MANAMA, 25 November 2004 — A Bahraini official said yesterday that the recent reports claiming that the Gulf nations were angered about the Bahrain-US free trade allegations is “untrue”. “Bahrain has always delivered ahead of time decisions made by the Gulf Cooperation Council,” said the official who requested anonymity. “We believe in the GCC and have always implemented their decisions,” he said.
The statement comes after Gulf states said that Bahrain should back away from the deal and honor a regional agreement.
Washington and Bahrain signed a deal in September abolishing external tariffs, giving it trade advantages over fellow Gulf Cooperation Council (GCC) member states which had signed a customs union fixing tariffs at 5 percent.
Foreign and finance ministers of the six-nation GCC will discuss the deal, which is yet to come into force, at a meeting early next month after finance ministers failed to resolve the issue in Jeddah in October.
“The Bahrain-US agreement is in clear violation of the GCC economic agreement, whether in doing away with the GCC customs union common tariff or in granting the US more favorable treatment than it grants GCC member states,” said the official involved in the talks.
However the Bahrain official said that the free trade agreement was discussed within the economic and financial committee of the council. The committee discussed in its 59th meeting in Doha on Dec. 14, 2002 in Article 4 that “products that enter a Gulf nation and is exempted from taxes due to a free trade agreement with another country will include the taxes as soon as its enters the borders of another nation.”
“This article allows the US free trade agreement and erases any confusion or doubt,” said the Bahraini official.
A 2001 Gulf Arab regional agreement prohibits members from “granting preferential treatment exceeding that granted to member states” or from concluding any deal which violates any part of the agreement.
“There will be no clash between the responsibilities we have with the US trade free agreement and the GCC tax alliance or any other deals to that matter,” he said. The US plans talks on similar agreements with two other GCC states, the UAE and Oman.