Debunking rumours, US Deputy Chief of Mission in Bahrain Timothy Pounds has said that the free trade agreement (FTA) between Bahrain and the US does not have an expiry date and is here to stay.

Addressing a gathering of chief executives assembled by the Bahrain Association of Banks at the Gulf Hotel yesterday, Pounds said the US partnered Bahrain on a bilateral trade agreement because the kingdom has been, and continues to be, a leader in economic reform in the GCC, reported the Gulf Daily News, our sister publication.

"The US has FTAs in effect with only 20 countries worldwide and it is a sign of faith in the strength and transparency of a partner country's economy," he said.

"While the benefits of an FTA merit their creation, negotiating an FTA can be a lengthy and tedious process. These extensive efforts are one reason why FTAs do not expire," he explained.

"Exerting this level of national effort would be hard to justify for short-term deals, which is why they do not expire," he added.

According to him, the FTA had improved the already admirable business environment in Bahrain and helped promote opportunities for entrepreneurship in many ways.

"One hundred per cent of bilateral trade in consumer and industrial products became duty-free immediately upon entry into force of the FTA in January 2006," remarked Pounds.

"The agreement has eliminated tariffs, opened service sectors, increased agricultural market access, strengthened transparency measures, and improved customs co-operation," he added.

Pounds said the FTA had produced tangible benefits for both countries, which is reflected in the trade statistics. Bahrain, he stated, was currently its 87th largest goods trading partner with $1.7 billion in total (two-way) goods trade last year.

"US goods exports to Bahrain last year were $1 billion, down 15.9 per cent ($193 million) from 2012, but up 100 per cent from 2003," he noted.

"The US goods trade surplus with Bahrain was $383 million last year, whereas US goods imports from Bahrain totaled $635 million, a 9.4 per cent decrease ($66 million) from 2012, but up 68 per cent from 2003," he added.

The US imports from Bahrain are up 47 per cent from 2005 (pre-FTA).

The five largest import categories last year were: Aluminium ($181 million), woven apparel ($107 million), mineral fuel (oil) ($95 million), fertilisers ($91 million), and miscellaneous textile articles ($64 million)," he said.

"US exports to Bahrain are up 190pc from 2005 (pre-FTA).

"US exports of agricultural products to Bahrain totalled $78m last year.

"Leading categories include: dairy products ($27 million), poultry meat ($8 million), and beef and beef products ($7 million).

"The top export categories were: vehicles ($267 million), special other (low value shipments) ($188 million), machinery ($175 million), electrical machinery ($51 million) and aircraft ($44 million)," he added.

Pounds said many large Bahraini companies had benefited from the FTA. "Notably, GPIC exports half of its output to the US," he stated.

"Although small and medium sized enterprises may not have taken as large an advantage of the export opportunities afforded by the FTA, they have undoubtedly benefited from the multiplier effects of increased trade and investment.

"While the benefits have been vast, great potential still exists and it is up to the entire business community in both countries to innovate ways to benefit," he added.-TradeArabia News Service