TRADE POLICY REVIEW OF BRUNEI DARUSSALAM

Statement by Deputy Chief of Mission David Shark
U.S. Permanent Representative to the WTO

Geneva
February 25, 2008

The United States welcomes the delegation of Brunei Darussalam under the leadership of Dato Lim Jock Hoi, Permanent Secretary, Ministry of Foreign Affairs and Trade, and with the participation of Her Royal Highness Princess Muta-Wakillah Bolkiah.  We would like to thank the delegation of Brunei for the informative report it provided to members before this meeting and for its statement today.  In addition, we appreciate the Secretariat Report and the insightful remarks of our discussant, Ambassador Swärd-Capra of Sweden.  They provide a good basis for discussing Brunei’s trade policy at this important juncture, when it is using trade initiatives to help promote its economic growth and diversification efforts.

By many measures, Brunei’s economic performance has been impressive.  Real GDP is picking up, with per capita GDP at more than $30,000, one of the highest levels in Asia.  At the same time, inflation is low, unemployment is low, and Brunei continues to accumulate long-term foreign assets.

The trade relationship between Brunei and the United States continues to grow.  Two-way trade is about half a billion dollars.  In addition to energy, Brunei exports textiles to the United States and it is expanding its exports in new sectors such as seafood.  U.S. exports to Brunei nearly tripled between 2006 and 2007.

As a small country heavily reliant on oil and gas revenue, we commend Brunei for the priority it has placed on diversification, which will help Brunei to ensure its future economic growth and development.  The Secretariat Report notes, however, that Brunei’s progress toward this goal has been relatively slow.  We would welcome any further updates Brunei can provide on the progress it is making toward economic diversification and whether it is considering policy changes to accelerate progress towards this objective.

We also would appreciate any further information Brunei can provide on its efforts to enhance transparency.  As the Secretariat Report notes, there is lack of transparency in some government operations, including the availability of information about foreign investment policies, the procurement and state trading activities of state enterprises, and the coverage and timeliness of financial statistics.  We urge Brunei to enhance transparency and reporting in these areas and to update its WTO notifications on state trading, import licensing, and subsidies.  These steps could go a long way in promoting a greater awareness of Brunei’s policies and enhancing its attractiveness as a trade and investment partner.

Regarding transparency, we appreciate Brunei’s recent notification of its halal requirements, which our agriculture experts are reviewing.  The Ministry of Industry and Primary Resources, in cooperation with the Ministry of Religious Affairs and other authorities, is working to develop a Brunei Halal Brand with the objective of differentiating Brunei’s exports in world markets.  While these efforts are underway, we encourage Brunei to ensure that import requirements are not overly burdensome or more trade restrictive than necessary. We look forward to an update on developments in Brunei’s halal policy.

The United States would like to acknowledge Brunei’s efforts in the area of intellectual property, but we note our concern about the high levels of optical disk piracy and other weaknesses in Brunei’s IPR regime.  A U.S. delegation recently visited Brunei to discuss these concerns and was pleased to learn that we have a common interest in working together on these issues and developing a program through which the United States could support Brunei’s efforts to improve IPR enforcement.  We would welcome an update on any legislative, judicial or enforcement steps the Brunei Government is planning.

We were pleased to learn through the Secretariat Report that Brunei is exploring membership in the WTO Agreement on Government Procurement.  Given the important role played by government entities in Brunei’s economy, participation in that agreement could provide a significant boost to Brunei’s economic growth and diversification efforts.

The United States welcomes Brunei’s commitment to the multilateral trading system and to the success of the Doha Development Agenda.   Brunei’s path toward economic growth and development would be significantly strengthened by the creation of new meaningful trade flows  in industrial goods, services, and agriculture, so it has a major stake in the achievement of an ambitious agreement.  Brunei should consider participation in the ITA, and financial and telecommunications services liberalization, as steps to strengthen its infrastructure for development.

Brunei Darussalam’s commitment to the multilateral trading system is complemented by its bilateral and regional trade agenda, particularly in ASEAN and APEC.  We commend Brunei for its support of the APEC vision of open regionalism and to the target of free and open trade in the entire region by 2020.  Brunei clearly recognizes the benefits of international trade and investment to its economy, and we urge the government to continue to take steps to open Brunei’s market further to foreign trade and investment.

We appreciate the opportunity to participate in this review.  We look forward to your responses to our questions, which reflect the growing interest of the United States in Brunei Darussalam’s economy and our desire to expand our trade relationship further on all fronts – here at the WTO as well as bilaterally and regionally. 

Thank you.