia and Brunei, and is keen to expand this participation.However, the Brunei Government recognizes qualifications provided by only a few of the Australian
Universities.  What is the basis for the non-recognition of qualifications provided by several
Australian Universities which are recognized under the Australian law as providing suitable
professional qualifications?  Are there any plans to streamline and speed up the process of
recognition of overseas professional qualificat ion of Brunei Government service and for private
professional practice in Brunei?
Brunei Darussalam at the moment is engaging many foreign professionals and expertise
including from Australia.  It is in our self-interest to keep our labour market relatively open.  As
regard to recognition of qualification from other institutions we are constantly reviewing these
institutions, the contents of their programmes with a view to recognizing these qualifications.
Market access for professional services
Australia notes that Brunei has only made GATS commitments with regard to four out of twelve
services.  However, Australia would argue that improving access to professional services would allow
Brunei professionals to work closely as well as compete with a wide range of international-level
professional service providers (for example, architects, lawyers, etc.) which would act to increase the
competitiveness of Brunei indigenous service providers, thus contributing significantly to the human
capacity development.  Are there any plans to remove or relax restrictions on professional services?Does Brunei intend to make more commitments under GATS in the future?
In accordance with Article XIX of the GATS, Br unei Darussalam will be participating in the
market access negotiations of services.
Government regulations - Food sector
The recent implementation of the newly adopted food regulations has led to some confusion amongst
overseas exporters and domestic importers as to the exact requirements with which they need to
comply, which has resulted delays in obtaining import licences for food items.  As one of Brunei'sWT/TPR/M/84
Page 20
major food suppliers, Australia would like to enquire whether action is planned to streamline the
implementation of the new regulations to redu ce processing time for food import licences and to
clarify further the new requirements to affected parties?
Brunei Darussalam has notified our Food Act to the WTO and in this regard, we have given
grace period until the end of the year and in the meantime we will be doing a lot of educative process
in order to inform our importers and exporters on the procedures.
Transparency of Government policymaking and administration
When does Brunei plan to incorporate WTO obligations into domestic legislation?
Brunei Darussalam is now in the process of incorporating the WTO Agreements into national
legislation.
Despite the scope and complexity of the work involved, and the heavy burdens placed on its
scarce human resources, Brunei Darussalam is  working to ensure full compliance with its
commitments.
HONG KONG, CHINA
A. Foreign Investment Regime
(WT/TPR/S/84, p. 26, para. 39)
It is noted from the Secretariat Report that foreign investment in Brunei is in principle open for all
sectors, except for those important for national food security and those based on local resources.
However, the Secretariat Report also commented that investment procedures in Brunei are not always
clear.  Approval is required at various stages.  However, there appears to be no clear time limits for
each of these stages.  The guidelines on which sectors or industries are important for national food
security or require local participation appears to be unclear too.  We would like to know whether
Brunei has any plan to improve the transparency of its investment regime in these respects.
Please refer to the response for the questions by the USA on Chapter II (5)(i) para. 39.
B. Import Prohibitions
(WT/TPR/S/84, pp. 43-45, paras. 30-31)
It is noted from the Secretariat Report that "i mport permits" are required for certain restricted
products including mineral water, salt, sugar, rice, and used vehicles.  At the same time, it appears
that the same products could be imported under "licence".  Could Brunei provide clarifications on thedifferences between the two import documents and the purpose for maintaining the difference?
The term of license in this respect also refers to import permit, as in actual practice, there are
no licences issued for the purpose of importing such restricted products/goods.  Import permit that
have been granted and issued by other relevant authorities is adequate for the importer to import
certain products i.e. mineral water and chemicals.
For those products/goods under the Customs (Prohibition and Restriction on Imports and
Exports) Order, such as salt, sugar, rice and used vehicles, a Customs Admission Permit (AP), in
addition to the import permit issued by other relevant authorities, will be required.WT/TPR/M/84
Page 21
(WT/TPR/S/84, p. 46, paras. 32-33)
According to its APEC Individual Action Plan 2000, Brunei maintains no import quotas.  However, it
appears from Brunei's import licencing requirem ents that poultry and beef are subject to import
quota.  Would Brunei clarify whether it is at present maintaining any import quota?
There is no import quota in Brunei Darussalam.  The importation of these products need to
comply with 'halal' requirements.
NEW ZEALAND
Question 1
The WTO Secretariat report on Brunei notes (WT/TPR/ S/84, p. ix, para 12 and p. 30, para. 3) that a
ban on the import of roofing material was recently lifted.  This is true for stone chip-coated tiles but
New Zealand understands that the ban remains in place for paint-coated metal roofing tiles.  The
temporary ban on the import of paint-coated metal roofing tiles dates from November 1999.  Brunei
has, however, committed itself to lifting this ban in the near future.  We would be grateful if Brunei
could comment on the objective of such measures and their WTO compatibility.
Brunei Darussalam will be lifting the temporary ban on New Zealand's paint-coated metal
roofing tiles at the end of May 2001.  Please refer to the response given to the EU questions on
Chapter III (2)(vi) para. 7.
Question 2
We note in the Secretariat report that separated, skimmed and filled milk products are subject to
restrictions for security of supplies and price stability (Table III.4 in WT/TPR/S/84) and licensing
(Table III.5).  The Secretariat report states, however, these products are no longer a restricted
import.  We would be grateful if Brunei could advi se whether it intends to take any formal steps to
remove this restriction.
Response will be submitted at a later date after further clarification from our relevant
authorities.
Question 3
We note that Brunei has not submitted its notification of Aggregate Measure of Support (AMS) since
1995.  What steps does Brunei intend to take to ensure that the appropriate AMS notifications are
made to the WTO on regular basis?
Please refer to response to Questions by the USA on Chapter IV (2)(ii).
Question 4
Brunei has notified the Secretariat that it does not maintain any subsidies pursuant to Article XVI:1 of
GATT 1994 or Article 25 of the Subsidies and Countervailing Measures Agreement.  The Secretariat's
report notes nonetheless that Brunei appears to maintain subsidies for agricultural inputs and forservices such as water, energy and telecommunications.  Could Brunei please provide further details
on the nature of these measures?
Please refer to response to Questions by the USA on Chapter III (4)(ii) (b).WT/TPR/M/84
Page 22
EUROPEAN UNION
Report by the Government (WT/TPR/G/84)III. Trade Policy Framework
(para. 22)  The report states that the Government will be formulating a services sector policy to
diversify the economy.  We would be interested to know if any concrete actions have already been
started.
Brunei Darussalam has not made any concrete actions on this matter, however, we welcome
any suggestions/comments/ideas from other Members in this respect.
V. Concluding Remarks
The EU is pleased that Brunei continues to support an open, rules-based and non-discriminatory
multilateral trading system and that the Government remains committed to trade liberalization within
the WTO framework.  To fully benefit from this syst em, we believe, however, that it is important for
Brunei to ensure that its WTO obligations are better reflected in the country's national laws.
Please refer to the response given to Australia's Question No. 5.
We would also be grateful if Brunei could inform what are its priorities for a new round of trade
negotiations and share with us its views on how interests of countries like Brunei could best be
integrated in a Round?
Please refer to the response given to the Questions by the USA for Chapter II (3).
Report by the Secretariat (WT/TPR/S/84)
Summary Observations
(para. 24)  The report states that Brunei’s commitments under the GATS are limited.  We would be
interested to know why it "has not yet made commi tments in sectors such as transport and tourism,
which it is trying to develop further and in which policies appear to be relatively liberal"?
Please refer to the response given to the Questions by the USA for Chapter IV (5)(vi)(b).On the transport sector, in accordance to Article XIX of the GATS, Brunei Darussalam will
be participating in the market access negotiations of services.
(para. 27)  As far as regional (trade and investment) policies are concerned, the report states that
Brunei attaches great importance to ASEAN and APEC.  Could Brunei confirm that it shares our view
according to which further regional integration should not hold back multilateral rule making?  Doesthe Government also agree with us that especially in the interest of development countries, and in
parallel to regional co-operation, the multilateral system under the WTO needs further
strengthening?
Participation in regional economic forums is based on the concept of "open regionalism" in
which regional economic cooperation is seen as a building block towards multilateral tradeliberalization.WT/TPR/M/84
Page 23
Brunei Darussalam is also committed to working together with all WTO members to promote
further liberalization and to strengthen and develop rules through a new round of multilateral tradenegotiations.
III. Trade policies and practices by measure
(2) Measures directly affecting imports
(iii) Customs valuation and rules of origin
(para. 13)  Brunei is to fully implement the Cu stoms Valuation Agreement from January 2000.  We
would be grateful if Brunei could confirm the time-scale of end of June 2001 for entry into force and
implementation of the new legislation on customs valuation.
Please refer to the response given to the Questions by the USA to Chapter III (2)(iii)(a).
(vi) Import prohibitions
(para. 29)  The report states that ‘there appears to be a "temporary" import ban on cement, while a
similar "temporary" ban on roofing material was lifted recently.  We would be pleased to learn about
the legal basis on which these "temporary" import bans were imposed under WTO rules?
This measure is applied on an MFN basis and takes into account our development needs.
The excess supply has since stabilized and the temporary bans will be or has been lifted.
(x) Government Procurement
(para. 53)  Could Brunei please explain further the exact criteria used to arrive at a decision to
accept the quotation with the best "value for money at reasonable prices".  How is the term
"reasonable" interpreted?
(para. 54)  We would be interested to know if th e "15% margin of preference" refers purely to price,
or do other factors come into play?  Does it apply to every level of purchase value?
(para. 57) We would be grateful if Brunei could inform what the procedure for the registration of
foreign companies at the relevant ministries or de partments is when bidding for specialized projects.
(para 57)  Could you also please indicate what the purpose and duties of the agent are who is to be
retained in Brunei Darussalam by foreign bidding companies.
Written response to the above questions on Government Procurement will be transmitted at a
later date.
(4) Measures affecting production and trade
(ii) Incentives
(d) Other Assistance  East ASEAN Growth Area
(para. 87)  Could Brunei please indicate whether the incentives outlined are available to all firms
regardless of nationality, and if tax concessions are not contingent upon export performance?WT/TPR/M/84
Page 24
All investment incentives are applied on an MFN basis and Brunei Darussalam does not
maintain any WTO-inconsistent trade related investment measures.
(v) Intellectual property rights
(paras. 99, 104, 105)  We would be interested to know if the new patent legislation, which was
announced for the first quarter of 2001, has already been enacted?  Could you also please describe
the main changes which have already occurred or will occur due to this new legislation?
Please refer to response for Question by the USA Chapter III (4)(v) para. 99.The Patent legislation which was scheduled to be in place for the first quarter of 2001, has yet
to be enacted.  The new legislation will enable registrations to be filed directly in Brunei Darussalam.
Currently only the re-registration of UK, Singapore and Malaysia registered patents is granted in
Brunei.  A summary of the new legislation is provided in paras. 104 and 105 of Chapter III of the
Secretariat’s Report.
Article 39.3 of the TRIPs Agreement obliges members, when requiring (as a condition of approving
the marketing of pharmaceutical or agricultural chemical products which utilise new chemical
entities) the submission of undisclosed test or other data, to protect such data against unfair
commercial use and disclosure.  We would be grateful  if Brunei could explain how it has implemented
/intends to implement these provisions.
Brunei Darussalam does not conduct substantive examination of applications and therefore
does not require the submission of undisclosed text or other data.  Hence there is no specific
legislation to protect such data against unfair commercial use and disclosure.
EUROPEAN UNION ADDITIONAL QUESTIONS
Brunei Darussalam has stated in the Government Report (para. 56) that "the Government is
committed to strengthening the private sector through, among others, the reduction and simplification
of policies and procedures that have a bearing on private enterprise, and the provision of incentivesand first class infrastructure".
To what extent does this commitment extend to the area of Trade Facilitation and to the reduction and
simplification of import/export formalities and proced ures?  We would be interested to hear of any
efforts being made, difficulties encountered, and needs in terms of technical assistance to support
Trade Facilitation.  We would also like to know wh ether Brunei Darussalam shares our view that this
issue should be addressed in future negotiations in the WTO, that there should be a strong
developmental component and that capacity  building will need to be increased.
Brunei Darussalam is pleased to hear that the EU is offering technical assistance in the area of
Trade Facilitation and we would like to hold fu rther discussions with the EU on this matter.
In the field of Intellectual Property rights, the European Commission sent a signed Financing
Agreement to the Government of Brunei Darussalam regarding EC-ASEAN co-operation in this area
on 9 October 2000.  Whereas almost all ASEAN members have now signed such an Agreement, we
have not received a signed copy back from Brunei Darussalam yet.  Could you inform us on the state
of play of this matter and indicate when Brunei Darussalam intends to sign the above-mentioned
Financing Agreement?WT/TPR/M/84
Page 25
Brunei Darussalam will be proposing minor amendments to the agreement and will be
seeking approval on this matter from the EU before signing.
JAPAN
Intellectual Property Rights
(p. 7, para. 23)
Japan appreciates that all the relevant laws for the protection of intellectual property rights have
been enacted.  However, pirated editions of CD and VCD (Video CD) still seem to be sold in Brunei.
Japan requests Brunei to insist upon a strict implementation of its laws against such pirated products.
Please provide Brunei's comment in this respect?
Brunei Darussalam applies a third party enforcement mechanism by which action on the part
of the authorities is only taken upon receiving complaints of infringements from the right holder(s) or
exclusive licensees.
Brunei Darussalam considers the protection of IPR an important issue as evidenced by our
efforts in complying with our in ternational obligations in this regard.  Towards this end, the
authorities concerned will take the necessary actions as provided under the new legislation.
Question on the Report by the Secretariat (WT/TPR/S/84)
II. Trade and Investment Policy Regime(5) Foreign Investment Regime
Investment
(p. 28, para. 39)
According to the Report, the Brunei Darussal am Economic Council recommended an investment
promotion drive to encourage further investment.  Please explain in detail the current status of
implementation of the recommenda tions made by the Council.
Please refer to response to Questions by the USA on Chapter II (5)(i) para. 39.
III. Trade Policies and Practices by Measure
(2) Measures affecting imports
Tariffs
(p. 39, para. 25)
Does Brunei plan to participate in the WTO Agr eement on Information Technology Products (ITA) in
the future?
Brunei Darussalam will be looking into this in the future market access negotiations.WT/TPR/M/84
Page 26
(p. 39, para. 27)
According to the Report, there remains a significant difference between the bound and applied tariff
rates.  Please explain Brunei's plan to reduce the bound tariff.
Applied tariffs have been eliminated or reduced on 1,344 tariff lines since Brunei Darussalam
joined the WTO.
Brunei Darussalam will increase the scope and depth of its tariff bindings in the new round of
market access negotiations.
IV. Trade Policies by Sector
(5) Services
Banks
(p. 83, para. 56)
According to the Report, the number of banks operating in Brunei is considered to be large relative to
the size of the market and population.  Furthermore, the Sultan may refuse to grant a licence without
giving a reason under the Banking Act.  Japan requests Brunei to make the procedure clear when
granting the licence.  Please provide us with Brunei's comment in this respect.
Response will be submitted at a later date after further clarification from our relevant
authorities.
Japan's requests on Brunei's economic and trade systems
Japan would like to make some requests concerning Brunei's economic and trade systems, thought
they are not directly related to the Reports.
Japan requests Brunei to improve the following opaque and arbitrary domestic systems:
• Lack of information on economic data including the national budget, which makes it
difficult for us to know the present economic situation of Brunei;
• Lack of clarity concerning domestic systems and their implementations.  For
example, domestic systems are changed without clear notification announced to thepublic, or due to a sudden change of policy, some imports are not allowed;
• Difficulty in finding the right ministry which deals with individual trading goods.  As
there is no clear demarcation in the Government, applications for governmentalpermission sometimes float without having a clear destination;  and
• Lack of consistency in treatment.  This gives us an impression of arbitrary
implementation of domestic sy stem.  For example, the requested period of time, as
well as the necessary documents required for granting a permission vary depending
on each clerk.
Brunei Darussalam's trade and investment regimes are transparent, however, should there be
any investors from Japan and other countries who have concerns, Brunei Darussalam would be
pleased to address their concerns directly.WT/TPR/M/84
Page 27
20% duty is imposed on the spare parts of automobiles when the importers are companies, although
0% is imposed when the importers are individuals.  As a result there are some cases in which spare
parts of automobiles are imported by individuals in order to benefit from duty-free and are then sold
in the Brunei market.  Japan requests Brunei to  allow equal treatment between companies and
individual persons.
Imports by individuals are subject to the same duty as imports by companies.
There are some cases where projects ordered by the Government or companies owned by Brunei's
royal family were not paid for.  Even in such cases, companies cannot go to court, since Brunei's
domestic system does not allow legal proceedi ngs against Brunei's royal family and government.
Japan considers such a system to be a big problem.
None.
Japan asks Brunei to consider measures that encourage foreign companies to expand their trade,
such as establishing bonded areas.
Response will be submitted at a later date after further clarification from our relevant
authorities.
In general, foreign companies have to launch governmental projects 1 or 2 weeks after they obtain the
authorization from the Government in order to  implement such projects.  On the other hand,
application for a working permit cannot be accepted at all, even if provisionally, unless the project
has been formally approved.  This prevents co mpanies from the smooth employment of foreign
workers.  Japan requests Brunei to allow flexibility in this respect.
As this is a non-trade issue, this matter should be directed to the Labour Department in Brunei
Darussalam .
THE UNITED STATES
Report by the Secretariat
(1) SUMMARY OBSERVATIONS
(3) Trade and Trade-Related Reforms
(ii) Non-tariff measures
Para. 12
Could Brunei please explain the system they used for determining the annual ceiling on meat imports,
and how they determine what is "exce ss supply" for the local market?
There is no ceiling for imports of meat and poultry as long as they are compliant with our
'halal' criteria.WT/TPR/M/84
Page 28
(4) Other Measures Affecting Trade
Para. 17
Can you please provide further information on your governments holding company, Semaun
Holdings?  What are the priority sectors in which investments through the holding company are
made?  Are products which are exported considered priority sectors, and do they receive special
investments?  Do concerns linked to Semaun Holdings enjoy beneficial treatment versus completely
private sector firms, or get preference for government contracts/procurement?
Semaun Holdings is a private limited company wholly owned by His Majesty's Government.
Its mission is to spearhead industrial and commerci al development through direct investment in key
industrial sectors in the interest of Brunei Darussalam.  Being incorporated under the Companies Act,
it complies with all legal requirements and is run on the principles of viability and profitability.
Semaun Holdings focuses its efforts on the following areas:
• 'halal' food;
• biotechnology;
• pharmaceutical products;
• integrated fisheries projects;
• hi-tech agro industries;
• Information and Communications Technology;
• Development of the Muara Bay Project;  and
• silica-based products and tourism.
Para. 20It’s noted that the retail price of petrol has been frozen since 1978 and the difference between the
price charged is subsidized by the Government.  Does this subsidy apply across the board to all
domestic sectors including corporate and personal sectors?
This retail price of petrol is available to all consumers in Brunei.
CHAPTER II: TRADE AND INVESTMENT POLICY REGIME
(2) DEVELOPMENT AND ADMINISTRATION OF TRADE POLICY
(ii) Main trade-related laws
Para. 14
The Secretariat’s report notes that international treaties and agreements, once ratified by the
Government of Brunei must be adopted through enabling legislation in order to carry the force of law
in Brunei.  Brunei recently passed legislation on intellectual property rights to comply with its TRIPS
obligation and has legislation pending to do the sa me in regard to the Customs Valuation Agreement.
Are there plans to prepare legislation to cover other WTO provisions?
Brunei Darussalam is now in the process of incorporating the WTO Agreements into national
legislation.WT/TPR/M/84
Page 29
Despite the scope and complexity of the work involved, and the heavy burdens placed on its
scarce human resources, Brunei Darussalam is  working to ensure full compliance with its
commitments.
(3) TRADE AND INVESTMENT POLICY OBJECTIVES
The Secretariat’s report notes that Brunei believes strongly that its economy will benefit from further
multilateral trade liberalization.  In what areas does Brunei place the highest priority for further
multilateral trade liberalization?
Brunei Darussalam attaches priority to market access for non-agricultural products and
services (in particular air transport services).
(4) TRADE AGREEMENTS AND ARRANGEMENTS
(i) Multilateral agreements
Para. 21
The Secretariat’s report notes that in WTO bodies Brunei has referred frequently to the difficulties
experienced by developing countries in implemen ting the WTO agreements and has called for further
technical assistance to be provided.  In what areas does Brunei think more technical assistance needs
to be provided?
Brunei Darussalam has worked to ensure compliance with its commitments, despite the scope
and complexity of the work involved.  Nevertheless , there is a need for extensive training to deepen
specialized knowledge in several areas, as well as in drafting legislation.  We would also welcome
technical cooperation in the expansion of our negotiating capacities.
(ii) Regional Agreements
Para. 29
What type of economic cooperation is taking place among Brunei and the other ASEAN member
states on customs procedures, intellectual property rights, standards and conformance, andinvestment, as well as sectoral liberalization?
The 4th ASEAN Informal Summit in Nov 2000 signed the e-ASEAN Framework Agreement
that establishes a FTA for goods, services and investments for the info-com industries.  Please refer to
the ASEAN Website (www.aseansec.org) for info rmation on other areas of economic cooperation.
(5) FOREIGN INVESTMENT REGIME
(i) Overview
Para. 39
The Secretariat’s report notes that despite the tax incentives offered, the authorities' degree of
discretion in approving foreign investment projects may be a disincentive to foreign investors.  What
steps are being taken to make the procedures, time limits and requirements clearer?
Brunei Darussalam is currently developing an Industrial Co-ordination Act that will facilitate
better coordination, especially of licensing and indu strial building approval.  In the meantime, theWT/TPR/M/84
Page 30
current Investment Incentive Act is in the process of revision to widen its scope beyond pioneer
manufacturing industries, whilst the existing Brunei Economic Development Board Act is being
revised to strengthen its powers for the promotion of  FDI, development of joint ventures in strategic
sectors and the provision of efficient services to investors.
(ii) Legislative framework and investment procedures
Para. 40
It is obvious that many infrastructure, investment, financial, and training incentives are offered to
specific industries in Brunei.  Can you please prov ide further information on the aid that is available
to specific industries?  Is this aid more preferentially granted to export industries?  Is export ability
or intention considered in the decision-making process before aid is granted?  Does the fact that
much of this aid is only available for local producers mean that only those producers which market
their products locally are considered for aid?  How is marketing aid provided by the Government?Does marketing aid include aid for participation in international trade shows?  Does marketing aid
include providing aid for export-marketing activities?  How is assistance for location provided?
Please refer to attached annex on Laws of Brunei Darussalam pertaining to Investment
Policies and Measures.
Para. 43Can you please provide further information on th e investment promotion drive recommended by the
Brunei Darussalam Economic Council in its 1999 report?  Have any steps recommended been carried
out by the Government?  Is there any intention to do so?  Have firmer policies and programmes
begun as a result of this report?
The Investment Incentive Act and The Economic Development Board Act has been reviewed
in order to make it more predictable and easier in promoting investment in Brunei Darussalam.
Besides these, new legislation in the form of new Industrial Coordination Act will make enable bettercoordination in industrial activities.
For the Brunei International Financial Centre, several legislations have been enacted which is
the International Limited Partnerships Regulations, International Banking Regulations, International
Business Companies regulation.
(iii) Incentives
Para. 44
Can you please provide additional information on the Pioneer Status Programme?  It is unclear
exactly who is eligible for this programme.  Are all industries eligible to receive preferential
incentives under this programme?  What qualifies a company to receive a Pioneer Certificate?  Since
companies, once declared to have 'Pioneer Status' will always be considered to have that status, isthere a chance that the aid provided under this programme to these corporations will ever be phased
out?  It seems that one aspect of this programme has a direct focus on exports.  How is aid under this
programme used to ensure export growth?  What industries are targeted for export growth under this
programme?
For the Pioneer Status programme, under what ci rcumstances will the exemption from corporate
income tax be extended for an additional three years?  What criteria must be met for this extension to
occur?WT/TPR/M/84
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For aid under the Investment Incentives Act, which provides tax incentives for the expansion of
enterprises already established in Brunei if the expansion is judged to be beneficial to Brunei and inthe public interest, can you please indicate whether this aid is preferentially granted to industries or
companies which export their products?
Please refer to attached Annex on Laws of Brunei Darussalam pertaining to Investment
Policies and Measures.
CHAPTER III.  TRADE POLICIES BY MEASURE
(I) OVERVIEW
Para. 1
The Secretariat’s report notes that policies and practices are subject to a certain administrative
discretion, detracting from transparency and this may be in part because, by and large, WTO
agreements are seemingly applied in good faith or on a "best-efforts" basis with domestic legislation
usually not amended to bring it into conformity with WTO Agreements.  What is the Government
planning to do to increase transparency and to bring domestic legislation into conformity with WTO
agreements?
Brunei Darussalam is now in the process of incorporating the WTO Agreements into national
legislation.
Despite the scope and complexity of the work involved, and the heavy burdens placed on its
scarce human resources, Brunei Darussalam is  working to ensure full compliance with its
commitments.
Para. 3
Could Brunei give more details on how they handle rice imports, and also on their system for setting
price controls on rice?
Brunei Darussalam import rice from Thailand on a purely commercial and Government-to-
Government basis in order to address our food security concerns.  Brunei Darussalam does not have
any restrictions for rice to be imported from other countries.
As part of the food security concerns, prices of rice are determined on the basis of
affordability of the population.  The same prices apply to everyone.
(2) MEASURES DIRECTLY AFFECTING IMPORTS
(iii) Customs valuation and rules of origin
(a) Customs valuation
Para. 13
The Secretariat’s Report notes that according to the authorities, passage of the legislation on customs
valuation has been unavoidably delayed and is expected to be gazetted and implemented fully by mid2001.  Will the regulations be gazetted by July?
The Customs Valuation Order will come into force by 1 September 2001.WT/TPR/M/84
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(v) Tariff bindings
The Secretariat’s Report notes that there remains a significant difference between the bound average
(24.8%) and Brunei’s current applied MFN tariff, which averaged 3.1% in 2000.
This difference lends uncertainty to economic agents operating in Brunei by providing the
Government with scope to raise tariff rates of products within their corresponding bound rates.  Is the
Government considering closing the wide margin between applied and bound rates, which would
further increase the predictability of market access conditions?
Applied tariffs have been eliminated or reduced on 1,344 tariff lines since Brunei Darussalam
joined the WTO.
Brunei Darussalam will increase the scope and depth of its tariff bindings in the new round of
market access negotiations.
(3) MEASURES DIRECTLY AFFECTING EXPORT
(iv) Duty and tax concessions
(b) Other tax concessions and subsidies
Para. 67
Many of the programmes mentioned throughout the report seem to indicate that they are aimed at
promoting the production of Brunei products for exp ort.  What are the Government’s plans for
phasing out all export subsidy programmes?  For further understanding by members, it would be
useful if the following programmes would be fully notified to the WTO Subsidies Committee:
• Investment Incentive Act;
• Enterprise Facilitation Scheme;
• Working Capital Credit Fund;
• General infrastructure development programmes;
• Infrastructure development aid for the hi-tech industrial park;
• Programmes under the National Development Plan, including investment promotion
in particular targeted sectors through tax and non-tax incentives;
• Investments in priority sectors by Semaun Holdings;
• End product subsidy scheme for rice production;
• Programmes administered by the Economic Development Board;  and
• Pioneer Status programme, including cor porate tax exemptions, tax rebates, and
other available aid under this programme.
The objective of Brunei's trade and industrial policies is to facilitate the development of
non-traditional export industries.
The Investment Incentive Act is in the process of revision to widen its scope, whilst the
Enterprise Facilitation Scheme is aimed at increasing production capacity and the marketing and
management effectiveness of local small and medium enterprises.  The Economic Development BoardWT/TPR/M/84
Page 33
Act is being revised to strengthen its powers for th e promotion of FDI, development of joint ventures
in strategic sectors and the provision of efficient services to investors.
Semaun Holdings is a private limited company wholly owned by His Majesty's Government.
Its mission is to spearhead industrial and commerci al development through direct investment in key
industrial sectors in the interest of Brunei Darussalam.  Being incorporated under the Companies Act,
it complies with all legal requirements and is run on the principles of viability and profitability.
(d) Export Processing Zones,
Para. 69
Can you please provide more detailed informatio n on the Muara Free Trade Zone, including who is
eligible for participation in the Export Zone?  What benefits are available to companies producing in
the Export Zone?
The authorities intend to develop Muara as a major regional trans-shipment port.  For this
purpose, the Muara Export Zone has been created; around 70 000 m square of warehousing facilities
are leased to the private sector at concessional rates of up to 40% of the normal rate of B$1 per square
foot per month.
(vi) Other Export Assistance
Para. 71
What other types of assistance does the Government of Brunei offer for export finance, insurance, and
guarantees, if any, or on export promotion and marketing assistance?
There are no programmes on export finance, insurance and guarantees.  Assistance on export
promotion and marketing assistance is currently undertaken on a ad-hoc basis and in conjunction with
international and regional agencies.
(4) MEASURES AFFECTING PRODUCTION AND TRADE
(ii) Incentives(a) Tax Incentives
Can you please provide information on the depreciation (wear and tear) allowances provided to
companies?  Is this allowance availabl e to all enterprises in all industries?
Response will be submitted at a later date after further clarification from our relevant
authorities.
(b) Subsidies
Para. 83
The last subsidies notifications that Brunei submitted to the WTO were G/SCM/N/3/BRN and
G/SCM/N/16/BRN, dated November 1996.  For the sake of transparency, when will Brunei be
submitting its updating notifications for 1997, 1999 and 2000, as well as its new and full notificationfor 1998?WT/TPR/M/84
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Despite the scope and complexity of the work involved, and the heavy burdens placed on its
scarce human resources, Brunei Darussalam is  working to ensure full compliance with its
commitments, including notification requirements.
Para. 84
Can you please provide information on the subsidies provided for agricultural inputs and for services
such as water, energy, and telecommunications?  In addition, can you please explain who is eligible
to receive subsidies for housing, education, and medical care?
In accordance with the long-term strategy for sustainable growth, direct and indirect subsidies
will be gradually removed.
(d) Other assistance
Small and Medium-Sized Enterprises
Para. 88
As part of its efforts to increase private sector participation in the economy, the Government has been
encouraging the development of small and medium-siz e enterprises (SMEs).  Can you please provide
more information on what type of assistance is being provided to them?
Under the Working Capital Credit Fund, the Gove rnment provides a guarantee to the value of
75% of the facility and participating banks provide the remaining 25%.  The Enterprise FacilitationScheme is aimed at increasing production capacity and the marketing and management effectiveness
of local small and medium enterprises.  A micro-credit scheme provides a collateral-free loan through
local banks, and this is complemented by technology and entrepreneurship training programmes to
upgrade the business and management skills of micro-entrepreneurs.
(v) Intellectual Property Rights
Para. 99
The Secretariat’s report states all Brunei’s TRIPS-related legislation should be in place during the
first quarter of 2001.  Is all the legislation now in place?  When will it be notified to the WTO?
All the TRIPS-related legislation (Copyright, Layout Design, Industrial Design, Trademarks)
is in place except for the new Patent legislation, which is in the final stages of completion as the
negotiations with regards to fees of foreign patent offices are still ongoing.  Notification will be
submitted once all the legislations are in place.
Para. 112
The Secretariat’s report notes that the Government of Brunei has reported an increase in enforcement
measures, especially on the sale of pirated good, since May 2000.  Could the Government provide
further information and data  on enforcement actions?
The coming into force of Brunei Darussalam's new IPR Legislations, has naturally resulted in
an increase in the enforcement measures available.  As this legislation is relatively recent, no data on
enforcement actions is currently available.  Howeve r, legal action in the first two cases under the new
Copyrights Order, is currently being undertaken by the Public Prosecutor.WT/TPR/M/84
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IV. TRADE POLICIES BY SECTOR
(1) INTRODUCTION
The Secretariat’s report notes that in non financial services there appears to be very little private
sector involvement and it is not clear to what extent Government incentives have attracted FDI
suggesting a greater role for transparency in market access rules rather than incentives.  What steps
is the Government considering to improve predictability by making further commitments under the
GATS and increasing the transparency of its legislation and regulations?
In accordance with Article XIX of the GATS, Br unei Darussalam will be participating in the
market access negotiations of services.
(2) AGRICULTURE FORESTRY AND FISHING
(i) Agriculture
Para. 9
Could Brunei give more details on the Government to government contract on rice imports?
The Secretariat’s report notes that imports of beef and poultry are subject to a "food balancing"
requirement, whereby the volume of required imports  is determined on the basis of local demand for
the products and local production in Brunei.  Could Brunei please explain how this "food balancing"
requirement works?
As this is a contract between Brunei Darussalam and the Kingdom of Thailand, the details are
confidential in nature.  However, there are no restrictions on the import of rice from other countries.
There are no import quotas in Brunei Darussalam.  The importation of these products need to
comply with 'halal' requirements.
(ii) Policy Framework
The Secretariat’s report notes that Brunei has not notified its Aggregate Measurement of Support
(AMS) to the WTO since 1995.  Is the Government planning to update this notification?
Brunei Darussalam has worked to ensure compliance with its commitments, despite the scope
and complexity of the work involved.  Nevertheless, there is a need for extensive training to deepen
specialized knowledge in several areas.  We w ould welcome technical cooperation in this regard.
(4) CONSTRUCTION AND MANUFACTURING
(ii) Manufacturing
Para. 34
The Secretariat’s report notes that Brunei has been trying to diversity its economic base by
encouraging manufacturing.  What is the Govern ment doing to ensure reasonable conditions for
workers in the manufacturing sector as it is expanded?
In order to ensure good working conditions for workers, the Labour Department will only
approve the intake of workers from abroad if the employers provide suitable accommodation andWT/TPR/M/84
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sufficient funds for repatriation.  The Labour Department will also constantly monitor employer-
employee relations to prevent any breach of industrial peace.
(5) SERVICES
(i) Overview
Para. 45
We note that the Government intends to transform Brunei into a Service Hub for Trade and Tourism
(SHuTT) by 2003.  Does Brunei plan to liberalize any of the sectors promoted under the SHuTTprogramme as a way to encourage economic growth?
The SHuTT programme is a vision to make Brune i as a Services Hub for Trade and Tourism
in the sub-region of Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area or BIMP-
EAGA.  The objective is to promote activities in the following areas:  Import and Export through
Brunei Darussalam;  Travel to and Through Brunei Darussalam;  Do Business and in and throughBrunei Darussalam;  and Communicate from and th rough Brunei Darussalam.  Privatization and
liberalization of relevant sectors in support of this vision are part of the whole exercise.  In the air
transportation sector for instance, Brunei Darussalam has reached an agreement in principle with four
countries on the Multilateral Agreement on the Liberalization of International Air Transportation.
The Multilateral Agreement would provide looser air transportation arrangements between the fivecountries in allowing to operate without restrictions on the frequency of the flights, the flight routes,
aircraft types allowed and the cost of the flights.
(ii) Commitments under the GATS
Para. 47
We welcome Brunei's commitments on business services, communication services, financial services,
and transport services.  Is Brunei planning to schedule additional commitments in the other 8 services
categories and improve existing commitments to kee p pace with ongoing reform and liberalization in
other member countries?
In accordance with Article XIX of the GATS, Br unei Darussalam will be participating in the
market access negotiations of services.
Para. 48
In Brunei’s horizontal commitments, market access for mode 3 was left unbound for measures
relating to foreign equity in existing firms or firms that wish to set up a commercial presence in
Brunei.  Please describe Brunei’s current restri ctions toward foreign investment in such firms.
A local equity requirement of not less than 30% applies to joint ventures in agriculture,
fisheries and food processing, in cases where government facilities are availed of.
Para. 49The Secretariat's report notes that in its Article II (MFN) exemptions, Brunei lists all future
liberalization with regard to foreign equity participation as being subject to discretionary changes
and dependent upon Brunei’s development requirements.  Is Brunei planning to reduce its MFN
exemptions in order to encourage its development through foreign investment?WT/TPR/M/84
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Brunei Darussalam's MFN exemptions have not been a deterrent to foreign investment.
Nonetheless, we will be reviewing the MFN Exemptions during the course of the services
negotiations.
Brunei maintains an MFN exemption outlining a pref erence for workers from traditional sources.
Please describe the scope and rationale of this requirement.  Has Brunei re-evaluated its labour
requirements since it took this exemption?  Brunei also maintains sectoral exemptions on legal
services, banking and securities, reinsurance and retrocession, and radio and television services.Please describe the scope and rationale of these requirements.  Has Brunei considered eliminating
any of these exemptions?
Brunei Darussalam sources its labour supply from neighbouring countries in the region so as
to maintain social cohesion.
(iii) Financial Services
(a) Overview
The Secretariat's report notes that progress to make Brunei a regional financial center has been slow
and much remains to be done in order to improve transparency in financial services.  What progress
is being made to adopt international accounting standards?
(c) Insurance
Policy
We welcome the opportunity to review Brunei’s new insurance legislation.  Please provide more
information on this new law.  What is the time frame for passage of this legislation?  For
implementation?
Para. 66.
Currently, applications for registration by insurance companies are examined on a case-by-case
basis, subject to certain criteria.  Is the application process transparent?  How will the registrationprocess change under the new legislation?  Why have no new insurance companies been registered
since 1984?
Para. 67.
Will Brunei still require security deposits for insurance firms under the new legislation?
(Questions on Financial Services)  Response will be submitted at a later date after further
clarification from our relevant authorities.
(iv) Telecommunication Services
(a) Structure
The Secretariat report notes that telecommunications is dominated by the public sector with the
Government department Jabatan Telecom Brunei (J TB) providing all fixed line telecommunication
services and DSTCom, also currently owned by the Government providing mobile services.  Is the
Government considering reducing the current period of exclusivity granted until 2010 given to these
two current operators?WT/TPR/M/84
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The period of exclusivity for local public switched voice telephone services will be extended
for up to 10 years after the privatization of JTB.  The Government will conduct a review of policywith respect to whether to permit additional suppliers of such services upon the expiry of this period.
A new law called "Telecommunication Successor Company Order" has just been finalized
and approved which when enacted will enable JTB’s staff, asset and liabilities to be transferred to a
new company.  The date of enactment could be as early as this year.  After the completion of this
process, the Government will review the competition policy by assessing the competitiveness of JTB,the industry as a whole and the latest trend in the fast-changing telecommunications sector and to see
whether liberalization can be expedited for the interests of consumers and the industry itself.
As for international public switched voice te lephone services, the Government is now in the
process of formulating a new policy.  This is in response to new telecommunication development such
as the Voice Over IP service or VoIP and call-back services which bypasses the traditionaltelecommunications network.
As for the provision of mobile telecommunications services, the Government has recently
announced that it would award a second mobile  licence in Brunei Darussalam. Details on the
mechanism of award of the licence will be made available by the Government this year.  It is very
likely that the Government will not dictate which technology to use.  If GSM is the preferred choiceof technology by the second licensee, exclusivity given to the current monopoly provider will have to
be shortened to coincide with the date of award of the second licence.
The issue on 3G Licensing is also being separately considered.
(b) Policy framework
Para. 75
Despite its advanced economic status, Brunei has relatively weak Telecom trade commitments in the
GATS, which include broad sectors subject to exclusive supply by the Government-controlledcompany JTB.  (E.g. local switched service and international service offered on a commercial
presence basis.  What plans does Brunei have to:  (1) liberalize these services now subject to JTB
exclusivity?  (2) bind such liberalization in the WTO in the ongoing services round? and (3) privatize
JTB and separate it from the ministry?
The Government will consider the issue on binding our liberalization plans after reviewing
our policy.  Answer to rest of the questions is as above.
Brunei offered access to mobile service but specified two standards for such services:  GSM and
AMPS.  Is there any basis for continuing this technology limitation?  Is Brunei considering a more
technology-neutral approach to licensing, particular ly for new mobile services, that would permit
operators to chose which technology they use?  If not, why not?
As above.
(vi) Tourism
(b) Policy
The Secretariat’s report notes that Brunei is trying to develop its tourism industry.  At the same time
Brunei made no commitments under the GATS in tourism services.  Such commitments would aidWT/TPR/M/84
Page 39
Brunei in attracting foreign investment in the sect or.  Is the Government considering making such
commitments?
Do foreign firms participate in the tourism sector in Brunei?  Are foreign firms eligible to receive
licenses to provide such services?
The services sector is an area of focus in efforts to diversify the economy and the Government
will thus be formulating a services sector policy.
In accordance with Article XIX of the GATS, Br unei Darussalam will be participating in the
market access negotiations of services. Nonetheless, the tourism sector is open to foreign investment.
INDIA
Para. 3  of the Summary Observations in the Secretariat Report notes that Petroleum's large share of
GDP has become a concern in recent years mainly due to fluctuating international prices and the
prospect of an eventual depletion of proven petr oleum reserves in 20-25 years.  The same para.
further notes that the Government has been enco uraging economic diversification and more private
sector participation.  Further, para. 19  of the Summary Observations refer to the Seventh National
Development Plan document to indicate that privatization would be pursued only after a careful
consideration of any negative effects, including on employment and prices, even though the
authorities state that privatization would top the agenda in the Eighth Plan.
Will the delegation of Brunei Darussalam comment on these observations?  We are also interested to
know details of the diversification programme.
Whilst privatization is one of the main priorities of the Government, the Government
continues to regard careful planning and consideration as a mandatory prerequisite not only for
privatization but also for all policy decisions.  This is clearly reflected in the progressive nature of the
national development plans, which clearly make planning, and consideration part of the preparation
for subsequent development plans.
The diversification programme involves the creation of a more business friendly and
predictable environment.  As stated in the Government Report, efforts include the creation of a better
legislative environment for businesses and investors.  The investment regime has undergone
substantial revision and will continue to be reviewed on regular basis.  The existing Investment
Incentives Act and the Economic Development Board (EDB) Act have been reviewed and revised andawait implementation. A new legislation in the form of an Industrial Coordination Act is also awaiting
approval, which will enable better coordination and facilitation of Industrial activities.  We will
continue to be receptive to the needs of both the domestic and international private sector
communities.
Para. 4  of the Summary Observations states that as a consequence of falling international prices of
petroleum and given the tax structure, the tax revenue fluctuates leading to a "chronic budget deficit
in recent years".  It therefore suggests that "in th e medium to long run, there would be a need for tax
reform to broaden the revenue base, including through the possible introduction of sales taxes".
We would request the delegation of Brunei Darussalam to comment on these observations.
We will consider the Secretariats comments.  We are of course aware that widening of the
taxation base is one of the options the Government has to broaden its revenue base.WT/TPR/M/84
Page 40
Currently Review & discussing issue.
Para. 58  of the Government Report notes that "despite the scope and complexity of the work involved,
and the heavy burdens placed on its scarce human resources, Brunei Darussalam has worked to
ensure compliance with its commitments".  Para. 5  of the Secretariat's Summary Observations notes
that "to date, it appears that, other than legislat ion on intellectual property rights (including for
copyright, trade marks and industrial designs), no changes relating to provisions have been made to
national laws.  Instead, WTO provisions appear to be implemented in "good faith" or in a "best
efforts" basis".  In para. 33  thereof, the Secretariat further observes that "while Brunei has ratified
the WTO Agreements, it has yet to implement legislation to bring local laws into conformity with its
international obligations".
We note that Brunei Darussalam has been taking utmost efforts to fulfil its obligations.  We would
request the delegation of Brunei Darussalam to comment on these observations.
Brunei Darussalam is now in the process of incorporating the WTO Agreements into national
legislation.
Despite the scope and complexity of the work involved, and the heavy burdens placed on its
scarce human resources, Brunei Darussalam is  working to ensure full compliance with its
commitments.
Para. 9  of the Summary Observations notes that "tariff escalation is pronounced in wood and
furniture, fabricated metal products and machinery, and chemicals, providing higher effective
protection to these industries;  by contrast, for wood and furniture, the tariff on unprocessed and
semi-processed products is higher than for fully processed products suggesting greater protection of
raw and intermediate goods than for finished products".
We would request the delegation of Brunei Darussalam to comment on these observations.
Brunei Darussalam does not have any domestic industries for fabricated metal products and
machinery and therefore there is effectively no protectionism.  The tariff rate for chemical sis 0%.
The export of timber and logs from Brunei Darussalam is prohibited, in line with our 'reduce-
cut' policy, with the ultimate objective for no-cut policy. In order to develop the downstream
activities, we are reviewing the tariffs of wood and log.
__________