U.S. and Bahrain Conclude Free Trade Agreement
The Office of the U.S. Trade Representative (USTR) has issued a press release and fact sheet stating that the U.S. and Bahrain have completed a comprehensive free trade agreement (FTA). Under the U.S.-Bahrain FTA, the U.S. and Bahrain will provide immediate duty-free access on virtually all products in their tariff schedules and will phase out tariffs on the remaining handful of products within 10 years.
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According to the USTR, the U.S.-Bahrain FTA is another step forward in the President's plan for a Middle East Free Trade Area (MEFTA) by 2013. The U.S. has FTAs with Israel and Jordan, and recently completed an FTA with Morocco. (See ITT's Online Archives or 05/14/03 news, 03051405, for previous BP summary on MEFTA.)
Under the Trade Act of 2002, the Bush Administration must notify Congress at least 90 days before signing the FTA with Bahrain. According to the USTR, the Administration will continue to consult with Congress on the FTA and will soon send a formal notification of its intent to sign the U.S.-Bahrain FTA to Congress.
According to the USTR, highlights of the U.S.-Bahrain FTA include (partial list)I:
Bilateral trade in consumer and industrial products will become duty-free immediately. 100% of bilateral trade in consumer and industrial products will become duty-free immediately upon entry into force of the U.S.-Bahrain FTA.
Bahrain to provide immediate duty-free access for U.S. agricultural exports in 98% of agricultural tariff lines. Bahrain will provide immediate duty-free access for U.S. agricultural exports in 98% of agricultural tariff lines and will phase out tariffs on the remaining products within 10 years
U.S. will provide immediate duty-free access on 100% of Bahrain's current exports of agricultural products to U.S. Among other things, the U.S. will provide immediate duty-free access on 100% of Bahrain's current exports of agricultural products to the U.S.
Certain textile and apparel trade will be duty-free immediately. Under the U.S.-Bahrain FTA, textile and apparel trade will be duty-free immediately, promoting new opportunities for U.S. and Bahraini fiber, yarn, fabric, and apparel manufacturing. The U.S.-Bahrain FTA requires qualifying textiles and apparel to contain either U.S. or Bahraini yarn and fabric and contains a temporary transitional allowance for textiles and apparel that do not meet these requirements in order that U.S. and Bahraini producers can develop and expand business contacts.
Bahrain will accord substantial market access across its entire services regime. Bahrain will accord substantial market access across its entire services regime and key services covered by the agreement include express delivery, telecommunications, computer and related services, distribution, etc.
Nondiscriminatory treatment of digital products. Each government commits to nondiscriminatory treatment of digital products and agrees not to impose customs duties on digital products. For digital products delivered on hard media (such as a DVD or CD), customs duties will be based on the value of the media (for instance, the disc), not on the value of the movie, music or software contained on the disc.
Strong deterrents against piracy and counterfeiting. The FTA requires each government to criminalize end-user piracy, providing strong deterrence against piracy and counterfeiting. Each government commits to having and maintaining authority to seize, forfeit, and destroy counterfeit and pirated goods and the equipment used to produce them. Intellectual property rights (IPR) laws will be enforced against goods-in-transit, to deter violators from using the U.S. or Bahraini ports or free-trade zones to traffic in pirated products. Ex officio action may be taken in border and criminal IPR cases, thus providing more effective enforcement.
Bahrain's commitments to sanitary and phytosanitary measures and technical barriers to trade. Bahrain commits to a science-based regime and transparency in standard setting which the USTR states will serve as an excellent example for the rest of the Gulf region.
Streamlined and transparent Customs procedures. The FTA requires transparency and efficiency in customs administration, including publication of laws and regulations on the Internet and procedural certainty and fairness. Both the U.S. and Bahrain agree to share information to combat illegal transshipment of goods, and special customs cooperation measures to prevent fraud in the textile and apparel sector. In addition, the FTA requires customs procedures designed to facilitate the rapid clearance through customs of express delivery shipments.
The rules of origin are designed to be easy to administer, to ensure that only U.S. and Bahraini goods benefit from the FTA, and to be consistent with the other U.S. FTAs in the region.
USTR press release (2004-44, dated 05/27/04), fact sheet (dated 05/27/04), and other information on U.S.-Bahrain FTA available at http://www.ustr.gov/new/fta/bahrain.htm.