Bahrain’s landmark Free Trade Agreement (FTA) with the US has a tight timetable that means businesses have a narrow window of opportunity to get ready, says leading professional services firm KPMG. 

“We believe the time needed to plan and comply with the regulations and stipulations of the agreement is between three and six months, which means businesses in Bahrain must act now if they are to begin benefiting from the moment the agreement goes live,” said Jamal Fakhro, managing partner, KPMG, at a workshop titled ‘Bahrain Calling’ and organised by the firm.
Taken as a whole, the FTA will create a number of overall benefits for Bahrain.  These include its ability to become a regional centre for re-exporting US products; private sector job creation; the promotion of mergers between smaller and larger companies to improve competitive strength, qualify as exporting companies and capitalise on improved management and              production systems and standards; and the ability to attract foreign companies to establish a presence in Bahrain as a springboard to US markets, he says.
In 2003, two-way trade between Bahrain and the US was $887 million, with Bahrain’s exports accounting for some 43 per cent of this total.  When the agreement comes into effect, immediate duty free access will be given to virtually all products in tariff schedules with a 10-year phase out period on tariffs on the remainder.
This translates into 96 per cent of Bahrain’s industrial, consumer and agricultural products gaining immediate access to US markets and all but 80 US industrial and agricultural products being able to access Bahrain’s markets with duties being phased out in 10 years.
By its entry into the trading agreement, Bahrain will be able to expand the amount of goods and services it produces and consumes by exchanging exports with cheaper imports. Trading in this way is set to enable Bahrain to enjoy sustainable growth and development, said Fakhro. 
Businesses will be able to re-position their products and services to benefit from the lower entry cost into US markets through the removal of customs duties and tariffs. Manufacturers will be able to drive down production costs by reviewing internal processes and cost structures, and mergers and acquisitions will create an overall wider customer base, he said.
“Opportunities for US banks, insurance, securities and related services to establish a presence in Bahrain are provided for in the agreement and Bahrain’s regulatory environment will certainly be a definite attraction. The kingdom’s leading position as an Islamic banking hub will also provide opportunities based on the increasing US demand for Islamic banking products.
“The agreement offers the two nations benefits in both directions, but Bahraini businesses will have to follow the required steps and procedures to comply with regulations.”