T ransparency
Bahrain was the first Gulf State to arrange a FTA with the United
What benefits can Bahrain-based companies
expect?
How does the FTA protect intellectual property?
administrative proceedings covering trade, and to ensure
States, and even today is one of just two to have done so. This
that traders from the other country can obtain prompt and fair
puts Bahraini exports of goods and services to the United States
review of final administrative decisions affecting their interests.
at a competitive advantage to those from most of the Middle East.
The elimination of tariffs under the U.S.-Bahrain FTA allows
property will benefit from improved copyright protection. Under
Such an advantage can generate a greater market share, or
Bahraini suppliers of goods and services to be more price-
the FTA, each government commits to protect trademarks, patents
higher profit margins.
competitive in the U.S. market. Bahraini manufactured
and business trade secrets, consistent with U.S. standards and
goods which qualify under the Agreement will afford buyers
international trends. U.S. and Bahrain governments will be
considerable cost savings in terms of import duty. Bahraini
required to establish transparent procedures for the registration
For manufacturers, there are evident benefits. Even those from the
exporters also have a competitive advantage in the U.S. over
of trademarks and to develop an online system for their
surrounding Middle East and North Africa qualify for duty-free
competing third country exporters that do not have the duty
registration and maintenance.
treatment, if they add 35% domestic content within Bahrain.
benefits provided under the FTA. The FTA also fosters a fair
• Commitment to prohibiting corrupt practices, such as bribery,
enforcing such prohibitions, enforcing penalties for violators,
and adopting or maintaining measures protecting whistleblowers.
process for government procurement.
Enforcement of the Agreement
The Agreement strengthens Bahrain’s position as the financial
• The Agreement emphasises compliance through consultation
and trade-enhancing remedies.
• The Agreement provides for mechanisms of state-to-state
it forges stronger links between the Bahraini and U.S. financial
Bahraini service providers receive significant market access
All obligations, including core labour and environmental
services sectors. There are particular benefits for Islamic banking
across the U.S.’s entire services industries and receive the same
provisions, are subject to dispute settlement provisions in the
and specialist areas of insurance.
treatment as provided to U.S. companies in almost all areas.
Agreement.
Bahrain is the most mature, well-established business hub in
Under the FTA, the U.S. Government provides access for Bahraini
architecture, engineering, advertising, construction, tourist
In a country already known for its openness, the terms of the
services, business consultancy and management, and publishing.
FTA reinforce transparency and sound business practices.
In addition, Bahrain-based financial services providers are
For financial enquires call us on +973 175 89 870
granted full rights to establish subsidiaries, joint ventures,
resolution.
or branches for banks and insurance companies. Bahraini
Mail us to [email protected]
border basis. U.S.-based providers of e-commerce will also
competitive, value-creation story which focuses on sustainability,
When agreeing the FTA, Bahrain laid another foundation stone
receive improved market access with the removal of barriers for
skills, substance, and good governance.
for the building of a sustainable and diversified economy,
digital products, including custom duties.
based on productivity-led growth. The FTA helps to create
attractiveness of Bahrain as a base for international companies.
For more information, see www.amcham-bahrain.org
help you set up and support your business long-term:
and expertise, protection of intellectual property and dispute
environment for businesses and communities. We have a globally
The Bahrain-U.S. FTA is just such a foundation, increasing the
To find out how the Bahrain Economic Development Board can
For investment opportunities call us on +973 175 89 969
insurance providers are able to supply insurance on a cross-
ahead of the building of landmarks.
Contact us:
The Agreement’s terms facilitate the exchange of technology
the Gulf, providing the most free, open, liberal, transparent
Bahrain will always focus its efforts on the building of foundations,
The Free Trade Agreement gave a major push to the Bahrain-US
trade relationship with total trade exceeding US$1.1 billion in 2009
– an increase of 44% in just four years.
FTA through the use of the so-called ‘negative list’ approach.
service suppliers in the following service sectors: accounting,
• Commitment to efficient and transparent dispute panel
third parties to provide their input.
Tariff-free access to the world’s largest economy
The very few exceptions are specifically provided for under the
Economic freedom and opportunity
submissions by governments and opportunities for interested
How does the FTA affect service sectors?
What provisions are maintained in the
U.S.-Bahrain FTA to enforce compliance with
the Agreement?
gateway to the Middle East. By providing bilateral free access,
consultations and dispute settlement procedures.
procedure, including open hearings, public release of legal
The Bahrain-United States
Free Trade Agreement
U.S. multinational companies with high value-added intellectual
an environment in which there are plentiful employment
opportunities for educated and highly skilled Bahrain workers.
As you would expect from business-friendly Bahrain, above all
the FTA fosters opportunity for Bahraini businesses and those
wishing to locate here.
S ecuring competitive advantage for
exports
The U.S. Free Trade Agreement (FTA) grants Bahraini businesses
tariff-free access to the giant U.S. economy. When combined with
the fast-growing Gulf Cooperation Council1 common market
and our other bilateral agreements, the FTA means you can
trade freely with a vast and varied international market - without
suffering export levies of any kind.
1G
ulf Cooperation Council member states are: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the
United Arab Emirates.
Or visit our website www.bahrain.com
Business hours: Sunday-Wednesday 8am-5pm
Thursday 8am-2pm (GMT +3hrs)
Free Trade Agreement
• Each government is required to apply fair procedures in
Questions & Answers
Overview of the Agreement
The FTA removes duties across the majority of economic sectors,
ommitments on Technical Barriers
C
to Trade (TBT) and Sanitary and
Phytosanitary Measures (SPS)
both in terms of goods and services. The following are some of
the highlights of the U.S.-Bahrain Free Trade Agreement:
transparent, science-based and are in accordance with
phased out in stages.
technical regulations, standards and conformity assessment
being phased out over 10 years.
‘National’ or ‘Most Favoured Nation Treatment’, except when
Government procurement
transparency in the financial services sector.
Telecommunications
• Telecommunications service providers from each country
• The Agreement reinforces rules of fairness, transparency and
predictability of government procurement procedures, such as
• Textiles and apparel products have duty-free access, as long as
they meet the rules of origin requirement (Yarn-Forward Rule).
• The Agreement provided for a 10-year transition period, during
which Bahrain’s production of textiles and apparel that do not
meet the rules of origin requirement will be exported to the U.S.
duty free (limited to 65 million square meters).
Customs administration
• The Agreement includes commitments to ensure transparent
and efficient customs administration, including the publication
of laws and regulations on the internet, and establishes prompt
customs clearance procedures.
• Both governments agree to share information to combat the
illegal trans-shipment of goods, and to implement special
customs cooperation measures to prevent fraud.
Rules of origin
• The Agreement lays out specific rules of origin to ensure that
only Bahraini and U.S. goods benefit from the Agreement’s
preferential duty treatment.
• Two types of goods produced in Bahrain will receive the
benefits of the Agreement:
– Goods originating in Bahrain.
– Goods that underwent a substantial transformation, with at
least 35% value added.
bid decision-making and review procedures.
• Bahraini suppliers will be granted ‘National Treatment’ and
non-discriminatory access to bid on contracts from various
U.S. Central Government entities and Government-owned
enterprises. Similarly, US suppliers will be granted access on
a non-discriminatory basis to bid on contracts from various
Bahrain Government entities.
Services and cross-border services
• Service providers from each country will enjoy substantial
market access to the services market of the other country,
and will be accorded ‘National’ or ‘Most-Favoured Nation
Treatment’.
• The Agreement uses the ‘Negative List’ approach, meaning that
all sectors are covered unless specifically excluded.
• Key services sectors covered by the Agreement include
telecommunications, computer and related services,
healthcare, education, advertising, tourism, transportation,
engineering, construction, audiovisual and express delivery
services.
• The Agreement provides benefits for businesses wishing to
supply services cross-border (e.g. electronically), as well as
businesses wishing to establish local presence in the other
party’s territory.
• All policies and measures affecting services trade will be
applied in a fair, objective and non-discriminatory manner.
Labour rights
• E ach government reaffirms its obligations as members of the
Building stable economic ties
will have reasonable and non-discriminatory access to the
telecommunications market of the other country.
• No restrictions on the type of technology used.
• F irms of each party seeking to build a physical network in the
other party’s territory will have non-discriminatory access to
facilities.
• The Agreement includes a dispute settlement mechanism in
accordance with the Bahrain Telecommunications Law.
Electronic commerce
• The Agreement promotes a liberalised, non-discriminatory
trade environment for e-commerce.
• E ach government commits to non-discriminatory treatment of
digital products and agrees not to impose customs duties on
digital products.
• F or 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.
Intellectual property rights
standards for copyrights, patents and trademark-related
commitments, to lock in intellectual property protections and
enforcement to deter counterfeiting and piracy.
•B
uilds on the WTO Agreement on Trade-Related Aspects of
Intellectual Property (TRIPS) and others such as the World
Intellectual Property Organization (WIPO) Copyright Treaty, the
WIPO Performances and Phonograms Treaty, and the Patent
Cooperation Treaty.
A key aim of the treaties was to define a stable investment
United States and Bahrain today. Since coming into force in
framework, which would enable Bahrain to attract increased U.S.
2006, the Agreement has introduced a permanent set of trade
investment, particularly from companies seeking a regional base.
and investment rules and provisions, including reductions in
The U.S.-Bahrain Council on Trade and Investment focused on
tariffs and non-tariff trade barriers and intellectual property
economic and financial cooperation, trade, joint investment and
protections.
enhancing the business environment in Bahrain, particularly
with regard to banking, insurance, healthcare, education and
As such, it provides opportunities and reduces business risks for
training, infrastructure and tourism development.
investors and commercial enterprises in both countries.
Today, the FTA is intended to strengthen economic partnership,
• E ach government will be required to effectively enforce its
labour laws. The Agreement makes clear that it is inappropriate
Bahrain’s formal economic relationship with the United States
to weaken or reduce domestic labour protections to encourage
pre-dates that of other Gulf States. When the Bilateral Investment
trade or investment.
Treaty entered into force in 2001, it was the first such treaty
through expanding trade and investment, as well as facilitating
free market competition. Indirectly, the FTA encourages the
exchange of expertise and creates employment opportunities.
signed in the region. Three years later, the FTA was again a first
•P
rocedural guarantees to ensure workers and employers
in the Gulf.
access to fair, equitable and transparent labour tribunals or
courts.
•A
Labour Cooperation Mechanism is established to promote
Countdown to a Free Trade Agreement:
higher labour standards and to advance further common
commitments, including the principles embodied in the June
1998 Declaration on Fundamental Principles and Rights at
Work, and compliance with ILO Convention 182 on the Worst
Form of Child Labor.
1999: Signing of Bahrain-United States Bilateral Investment Treaty (BIT)
2001: The BIT enters into force
2002: Trade and Investment Framework Agreement (TIFA) agreed
Environment
• E ach government is required to enforce effectively its
2002: Bahrain-U.S. Council on Trade and Investment established
2004: FTA signed
environmental laws.
2006: FTA ratified
• E ach government commits to establish high levels of
environmental protection, and not to weaken or reduce
environmental laws to attract trade or investment.
•P
rocedural guarantees that ensure fair, equitable and
transparent proceedings for the administration and
enforcement of environmental laws are married with provisions
that promote voluntary, market-based mechanisms to protect
the environment.
•P
arallel to the Agreement, a Memorandum of Understanding
was signed that will establish a Joint Forum on Environmental
Cooperation, to strengthen Bahrain’s capacity to protect
• The Agreement covers the most updated international
The FTA is at the core of bilateral economic ties between the
International Labor Organization (ILO), and commits to strive to
•C
ommitment to reaffirming legislative and procedural
advance public notice of purchases and timely and transparent
T extiles and apparel
under Bahraini law.
ensure that its laws provide for the highest labour standards.
procedures do not impede trade.
• All U.S. industrial and agricultural products have duty-free
access to Bahrain, except for 80 products where duties are
infringements, and provides for criminal penalties for violators
to the other party’s financial services markets and be accorded
• Reaffirms Bahrain’s World Trade Organisation (WTO)
commitment on TBT and SPS measures, and ensures that
which are not currently produced in Bahrain, are being
• F inancial service providers from each party will enjoy access
excluded by a Non-Conforming Measure.
• 96% of Bahraini industrial and agricultural products have duty-
• Tariffs on the remaining industrial and agricultural products,
• The chapter covers traditional as well as Islamic financial
• The Agreement ensures that policies and regulations on
international standards.
free access to the United States.
• Includes commitments to strengthen Bahrain’s enforcement
procedures, provides for compensation of rights holders for
services.
food labelling, biotechnology and shelf-life standards are
Liberalisation of trade in goods
Financial services
the environment through the promotion of sustainable
development.