Bahrain Free Trade Agreement

Issue 519, June 28, 2006

It still looks like early August 2006 when the new U.S.-Bahrain Free Trade Act will go into effect. The Implementation Agreement was signed by President Bush on January 11, and the Agreement was also approved by the Bahraini Representatives Council. Bahrain must still endorse the Author Intellectual Copyright Laws and the US still needs several weeks to make the final preparations.

This is the fourth and largest of the Middle East Free Trade Agreements. According to a White House press release, the U.S.-Bahrain FTA is a significant step in furthering the President's goal of creating a Middle East Free Trade Area (MEFTA) by 2013. The press release states that through MEFTA, the U.S. seeks to expand trade with and investment in Middle East countries to further their domestic reforms and the rule of law, protect intellectual property, and create a foundation for economic growth and prosperity.

Since the President announced MEFTA in May 2003, the U.S. has completed FTAs with Bahrain, Morocco, Oman; initiated FTA talks with the United Arab Emirates (UAE); assisted in the accession of Saudi Arabia to the WTO; and signed six Trade and Investment Framework Agreements (TIFAs) with Middle East countries, among other initiatives.

The market access commitments in the U.S.-Bahrain FTA would immediately eliminate duties on nearly all current bilateral trade in consumer and industrial products. Bahrain would also provide immediate duty-free access for U.S. agricultural products in 98 percent of its agricultural tariff lines. Under the agreement, both nations would eliminate tariffs on any remaining products within 10 years. The agreement also provides strong protections for intellectual property and one of the highest levels of access for the U.S. services industry in any FTA to date.

In preparation for this event Bahrain is being removed from the member nations of the General System of Preferences (GSP) agreement.

For additional informational please refer to www.bilaterals.org