Bahrain Tribune - 02/05/2008
Bahrain exports to US dive 10%
(MENAFN - Bahrain Tribune) — The US has emerged as the main beneficiary of the free trade agreement with Bahrain as the value of US exports to Bahrain amounted to $529 million during August 2006 to July 2007, up 28 per cent compared to the corresponding period a year earlier, a leading parliamentarian and economist said.
Dr Jasim Husain, member of Finance and Economic Committee at the Council of Representatives, said that the value of Bahraini exports to the US declined by 10 per cent in the same period to $638 million. Actually, the statistics support the argument that developed rather than developing economies in the world stand behind the FTAs.
Undoubtedly, he said, FTAs with Bahrain and Oman (and possibly later the UAE) reinforces the US cause of achieving a regional free trade accord.
"The US President George W Bush has set an ambitious goal of US Middle East Free Area (MEFTA) by 2013. Washington believes that FTAs lead to socio-economic changes in the region (in 2006 Oman agreed to modify its labour laws by making them in line with ILO standards by grating local and foreign workers the right to form unions and to go on strike). It is believed that the US continues to refuse concluding FTA talks with the UAE due to concerns related to rights of foreign workers in the country." "Qatar has opted to avoid engaging in FTA talks with the US on the grounds that such a deal allows for foreign intervention in internal labour matters. Conversely, Bahrain and Oman gave in to US demands, as they like to have access to the vast US market."
Citing the reasons behind the popularity of FTAs he said: "Lack of progress on the multilateral trade agreements being negotiated by the global community under the guidelines of the World Trade Organisation (WTO), the bilateral trade treaties or free trade agreements (FTAs) are gaining grounds and according to experts undermining the WTO efforts."
Against this backdrop, Dr Jassim said, it is no wonder why countries such as the US continue pursuing FTAs with other nations. At the moment, the US has separate FTAs with Canada, Chile, with Australia, Singapore, Jordan, Morocco, Bahrain and Oman, to name a few.
He added: "With regards to Gulf Cooperation Council (GCC) countries, the US in place deals with each of Bahrain and Oman. Bahrain was the first GCC state to sign FTA with the US in September 2004. However, the deal went into effect on August 1st 2006 following lengthy ratification process on both sides. The US-Bahrain FTA completed its first anniversary by July-end 2007."
"Undoubtedly, the US boasts the largest gross domestic product in the world. The US gross domestic product (GDP) amounts to more than $14 trillion. Also, the US is the largest importer in the world of goods and services. In 2006, the merchandise import bill amounted to $1.8 trillion. Additionally, through FTAs, both Bahrain and Oman hope to attract sustained investments from the US and other countries as well. Together, trade and investments should help both countries addressing economic challenges notably job opportunities for locals and GDP growth.
"The US prefers reaching FTAs with individual countries, as they are easier to conclude (only four months were required to reach a deal with Bahrain). The argument goes that it is difficult to reach a comprehensive FTA with a particular region, as countries of a union (like GCC) have different conditions on critical matters including labour and business laws, thereby making the prospects of reaching a deal only more difficult. "Free trade agreements (FTAs) are not famous within the corridors of the WTO and for good reasons."