Bahrain-US trade doubles over FTA
Manama, November 19, 2013
Bahrain-US trade has doubled since the coming into effect of the free trade agreement (FTA) in 2006, a senior government official said.
Addressing a seminar at the Bahrain Chamber of Commerce and Industry (BCCI) in Sanabis yesterday, Industry and Commerce Minister Dr Hassan Fakhro said bilateral trade has grown from about $1.1 billion in 2006 to about $2bn last year, as Bahrain was given tariff-free access to the world's largest economy, reported the Gulf Daily News, our sister publication.
"As the first country in the GCC to secure an FTA with the US, Bahrain achieved a unique first-foot advantage over other countries in the region, and enhanced its position as the regional financial and commercial centre,” he said.
The minister said through elimination of trade barriers, the FTA has not only promoted open and competitive markets but has also led to creation of new job opportunities.
"The elimination of tariffs allows Bahraini suppliers of goods and services to be more competitive in the US market," he added.
Bahraini goods that qualify under the agreement are exempt from import duty.
Bahraini exporters also have a competitive advantage in the US over competing third country exporters not under the FTA.
Calling on Bahraini small and medium enterprises (SMEs) to move quickly before the advantage is eroded by multi-lateral reduced tariff agreements, the minister said opportunities do not materialise simply from the ratification of the agreement.
"The agreement only creates a legal framework for preferential trade treatment and it is up to the private sector to take full advantage of the opportunities and capture the benefits," he said.
"SMEs may not have the infrastructure, institutional capacity or other resources needed to develop their products, services or export mechanisms to take advantage of the FTA.
"They should look to collaborate with others in the same or similar industry, and indeed even through a sector-specific mechanism, such as a trade group or industry association.
"Companies in Bahrain can expand as they export to the US and the country also benefits from the transfer of new technology and know-how to Bahraini businesses," he added.
The minister said there exists opportunities for collaborative arrangements to attract US investment into Bahrain as the kingdom provides an enabling environment and a stable framework for companies seeking a regional base.
"Opportunities also exist for collaboration with other FTA countries, as the agreement provides for "regional cumulation", thereby allowing an export product to consist of elements from more than one country in order to meet the "Rules of Origin" requirement," Dr Fakhro said.
US Ambassador Thomas Krajeski, who also spoke at the event, said future trade prospects were very bright.
"I expect existing bilateral trade to double in half the time as compared to earlier," he said.
This indicates that the volume of trade is likely to hit $4 billion by 2015-16.
BCCI deputy chairman Ebrahim Zainal and Bahrain SMEs Society president Abdulhasan Al Dairi also spoke.
Deputy assistant US trade representative Dr Christina Sevilla facilitated a workshop that featured examples from Tunisia and El Salvador. The seminar was a collaborative effort of the Industry and Commerce Ministry, Bahrain SMEs Society, US Embassy and the BCCI. – TradeArabia News Service