While developing nations that highly focus on the production of cheap consumer goods are concerned about the upcoming competition, developed countries may also have potential problems that may result from poor Intellectual Property enforcement systems of neighboring countries. Once this free trade starts kicking in seriously, infringement of IP protection may become a common and beneficial trend for some countries with poor Intellectual Property enforcement system. People and companies of underdeveloped countries can easily access and copy IP protected technology, and thus, may have a negative impact on Intellectual Property protection system.

Lack of national Intellectual Property system can also be barrier to the free trade. One example is the patent protection system in Brunei. At present, Brunei does not have a national patent system. Patent protection is obtained by re-registration of a granted British, European Patent Office (designating UK), Malaysian or Singapore patent. It therefore follows that China patented technology, if not registered in the above-mentioned countries, will not enjoy the patent privileges in Brunei. This lack of Intellectual Property protection may discourage Chinese manufacturers from sharing their China patented technology to the Brunei public.

Therefore, one of the challenges that China and ASEAN countries are facing as a consequence of this free trade agreement lies in creating a policy that would provide a balance between economic efficiency and effective Intellectual Property protection. Intellectual property covers a broad scope of rights that aims to motivate innovation and creation, including exclusive rights that allow owners of intellectual property to reap monopoly profits. In other words, Intellectual Property favors incentives for innovation and creative effort over economic efficiency and distribution of income. On the other hand, free trade favors the latter over the former.

Each country must therefore create an enlightened policy to balance the interest of the public and the innovators. It is important to establish real free trade with a reasonable Intellectual Property system.