World Economic Forum Recognises Bahrain's Free Trade Credentials

by Ulrika Lomas, for LawAndTax-News.com, Brussels

23 June 2008

Bahrain's position as a regional leader in international free trade was confirmed on Thursday by the World Economic Forum's Enabling Trade Index.

The Index - which rates a total of 118 countries worldwide on how well they facilitate the free flow of goods across borders - ranked Bahrain's economy the second most open in the Gulf.

Bahrain - which has a reputation of driving economic openness within the region - was rated above fellow GCC states of Qatar, Oman, Saudi Arabia and Kuwait by the report that placed the Kingdom 37th in the worldwide rankings.

Crucial to Bahrain's recent success in this sphere has been the Free Trade Agreement (FTA) with the USA which was signed in 2006. The FTA - which resulted from long established commercial and diplomatic relations with the United States - was the first of its kind between Washington DC and any GCC state.

The deal was fast tracked in record time - only taking two and a half years from start to finish.

The FTA not only reaffirms Bahrain's open market policies by liberalising trade in goods and services, it also gives companies investing in Bahrain a competitive advantage.

This is shown by the 46.5% increase in Bahrain's exports to the USA in 2006 following the agreement coming into effect.

Under the FTA the Bahraini economy exports a vast range for products to the US - the top five being methanol, aluminium, garments, textiles and clothing. Major corporations such as the Bahrain Petroleum Company, Alba Aluminium Bahrain and Manama Textile Mills are already feeling the benefits of the agreement.

In addition to the FTA with the USA, Bahrain, as part of the GCC, has signed FTAs with Singapore, Switzerland, Norway and Iceland in 2008 and are currently in negotiations with major economic players including the EU, China, Japan, India, Brazil and Australia.

Underpinning Bahrain's free economy is a well developed regulation system.

The Central Bank of Bahrain - recognised as the region’s foremost regulator - offers business friendly regulations to international standards. Corporate accounting also follows International Accounting Standards and all the major international firms are represented in the Kingdom.

Shaikh Mohammed bin Essa Al-Khalifa, CEO of the Economic Development Board of Bahrain commented:

"I am proud that the World Economic Forum has recognised the Bahraini economy's leadership in and commitment to free trade. The recent FTA with the United States is vital to Bahrain's future economic growth - US corporations are recognising Bahrain as a gateway to the Gulf region while companies seeking to trade with the US can see the benefits of locating in the Kingdom.

"The Government of Bahrain is strongly committed to promoting free trade, whilst simultaneously maintaining a strong regulatory system that is attractive to corporations from across the world. Together this will see Bahrain increasingly become the location of choice in the Gulf," he finished.

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