FTA talks chance for Bahrain firms

Gulf Daily News, Bahrain

FTA talks chance for Bahrain firms

By Rebecca Torr

30 August 2009

Bahrain’s business community will get a say on the future of international trade with the US later this year.

A meeting of the US-Bahrain Free Trade Agreement (FTA) joint commission is being lined up in October.

Companies will be given a chance to discuss how the agreement is functioning. They can also put forward ideas to strengthen the deal.

Assistant US trade representative for Europe and the Middle East, Christopher Wilson, said he hoped the meeting would pave the way for further growth in sectors such as construction, finance, transport and tourism.

He said the US was hoping to cash in by exporting more food and agriculture products to Bahrain, saying much of the FTA activity to date had been concentrated in energy intensive sectors.

"The services chapter of the FTA does provide a lot of opportunities and many are probably not being fully utilised as they could," he told the GDN from Washington.

"Services are an area of particular promise for trade between countries.

"From the US perspective we would be interested in exploring opportunities to extend the component of food and agriculture products that are exported from the US to Bahrain. Currently, it’s quite a small amount - only $50 million (BD18.9m) or $60m (BD22.68m) annually.

"In terms of our examination for potential for US exports to Bahrain, the area of food and agricultural products is probably a particular interest."

The Bahrain-US FTA came into force three years ago, but Mr Wilson said the private sector - particularly new companies - should be more aware of it and incorporate it into their business plans and models.

He said the opportunities it presents should have a positive impact, particularly on their external trade and exports.

"I think it really comes down to incorporating an awareness of the FTA in the early stages in the development of this (business) plan, particularly as it relates to imports and investments," said Mr Wilson.

He, however, said it was up to companies to take advantage of the FTA, which came into force on August 1, 2006 with the intention of liberalising Bahrain-US trade.

It provides 96pc of Bahrain’s industrial and agricultural products duty-free access to the US markets and benefits for businesses wishing to supply cross-border services, as well as those establishing a local presence in the other party’s territory, among other things.

The agreement also includes commitments on intellectual property rights protection, transparency and efficiency in customs administration.

"It’s important to understand that the role of the government is to be the negotiator of the agreement and to create the opportunity," said Mr Wilson.

"But I think once the agreement is in place and negotiated, we turn a lot of the responsibility over to private sector participants themselves to take advantage of that - to create those opportunities for matchmaking and for expanding the number and depth of contacts between exporters, importers and investors in both countries.

"And we support that with technical assistance and awareness-raising efforts, such as seminars and conferences."

The trade expert claimed that business being conducted under the FTA had not been affected by the financial crisis, saying it was one of 14 FTAs that the US was banking on to help it recover from the global economic slump.

"We as policy makers and the participants in our business community are very much looking at the possibility of using existing tools like this FTA for possibilities where we can respectably grow our way out of this crisis," he said.

"So that’s very much the orientation the administration here in Washington is taking to this FTA and to our trade policy in general."

Mr Wilson, meanwhile, admitted there might have been some technical issues with the US-Bahrain agreement related to how customs provisions were being implemented.

However, he said both governments were trying to ensure each exporter understood how the provisions worked.

"The agreement is working as we intended it to and there aren’t a large number of issues or complaints," said Mr Wilson.

"We have had a number of instances where companies seeking to export products from the US to Bahrain under the agreement encountered just a little bit of confusion in terms of how the preferential customs provisions of the FTA should be applied to those products.

"But again I think the answer there is a constructive engagement with perhaps some additional technical assistance between our respective customs officials.

"I wouldn’t characterise these as major problems, but they are issues that have been brought to our attention by a small number of US exporters.

"I think we have a good plan underway working with the Bahrain government to address those issues."

For more information on the FTA, visit www.fta.gov.bh.

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