Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
101
five import products groups (at HS 2 digit level of aggregation). Brunei mainly exports oil to its
ASEAN partners while having a highly diversified import structure. The large contrast in the
concentration of ASEAN trade of the three countries is also illustrated in Figure 23.
The most significant tariff liberalisation for trade in goods among ASEAN countries (especially
ASEAN-6) occurred in the early 2000s. Cheong (2008) uses 2001-2003 data on trade flows and
preference margin at HS 6-digit level to estimate a gravity equation concluding that AFTA
appears to have had trade-creating effect especially for goods falling under HS chapter 8,
including Machinery, Electrical Products, and Transportation, i.e. industries with complex and
increasingly fragmented production processes). These results are consistent with a hypothesis
of intra-regional trade liberalization in ASEAN leading to further production fragmentation,
finer specialization, and increased intra- and extra-regional trade.
Figure 22: Share of trade with ASEAN: Brunei
Source: Calculations based on Comtrade data
Note: point chart for Brunei due to missing data for a number of years