Brexit to have no significant impact on Brunei economy

|     Azlan Othman     |

THE European Union (EU) remains a leading economic power and open to the world, Non-Resident EU Ambassador to Brunei Darussalam and Indonesia Vincent Guerend said.

“The EU trade policy will not change as a result of UK’s withdrawal from the union,” he assured. “The EU continues to be engaged bilaterally as well as through ASEAN, and the EU continues to pursue plans to launch an ambitious region-to-region free trade agreement (FTA).”

Guerend noted this when speaking about the consequences for EU-Brunei Darussalam ties at a talk titled ‘Brexit and its Consequences for Business in Brunei’ organised by the French Bruneian Business Association (FBBA) at The Rizqun International Hotel yesterday.

The ambassador added that the EU is looking at more region-to-region trade agreements like in ASEAN. He said that the United Kingdom (UK) “remains a very important trade partner for Brunei compared to the rest of the EU nations”, and that “we are here supporting various businesses and the country’s diversification programme and supporting investment into Brunei”.

ASEAN statistics show that as of 2017, EU-ASEAN trade totalled USD261.3 billion, making the EU ASEAN’s fourth-largest trading partner (after other countries within ASEAN (intra ASEAN), the rest of the world, and China).

Non-Resident European Union (EU) Ambassador to Brunei Darussalam and Indonesia Vincent Guerend speaks during the event
British High Commissioner to Brunei Darussalam Richard Lindsay, Executive Commitee members of the French Bruneian Business Association (FBBA) and Vincent Guerend in a group photo. – PHOTOS: AZLAN OTHMAN

The EU is also ASEAN’s second-largest source of net foreign direct investment (FDI) (behind intra ASEAN), with capital inflows totalling USD25,442.6 million.

Guerend pointed out that bilateral trade between the EU and Brunei jumped last year due to an increase in transport equipment trade, contributed largely by Royal Brunei Airlines’ (RB) purchases of several Airbus aircraft. “There is a surge in trade due to the purchase of seven new RB aircraft from Airbus in France. With 740 million euros in total trade, Brunei ranked 122 in the list of EU trade partners,” he said.

As for trade and services, in 2017, the EU exported 485 million euros in services and imported 27 million euros.

“Total trade in services stood at 512 million euros with a surplus of 458 million euros for the EU. As for investment, EU foreign direct investment stocks in Brunei accounted for 1.9 billion euros,” Guerend added.

Brunei’s total imports from the EU (217 million euros), meanwhile, are 10 times that of its exports to the European bloc (18 million euros).

British High Commissioner to Brunei Darussalam Richard Lindsay said that Brexit has no significant impact to Brunei’s economy.

“The majority of Brunei’s trade is in this ASEAN and Asia-Pacific region, and the vast majority of Brunei’s exports in the oil and gas sector do not end up in countries in Europe,” he noted.

“Most of the Sultanate’s manufactured goods and fruit imports come from the Asia Pacific region.”

Lindsay added, “There is no trade agreement between the EU and Brunei Darussalam like the trade agreement the EU has with Japan. As we leave the EU, the trade relationship between the UK and Brunei will not change.

“The opportunity for Brunei is when the UK joins the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade agreement, of which Brunei is one of the founding members. The UK has expressed its interest in joining the CPTPP once its exit from the EU is finalised. Hence, there is a wealth of opportunities to grow mutual trade.”

The UK will officially leave the EU at midnight on March 29.

Members of FBBA and Diplomatic Corps were also present.