Manama: With the Tariff Preference Level (TPL), a clause in the Bahrain-US FTA is set to expire by end of next year, over $186million garments sector exports and thousands of jobs are at risk if Bahrain fails to renew TPL ahead of time.
This was the crux of a presentation made by Harinder B.S. Lamba on behalf of the M.R.S. Fashion and Ambattur Garment Industries at the Bahrain International Investment Park (BIIP) on Thursday.
The members of the AmCham Bahrain and media representatives also toured facilities at the BIIP and get on spot briefing on various production sections of the plants by Harinder B.S. Lamba and management of the facilities.
“M.R.S. Fashion and Ambattur Garment Industries have put Bahrain on the fashion map. Their “Made in Bahrain” labels can be found inside leading fashion brands and stores, including Banana Republic, Polo Ralph Lauren, American Eagle, Ann Taylor, JC Penny and Wal-Mart.
The AmCham members consider the tour was a rare opportunity to see two state-of-the-art automated and robotic manufacturing processes and learn how the textile and apparel industry has become the second largest export category representing 27% of exported trade from Bahrain to the U.S. (valued at $186 million for the year ending July 2014), just behind aluminum exports which represent 29%. The Industry employs nearly 1000 Bahrainis and supports an estimated 1,200 ancillary jobs.
“The textile and apparel industry is an FTA success story,” Harinder B.S. Lamba on the sidelines of the event told The24X7News Bahrain (www.twentyfoursevennews.com).
He said that the renewal of TPL was a vital step towards further strengthening the garment sector in line with the Kingdom’s Vision 2030 which put the private sector as an engine of growth.
“The TPL renewal has to be taken up at the Government-to-Government level and delay in such move will have disastrous consequences. Simply in absence of TPL, the garment and apparel sector will just disappear as after the expiry of TPL the costs will immediately jump 30% means closure of the industry,” Mr Lamba added.
“Under the Bahrain-United States free trade agreement garment exports to the United States reached over $173 million in 2013. This industry is the second largest export category representing 27% of Bahrain’s exports; Aluminum exports to the U.S. represent 29%. This sector directly employs over 800 Bahraini workers and about 4,000 expatriate workers. An additional 1,200 indirect jobs are supported by the industry. Since the FTA went into effect in 2006, the U.S. has enjoyed a 74% increase in its trade balance while Bahrain’s exports decreased over this same period but have regained traction reaching pre FTA levels in 2013.
Mr Lamba said that the apparel industry was now at risk of being lost. “Perhaps at the time of the FTA negotiations, the TPL could have not agreed upon by Bahrain as such condition, for example, doesn’t exist in Jordan-US FTA,” he pointed out.
Mr Lamba said that in the wake of the industry interest the apparel manufacturers in Bahrain have hired the international trade firm Sandler, Travis & Rosenberg, P.A. in Washington D.C. to assist them in finding a means to extend the TPL and preserve apparel manufacturing in Bahrain.
Mr Lamba said Nicole Bivens Collinson, President of International Trade and Government Relations was in Manama in the third week of September to meet with Bahrain officials, the Chamber of Commerce, AmCham and other stakeholders to discuss how to move forward with an extension initiative.
“The FTA between the US and Bahrain helped to solidify the geo-political importance of Bahrain to the US and to strengthen the economic ties. While some had predicted that apparel manufacturing would disappear in Bahrain, these companies have innovated and remained viable, even expanding their investments and today are responsible for putting Bahrain on the Fashion Map of the world. Leading American brands Ann Taylor, JC Penney, Walmart, JJill, Banana Republic, Gap, Talbot’s and Macy’s are today sourcing high value garments from Bahrain,” Mr Lamba quoting Nicole said.
“We cannot let the TPL expire. Thousands of jobs are at risk. Bahrain demonstrated earlier this week that it is a key US ally in the fight against terrorism and in the region. The US needs to demonstrate its willingness to help Bahrain remain economically competitive in the US market, maintain social stability through employment and extend the TPL for the apparel sector. We need to work with the U.S. Congress to pass legislation that will do that.”
“AmCham is committed to supporting apparel manufacturing Bahrain. We will work closely with the Bahrain government and provide whatever is necessary to help get the TPL renewed. The government is aware of the economic contribution of the industry and increase its efforts to preserve this industry in Bahrain,” AmCham President QaysZubi in a statement said.