Bahrain Free Trade Agreement

The United States-Bahrain FTA, which entered into force on January 11, 2006, generates export opportunities for the United States, creating jobs for U.S. farmers and workers. The agreement also supports Bahrain’s economic and political reforms and enhances commercial relations with an economic leader in the Arabian Gulf. On the first day the agreement took effect, 100 percent of the two-way trade in industrial and consumer products began to flow without tariffs. Because of the FTA, U.S. farmers have significantly increased their agricultural exports to Bahrain. In addition, Bahrain opened its services market wider than any previous FTA partner, creating important new opportunities for U.S. financial service providers and companies that offer telecommunications, audiovisual, express delivery, distribution, healthcare, architecture, and engineering services.

The central oversight body for the Agreement is the United States-Bahrain Joint Committee (JC), chaired jointly by the Office of the U.S. Trade Representative and Bahrain’s Ministry of Industry and Commerce.

The second meeting of the JC was held on October 21, 2009. During this meeting officials discussed a broad range of trade issues. In particular, they discussed the considerable efforts during 2009 by both governments to ensure effective implementation of key customs-related aspects of the FTA, including through targeted technical assistance to Bahrain’s customs authorities, as well as trade initiatives by the

Gulf Cooperation Council, of which Bahrain is a member. Officials also signed a Joint Committee Decision on the Government Procurement Annex and a Protocol regarding changes to Annex 3-A of the Agreement related to the Harmonized Commodity Description and Coding System. In addition, the two governments discussed initiatives to monitor implementation and compliance with the labor and environmental obligations in the FTA and additional cooperative efforts related to labor rights and environmental protection.

The discussion on labor issues during the JC meeting built upon a USTR-led mission to Bahrain earlier in the month under the auspices of the FTA labor chapter. During the visit, U.S. government officials from USTR and the Departments of Labor and State held meetings with Bahrain’s Ministry of Labour and Social Affairs as well as with representatives from labor and business groups and other government officials. As part of ongoing labor cooperation and capacity building activities, the U.S. Department of Labor is funding a project implemented by the International Labor Organization to increase the effectiveness of labor inspections by Bahrain’s labor ministry. During the next year, the two governments will continue to hold discussions between their respective experts on labor and environmental issues to ensure effective compliance with FTA obligations. In addition, the two governments will initiate steps to formally establish a Subcommittee on Labor under the Joint Committee of the FTA.

The U.S.-Bahrain FTA also promotes the policy of advancing economic reforms and liberalization in the Middle East. The United States-Bahrain Bilateral Investment Treaty (BIT), which took effect in May 2001, covers investment issues between the two countries.