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WTO TRADE POLICY REVIEW OF Thank you, Mr. Chairman. The United States welcomes the delegation from Brunei Darussalam for Brunei's first Trade Policy Review under the WTO. We appreciate the Secretariat's useful report on Brunei's trade policy regime and also commend the Government for it's report and their statement today. These reports represent an important analysis of Brunei's commercial policies, laws, regulations and practices. We have developed a number of questions which we look forward to discussing with the Government of Brunei Bilateral relations between the United States and Brunei are solid and our trade ties have been steadily increasing and broadening. Two-way trade is now more than half a billion dollars a year, with United States imports from Brunei rising to more than 384 million dollars in 2000, while United States exports to Brunei were 156 million dollars. In addition, U.S. imports of manufactured goods from Brunei have increased sharply over the last five-year period totaling180 million dollars in 2000. U.S. investment in Brunei is currently estimated at 140 million dollars. A notable development in our bilateral relationship is expanded cooperation in the aviation sector. In November our two countries, along with three others, signed a multilateral Open Skies agreement which specifically focused on the comprehensive liberalization of aviation services. We hope that cooperation in the aviation sector is indicative of future liberalization. Brunei has one of the highest standards of living among its ASEAN partners. Its petroleum and natural gas wealth have permitted the development of its infrastructure and the maintenance of a liberal exchange system. From 1996 to 1998 these exports leveled off while imports continued to increase, resulting in a worsening of the trade and current account balances. In response, the Government reduced its expenditures and placed increased emphasis on export diversification and promoting increased foreign investment in Brunei. Since 1999 there has been an increase in hydrocarbon exports as well as some efforts at diversification. Further expansion and exploration in the oil and gas sector and increased diversification are both essential to Brunei's development. Brunei is an active supporter and participant in the Asian Pacific Economic Cooperation (APEC) forum and the WTO. We both share the "Bogor goals" of free and open trade and investment in the region. Brunei was APEC's official host in 2000, chairing the ministerial and senior officials processes to a successful outcome at the November ministerial. Brunei's work last year as APEC's host culminated with the launch of a broad-based Action Agenda on the New Economy to ensure that APEC members use advances in information technology to boost productivity and stimulate economic growth in the region. On-Going Matters of Concern Brunei's policies are usually directed towards liberalized trade. The Government recognizes the advantages of letting the market allocate resources and determine economic decisions. Brunei generally has low applied tariffs, averaging 3.1 percent in 2000, with four-fifths of its tariff lines duty free. However, some of Brunei's practices reduce the positive impact of open trade. The Government tends to be dominant in most sectors
of the economy and has a direct stake in many industrial sectors.
The Government also has a strong presence in transport and communication
services and energy generation and distribution. The Secretariat report
notes that "the extent of involvement in the economy is pervasive
and appears to be a disincentive to private investment." While
the Government recognizes that it needs to undertake privatization
and regulatory reform, such actions have to be speeded up. Brunei has made changes to its intellectual property rights laws in part because of its belief that infringements are putting the country's economic growth at risk. We encourage Brunei to take enforcement actions and to impose deterrent penalties for IPR violations. Brunei has also been in the process of making changes to its customs system in order to facilitate trade. Passage of legislation related to the Customs Valuation Agreements has been anticipated. We encourage Brunei to publish and implement the new customs system quickly. 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. This suggests that greater transparency in market access rules may better attract foreign investment. We urge the Government to consider improving predictability by making further commitments under the GATS and increasing the transparency of its legislation and regulations. While we welcome Brunei's commitments on business services, communication services, financial services, and transport services, we encourage Brunei to make commitments in the other 8 services categories and improve existing commitments to support the development of the services sector as well as the economy in general. Conclusion Mr. Chairman: Brunei has achieved a high standard of living and yet has recognized that it needs to make changes to maintain it. In recent years it has begun the process of expanding, diversifying and liberalizing its economy. Some of this has already begun to have positive effects, but more needs to be done. We encourage Brunei in continue these actions and plan to maintain a course towards fuller liberalization of its economy. We welcome this opportunity to discuss this review with the delegation from Brunei and other members.
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