MANAMA, 27 January 2004 — Bahrain and the United States began formal talks here yesterday toward a free trade agreement, the first effort with a Gulf country since US President George W. Bush proposed a Mideast free trade zone last year.
Bahrain’s Finance and National Economy Minister Abdullah Saif and Assistant US Trade Representative Catherine Novelli, who is heading a 35-member delegation to Manama, opened the negotiations.
Saif said a free trade agreement would build on the two countries’ longstanding political, economic, cultural and strategic relationships.
“Bahrain stands ready to negotiate this agreement and rapidly implement the commitments it will undertake. ... Our two nations now face the prospect of enhancing a relationship that has spanned decades,” Saif said in opening remarks of the four-day first round talks.
Novelli said trade talks with Bahrain stemmed from the country’s “vision for economic and political reforms that can be a shining example for countries in the region.”
Since coming to power in 1999, Bahrain’s King Hamad has taken steps to open up his country, reinstating parliament after nearly three decades and proceeding with 2002 parliamentary elections.
Citing Jordan as an example, Novelli said free trade agreements produce results. She said 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 added.
Several rounds of negotiations are expected to follow tomorrow’s first formal talks. A free trade agreement between the two countries could be signed by the end of the year. The United States exported $419 million in goods to Bahrain in 2002, while $395 million in imports came into the US from the country the same year.
On May 9, 2003, the president offered to extend US free-trade benefits, already enjoyed by Israel and Jordan, to other Middle East nations within a decade. The proposal is an effort to nudge along the Mideast peace process by linking US support for expanding economic opportunities in the Arab world with the drive to settle the Israeli-Palestinian dispute.
