Japan, Brunei ink FTA; cut tariffs
Tokyo, June 18:
Japan and Brunei were set to sign a free trade agreement today aimed at cutting tariffs and ensuring a stable supply of natural gas to Japan from the Southeast Asian country.
The world’s second-largest economy has already struck similar pact with Malaysia, Singapore, Thailand, the Philippines, Mexico and Chile. Japan is pursuing additional trade agreements with Vietnam, India and Australia.
Under the deal, Brunei will notify Japan in advance of any measures that would restrict exports of natural gas, according to Satoshi Hamaguchi, an official at the Ministry of Economy, Trade and Industry.
Japan currently gets about 10 per cent of its total natural gas requirements from Brunei. The accord, to be sealed today between prime minister Shinzo Abe and visiting Brunei’s Sultan Hassanal Bolkiah, calls on Brunei to abolish a 20 per cent tariff imposed on automobiles and auto parts from Japan within three years of the implementation of the pact.
Tariffs on electronics and machinery products, currently set at in a range of 5-20 per cent, will be eliminated within five years. In return, Japan will eliminate tariffs on tropical fruits such as mangos and durians immediately after the accord is put into effect. It will also gradually abolish tariffs on imports of other agriculture and forestry products.
Japan exported $93.50 million worth of products to Brunei in 2005, with automobiles and auto parts accounting for 71 per cent of the total, according to Japanese government figures. It imported $2.05 billion worth from Brunei, mostly natural gas and crude.