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Bahrain's one-year-old Free Trade Agreement (FTA) with the US has given a significant boost to bilateral trade between the two countries and the trend is expected to continue, notes a local economist. According to the US International Trade Commission, bilateral trade between the US and Bahrain stood at around $900 million in 2003, but increased to almost $1.1 billion at the end of last year.
US exports to Bahrain climbed from $420m in 2002 to $490m by the end of 2006; and in turn the exports from Bahrain to the US jumped from $394m in 2002 to $632m by the end of last year.
"This high jump was actually a reflection of the FTA even before the implementation of the agreement," Bahrain Export Development Society (BEDS) chairman Dr Yousef Mashal told the GDN.
"At the end of 2005 Bahrain's exports to the US stood at $432m and this increased to $200m, which is a reflection of the implementation of the FTA in the summer of last year."
He said even the export of US goods to Bahrain boosted from $350m at the end of 2005 to $490m last year, and this was mainly reflected in the passenger car exports to Bahrain, which jumped from $27m in 2002 to $106m at the end of last year.
As for the Bahrain exports to the US, he said, the increase was mainly reflected in the aluminum from $63m in 2002 to $256m at the end of last year and fertilizers from $25m in 2002 to $43m at the end of last year.
"The US-Bahrain FTA is a comprehensive, high-quality agreement that not only removes trade barriers, but expands regional opportunities for the people of both countries," noted Dr Mashal.
"The agreement enhances Bahrain's bilateral relationship with the largest consumer market in the world and promotes economic growth and prosperity in both nations.
"It also reflects the kingdom's strategic commitment to opening markets and expanding opportunities for Bahraini workers and businesses.
"As the agreement opens the market for manufactured goods, agricultural products and services, it also supports His Majesty The King's economic reform and growth for Bahrain, encouraging foreign investment connected to broad-based development."
Dr Mashal said provisions in the FTA can help to improve the business and investment environment in Bahrain by providing more certainty and predictability for firms and individuals operating and investing in the country and promoting the rule of law.
He said, in turn, such provisions allow Bahrain's economy to realize the full potential for growth and development that the FTA offers.
The economist said the US-Bahrain FTA provides greater access to service markets than any other FTA with the US.
It provides a high level of protection for intellectual property rights and protects workers' rights and the environment, in turn creating a wide array of opportunities in service sectors, such as banking and securities, insurance, telecommunications, audio-visual, express delivery, distribution, healthcare, architecture, and engineering, he noted.
"The FTA includes provisions that help ensure service providers in both countries compete on the same level playing field," explained Dr Mashal.
"The FTA is also be an important force in encouraging increased direct foreign investment in Bahrain and in creating an economic environment conducive to additional employment opportunities for the people of Bahrain."
Dr Mashal said the US-Bahrain FTA was a significant step in furthering the US goal of creating a Middle East Free Trade Area (MEFTA) by 2013.
"Bahrain is considered the gateway to the MEFTA, in which the US seeks to expand trade with and investment in Middle East countries to further its domestic reforms and the rule of law, protect intellectual property and create a foundation for economic growth and prosperity," he added.
The US-Bahrain FTA was ratified by both the US House of Representatives and the US Senate in December 2005, signed into Law by US President George W Bush in January last year and implemented on August 1, 2006.
Source: Gulf Daily News – Kingdom of Bahrain
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