Bahraini firms 'slow to benefit from FTA'
Manama, August 1, 2007
Bahraini firms have been slow to seize the advantages offered by their country's Free Trade Agreement (FTA) with the US, a senior official has said.
The US-Bahrain FTA, which came into force on August 1 last year, marks its first anniversary today.
Figures released in February cited the deal as a significant factor in the increase of trade between the two countries to a record $1.1 billion last year.
However, while the benefits of the deal have been highlighted numerous times in the past year, yesterday the president of the American Chamber of Commerce (AmCham) in Bahrain, Khalid Al Zayani, said local firms were not matching the enthusiasm of their American counterparts when it came to bilateral trade.
Al Zayani told Gulf Daily News, our sister newspaper, he was frustrated at the lack of demand from local firms and called for them to renew their efforts to take advantage of the preferential treatment afforded to Bahraini goods for export to the US.
'Frankly, I see more enthusiasm coming through from America rather than Bahrainis. I have found, unfortunately, there is a really slow pick up from Bahraini businessmen. They are not taking advantage as much as the Americans are at the moment,' he said.
'They are slow. They are just local - they have to be global and think big. They are used to their little village. They must think out of this box that they lock themselves in.
'I want them all to think like GPIC, like some of our young entrepreneurs who are trying to export skills to the US. I can see more start-ups doing business with the US rather than big business families, unfortunately,' he explained.
However, Al Zayani praised those firms that had been 'smart enough' to use the FTA to their advantage and said he expected bilateral trade to increase even further once reforms of shipping costs are completed.
'The FTA is a facility which was provided by both governments for business people from either side to take advantage of and those who want to take advantage have taken advantage of it.
'Those who are smart enough have definitely participated in this by selling goods without taxation in the US or in Bahrain.
'If you look at imports from the US - you have American cars, American goods carrying no duty. That is an advantage, so you see a jump in those products in the market.
'Manufactured goods in Bahrain going to the US are now treated as privileged without any duty. We are talking about aluminium, petrochemicals - the big, big stuff. This is where it is shown we have increased our exports to the US. If you look at the results of GPIC for example you will see the opportunities,' he said
'There would be even more opportunities had there been a direct shipping line from here to the US. Right now this is an obstacle that needs to be ironed out - the shipping charges to the US are still calculated as the Gulf to Europe and then from Europe to the US. There is no direct freight and once this is solved you will see even a sharper increase in exports from Bahrain to the US.
'This is something people in the shipping industry or government must work at - hopefully with the new management of the port in Bahrain by Maersk maybe they would be spearheading that improvement in rates because that would mean a lot more containers coming through to Bahrain and more business. So we are appealing to both governments and the port management to focus on this issue very seriously and maybe by this time next year we will have that behind us,' he said.
Al Zayani remains optimistic for the future of the FTA.
'We have prime industries that need to have a downstream, we have rich neighbours and markets that are open for us to take advantage of on both sides of the Gulf and even Iraq in the north if necessary,' he said.
US Department of Commerce statistics cited by US ambassador William T Monroe in February revea