WASHINGTON - The
United States and Bahrain announced today the intention to seek to negotiate a
Free Trade Agreement (FTA). This process would be in accordance with the
consultation and notification procedures determined by the Congress under the
Trade Promotion Authority Act of 2002.
announcement is a first step in implementing the President=s announcement
earlier this month about advancing economic reforms in the Middle East and
pursuing the goal of a Middle East Free Trade Area (MEFTA) by 2013," said U.S.
Trade Representative Robert B. Zoellick, who today met with Crown Prince Shaikh
Salman Bin Hamad Al-Khalifa. "The Administration will continue to work closely
with Congress, including with consultation, formal notification, and reporting
procedures, as outlined in the Trade Promotion Authority Act.
FTA could serve as a regional anchor for the Gulf facilitating greater economic
integration and reforms, and leading toward the eventual goal of a Middle East
Free Trade Area. The United States already has free trade agreements with Israel
and Jordan, and we hope to complete the negotiations for an FTA with Morocco by
the end of this year," added Zoellick.
The United States
and Bahrain have decided that it would serve their mutual interests to develop
closer ties through a free trade agreement. The successful conclusion of a
comprehensive U.S.-Bahrain FTA would enhance commercial relations with an
economic leader in the Gulf and set the stage for improving trade relations and
expanding openness with other countries in the region, increasing prosperity,
opportunity, and hope. An FTA with Bahrain will generate export opportunities
for U.S. goods and increase access for U.S. services providers, creating jobs
for U.S. farmers and workers, while supporting Bahrain's economic and political
reforms and building stronger economic ties with the Middle East.
Crown Prince Shaikh Salman discussed the preparatory steps for the FTA
negotiations. Subject to Congressional procedures, the two countries hope to
start formal negotiations at the beginning of next year.
Administration=s intention to seek to negotiate a free trade agreement with
Bahrain reflects the Administration=s strong support for the reforms Bahrain has
undertaken and the benefits that will accrue for both countries from more open
trade. Bahrain currently has low tariffs and a liberal trade regime for
important services sectors, such as banking and insurance, and recently enacted
legislation liberalizing the telecommunications market completely by 2004. The
United States and Bahrain have been engaged in a robust economic dialogue over
the past year under a bilateral Trade and Investment Framework Agreement (TIFA)
to promote closer economic ties, freer trade, greater openness, a stronger
investment climate, and the reform process.
Exports: A comprehensive U.S.-Bahrain FTA will generate export opportunities for
U.S. goods and increase access for U.S. services providers, creating jobs for
U.S. farmers and workers. U.S. goods exports to Bahrain in 2002 totaled $419.2
million, including aircraft, machinery, vehicles, pharmaceutical products, and
toys, games and sports equipment. Agricultural commodities that would benefit
from an FTA include U.S. meats, fruits and vegetables, cereals, and dairy
produce. Bahrain's goods exports to the United States in 2002 totaled $395.1
million, including articles of apparel and clothing accessories, aluminum,
fertilizers, organic chemicals, mineral fuels and oils, plastics, and electrical
Reform and Investment Opportunities: Bahrain is a regional leader in economic
reform and trade liberalization and has undertaken a strong economic reform
program that includes liberalization of the telecommunications market and recent
legislation for transparent government procurement and labor rights.
In addition to
tariff elimination, an FTA with Bahrain would include commitments to increased
access for U.S. firms to Bahrain's services sector. In addition to the
telecommunications sector, there are likely opportunities for U.S. firms in the
financial services, distribution, energy, construction and engineering, health
services, education and training, tourism and travel, and environmental services
The proposed free
trade agreement would support Bahrain's commitment to transparency, openness and
the rule of law, and would include increased protection for intellectual
property and specific provisions to encourage the development of e-commerce. An
FTA would also support Bahrain's efforts on environmental protection and labor,
including the expansion of employment opportunities.
An FTA would be
the capstone on a continuing, mutual effort to bring the U.S. and Bahrain
economically closer together. The U.S. and Bahrain signed a TIFA in 2002, paving
the way for closer economic ties between the two countries, and U.S. investors
continue to benefit from the protections accorded under the U.S.-Bahrain
Bilateral Investment Treaty, in effect since 2001.