Formal Talks Begin

His Majesty the King, Hamad bin Isa Al Khalifa, yesterday received the US Ambassador to Bahrain , Ronald E. Neumann, as Bahrain and the US began formal talks towards a free trade agreement. HM the King welcomed the US trade delegation, headed by Assistant US Trade Representative Catherine Novelli, and reaffirmed the Kingdom's keen interest in widening cooperation with the US. King Hamad said that the agreement would boost trade exchanges and produce outstanding benefits for both countries.

Bahrain and the United States began formal talks yesterday towards a free trade agreement, making it the first Gulf country to take such a step.

The Finance and National Economy Minister, Abdullah Saif, and Assistant US Trade Representative Catherine Novelli, who is heading a 35-member delegation, led the talks. The agreement could soon pave the way for thousands of job opportunities and a more transparent market.

"A free trade agreement would build on the two countries' political, economic, cultural and strategic relationships," Finance and National Economy Minister said. " Bahrain stands ready to negotiate this agreement. Our two nations now face the prospect of enhancing a relationship that has spanned decades", he said. "Bahrain has turned into the financial capital of the Middle East," he said. "We will provide trading access to the surrounding region, which has a population of more than 1.3 billion and a GDP of more than $900 billion. "We can serve as a gateway to the region," he said.

Several rounds of negotiations are expected to follow. The two sides announced their intention to negotiate a free trade deal last May. "Trade talks with Bahrain evolved from the country's vision for economic and political reforms. This is a shining example for countries in the region", Novelli said. "Free trade agreements produce amazing results. The foreign direct investment in Jordan rose from $627 million in 1995 to $2.4 billion in 2002. The deal also helped create 40,000 jobs in Jordan ," she said.

In 2002, the United States exported $419 million in goods to Bahrain and imported $395 million worth of goods from the country.

During a Press briefing, Novelli said that the agreement "could be finalised before the year ends. It is a hope, but we will hold the second round of negotiations by March. Bahrain 's government wants to enact the FTA as soon as possible.

"Bahrain is the only country in the Gulf which qualified for the pre-requisites which include membership in the World Trade Organisation," she said. "Since the announcement that Bahrain will join the FTA, many Gulf countries have approached the US to be part of the agreement," she said. "A group of American businessmen have already created an American Bahrain Friendship Committee that has been promoting potential business opportunities in Bahrain ," she said. The US-Bahrain move has promoted US President George W. Bush's quest to see a Middle East Free Trade Area, to be set up by 2013.

On May 9, 2003 , the US offered to extend free-trade benefits, already enjoyed by Jordan , to other Middle East countries within a decade. The FTA agreement covers 12 areas of investment including higher education, textile and financial services.

For more information, please contact the Office of the Economic Representative via e-mail info@bahraingateway.org or by telephone at (202) 537-7810.