Local biz needs to know more about ASEAN trade agreements
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Outreach programmes for ASEAN economic trade agreements are needed to encourage Bruneian traders.
According to Thomas Koh, secretary-general of the Brunei Freight Forwarders Association, there are ASEAN trade mechanisms in place which will benefit Brunei traders. One such mechanism is ‘Form D’, a mechanism under the ASEAN Trade in Goods Agreement (ATIGA) which allows duty-free importation of ASEAN products.
Koh said previous outreach programmes helped traders understand Form D and they have largely benefitted from the understanding. According to the Ministry of Trade and Foreign Affairs, imports using Form D account for some $447 million from 2008 to 2014.
Koh said what was less known about Form D is its potential to be used in trans-shipment.
“For example, I have a product coming in from Thailand to Brunei. As a trader I want to sell it to Miri. Without the preferential tariff, it would be less profitable for me,” he said.
He said countries like Brunei and Singapore which do not have much in the way of heavy manufacturing industries do not benefit directly from Form D. They can instead take advantage of the so-called ‘Back-to-Back’ Form D.
This means that Brunei can re-export products with preferential ASEAN tariff.
“I’m pushing for more Brunei traders to practise and the relevant authorities to accept it. This is an existing ASEAN agreement that allows us to say, bring in 10 batteries from one ASEAN country and export five out to another and distribute locally,” he said.
Koh believed that knowledge of this is important if Brunei were to become a logistic hub for Borneo Island and the BIMP-EAGA region as a whole.
He said authorities should do more to promote it.
Without clear approval from authorities, Koh said traders will unlikely take risks with using ‘Back-to-Back’ Form D because of getting their cargo stuck or having to pay additional tariffs.
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