Bush signs Bahrain trade pact, a first for Gulf

WASHINGTON - President George W. Bush today signed a bill enacting a free-trade agreement with Bahrain, the first such pact with a Gulf country and only the third with an Arab state.

"This accord is an important step in advancing President Bush's proposal to establish a Middle East Free Trade Area by 2013," US Trade Representative Rob Portman said.

Bahrain, a moderate Arab island kingdom that neighbours Saudi Arabia, is home to the US Fifth Fleet. Annual two-way trade between the United States and Bahrain is about US$800 million ($1147.36 million).

The agreement requires Bahrain to immediately eliminate its already low tariffs on US consumer and industrial goods and most agricultural products. The United States will also eliminate tariffs on Bahraini goods.

The pact commits the Gulf financial services hub to further opening its market to US banks and other service industry firms and to strengthen copyright and patent protections.

Congress passed the Bahrain agreement last month by widest margin of any pact since Bush won trade promotion authority in the middle of 2002. That measure allows the White House to negotiate trade deals that lawmakers cannot change.

Bush has now signed into law trade deals with Singapore, Chile, Australia, Morocco and most recently six countries in Central America and the Caribbean -- Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

Morocco and Jordan are the only other Arab countries enjoying free-trade status with the United States.

Next week the United States will sign a free-trade agreement with Oman as part of its plan to craft a free-trade zone covering the greater Middle East by 2013. Another agreement with the United Arab Emirates is under negotiation.

Washington recently completed a free-trade deal with Peru and hopes to finish one soon with Panama. Pacts with Thailand, Colombia, Ecuador and South Africa are not as close to completion.

The United States could start free-trade talks this year with Egypt, South Korea and other countries.

- REUTERS