MANAMA: The Kingdom of Bahrain, the first GCC nation to sign a free trade agreement (FTA) with the USA, is seen as one of the most progressive economies in the region, according to an US official.
“Bahrain being an open economy stands out as a role model in the region,” Timothy J Pound, Deputy Head of Mission at the US embassy in Manama told the audience of the Bahrain Association of Banks (BAB).
“The Kingdom of Bahrain and the United States free trade agreement (FTA) has helped the trade to reach $2billion by 2012 and trends show it may increase further,” he revealed during CEO’s luncheon meeting of the BAB.
According to Timothy the Bahraini exports to the US reached $700million with aluminium as a principal export in addition to fertiliser being produced by the GPIC reaching $91 million and textiles.
“There are 180 US companies including some of the major financial institutions are based in Bahrain and one would say the FTA is nothing but positive news,” he said.
“The FTA is a major economic treaty which was signed by the USA with of one its GCC allies and it opens up huge spectrum of co-operation for trade and business communities of both countries,” he said.
Timothy discussed trade relations between the US and Bahrain and the benefits of the FTA and shed a light on the President Obama’s ambitious target of doubling the US exports by 2016.
Overall, he was bullish on the economic rewards that both Bahrain and the United States were reaping following the FTA signed between the two sides.
“The FTA implementation has given a new dimension to the Bahraini exports enabling any product with 35% local content to be re-exported to the USA market without any tariff,” he explained.
Timothy while highlighting the most active recipients of Bahraini economy after the trade treaty came into force said was largely the services sector in addition to aluminium, IT, fertiliser and agriculture.
Talking about the co-operation in any specific areas he said that small and medium enterprises (SMEs) sector which constitutes 50% to 60% of the US GDP would be a major area which can be a helpful for Bahrain’s economy.
Generally speaking, he said, the FTA brings transparency in trade and commercial aspects of the partner economies.
“Bahrain has already finished a spade work on the transparency and necessary regulations sides. Both countries’ co-operation in customs is another positive aspect of the FTA as such co-operation helps in bringing in more economic competitiveness,” he said.
He also underlined the importance of bringing the private sectors of both sides closer by arranging the two-way trade missions.
“The trade delegations visits and creating a general awareness of the benefits of the FTA will enhance the scope the treaty,” he added.
“The FTA has improved the already admirable business environment in Bahrain and helped promote opportunities for entrepreneurship in many ways. The FTA has eliminated tariffs, opened service sectors, increased agricultural market access, strengthened transparency measures, and improved customs cooperation.
An FTA is a sign of faith in the strength and transparency of a partner country’s economy. Bahrain is rightfully proud of its many firsts, including being the first among the GCC to discover oil and the first to provide education to both boys and to girls. Bahrain should also be proud of being the first GCC country to have an FTA with the United States. The United States was eager to partner with Bahrain on a bilateral trade agreement because Bahrain has been, and continues to be, a leader in economic reform in the GCC.
“The United States has Free Trade Agreements in effect with only 20 countries worldwide. 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.”