Free Trade Agreements
Summary of the U.S. - Bahrain Free Trade Agreement
Status: Entered into force August 1, 2006
**The information presented on this website is meant to serve as a guide.
Only the agreement text and the customs regulations issued to implement the agreement
are definitive. For complex issues or where interpretation is required, U.S. exporters should seek legal assistance or an advanced ruling from the customs administration in the country to which they are exporting.**
If you have any questions about this Agreement, please contact Maria D'Andrea-Yothers
at the U.S. Department of Commerce Office of Textiles and Apparel at 202-482-1550 or by email.
How U.S. Textile and Apparel Companies Benefit
Through duty elimination, the U.S.-Bahrain FTA allows U.S. textile and apparel exporters to be more price-competitive in the Bahraini market when competing with domestic suppliers and with third country suppliers that do not have duty benefits. Through the elimination of a variety of non-tariff barriers, the FTA further opens the Bahraini market to U.S. products. The FTA affords substantial benefits in a broad range of service sectors; enhances the protection of intellectual property; and provides for a more stable business environment. The U.S.-Bahrain FTA will also promote the President’s policy of advancing economic reforms and liberalization in the Middle East and to establish a Middle East Free Trade Area (MEFTA) by 2013.
Under the FTA, qualifying U.S. textile, apparel, footwear and travel goods products enter into Bahrain duty-free. Products "qualify" if they meet the rules of origin of the agreement, which is discussed in the section below.
Tariff Preference Levels (TPL)--The U.S.- Bahrain FTA allows for a certain quantity of cotton or manmade fiber textile and apparel goods that do not meet the rules of origin to enter under a preferential tariff rate. These limited allowances for the use of yarn and fabric from a nonparty, referred to as TPL, allows U.S. fabric and apparel exporters some flexibility in their inputs. The TPL is set at a level of 65,000,000 square meters equivalent (sme) for each of the first ten years of the agreement. Any non-originating goods exceeding the quantity limits will be subject to the non-preferential (i.e., MFN) rate of duty. The TPLs are also applicable to Bahraini exports to the United States. (See Article 3.2, para. 8-9 of the Textile and Apparel Chapter (Chapter 3) for more details).
All qualifying footwear from Bahrain can enter the United States duty-free except for the following items, for which duties will be phased-out in equal increments over a 10-year period: 6401.10.00, 6401.91.00, 6401.92.90, 6401.99.30, 6401.99.60, 6401.99.90, 6402.30.50, 6402.30.70, 6402.30.80, 6402.91.50, 6402.91.80, 6402.91.90, 6402.99.20, 6402.99.80, 6402.99.90, 6404.11.90 & 6404.19.20.
The duty-free status for U.S. products is listed by HS number in the Bahrain Tariff Elimination Schedule. (For importing goods from Bahrain to the United States, see the U.S. Tariff Elimination Schedule.) Each line item of the FTA tariff schedules is assigned a letter code that indicates the staging by which the duty for each product is reduced and ultimately eliminated. Code "A" generally applies to textile, apparel, footwear and travel goods products indicating that tariffs were eliminated on the date the Agreement entered into force, i.e., August 1, 2006. Code "B" indicates the 10-year phaseout for certain footwear and Code "C" indicates products that were already duty free at the time of the agreement. Also, goods provided for in the items in staging category F shall be duty-free on the date this Agreement enters into force, in accordance with existing WTO duty-elimination commitments (see General Notes of the Tariff Schedule of the United States).
The TPL was extended via Presidential Proclamation 9223, Annex III, December 30, 2014, from December 31, 2015 to July 31, 2016, at which time the TPL expired.
Also see ITA's FTA Tariff Tool to determine current and future tariffs for qualifying products, as well as the date on which products are duty-free.
Note: U.S. origin goods that are exempted from customs duty in accordance with the U.S. Bahrain FTA and re-exported to other Gulf Cooperation Council (GCC) countries will be liable for customs duty at the final destination.
Qualifying Products/Rules of Origin
In order to take advantage of the duty reduction/elimination, products must qualify as "originating" goods under the terms of the Agreement. In general, the product must have sufficient U.S. or Bahraini content or processing to meet the criteria. Goods containing only U.S. or Bahraini inputs qualify. Goods containing inputs from other countries still might qualify if they meet specific criteria set out in the rules of origin of the Agreement.
Rules of Origin for Textile and Apparel Products
Textile and apparel products are subject to specific rules, based on tariff classification (See Article 3.2: Rules of Origin and Related Matters in the Textile and Apparel Chapter (Chapter 3). The rules for textile and apparel products are generally referred to as "yarn forward," which requires that the yarn production and all operations forward occur in either Bahrain or the United States, but the fiber may be from anywhere. There are some exceptions in the rules requiring "fiber forward," and some requiring "fabric forward." For more details, see Article 3.2: Rules of Origin and Related Matters in the Textile and Apparel Chapter (Chapter 3).
If a good does not meet the rule of origin requirements as set out above, a textile or apparel product might be considered originating if all non-originating fibers and yarns make up less than a "de minimis" seven percent of the total weight of the product. Special provisions also apply to textile and apparel goods put up in sets for retail sale. To see more details on these provisions, see Article 3.2: Rules of Origin and Related Matters in the Textile and Apparel Chapter (Chapter 3).
Rules of Origin for Non-Textile Footwear and Travel Goods
The rule of origin for footwear is a change to headings 6401 through 6405 from any heading outside that group, provided that the sum of--
is not less than 35 percent of the appraised value of the good at the time the good is entered into one of the FTA countries.
- the value of each material produced in the territory of Bahrain or of the United States, or both, and
- the direct costs of processing operations performed in the territory of Bahrain or the United States, or both,
Note: There are no restrictions on the use of imported uppers. The 35% value-added requirement can be comprised of a combination of value from Bahrain and the United States.
Rules of Origin for Non-Textile Travel Goods
For non-textile travel goods, the good will qualify under the FTA if it is a new or different article of commerce that has been grown, produced, or manufactured in the territory of one or both of the Parties; and the sum of
is not less than 35 percent of the appraised value of the good at the time it is imported into the territory of a Party.
- the value of materials produced in the territory of one or both of the Parties, plus
- the direct costs of processing operations performed in the territory of one or both of the Parties
For more information, see the U.S. Customs and Border Protection presentation--How do I Read Tariff Shift Rules.
For qualifying goods, in which U.S.-Bahrain FTA duty benefits are requested, the importer must make a claim of preference. The Agreement does not require that the importer provide a certificate of origin in support of the claim of preference. However, both the importer and the exporter have obligations to generate supporting documentation to back-up any claims of preferential treatment under the U.S.-Bahrain FTA.
To make a claim for preferential tariff treatment for a good, the importer must submit to the customs authority of the importing Party, on request, a signed declaration setting forth all pertinent information concerning the growth, production, or manufacture of the good. A requested declaration may require the following details:
- a description of the good, quantity, numbers, and invoice numbers and bills of lading
- a description of the operations performed in the production of the good in the territory of one or both of the Parties
- a reference to the specific provision that forms the basis for the claim for preferential tariff treatment
- a statement as to any fiber, yarn, or fabric of a non-Party and the origin of such material used in the production of the good
In general, Bahrain Customs requirements for the exemption of tariff on qualifying U.S. goods are as follows:
- Submission of invoice for the goods which indicates that The Country of Origin is "USA".
- Country of Origin "USA" to be clearly marked on the goods.
- The Importer shall request for exemption of customs duty by stating in the customs declaration that "The imported goods satisfy the provisions related to customs exemption prescribed in the Agreement and the relevant regulations as per the following phrase: The goods satisfy the provisions of the FTA between the Kingdom of Bahrain and the USA".
Bahraini customs officials may verify a claim of preferential treatment up to five years after the date of importation. Therefore, it is recommended that importers and exporters maintain documents relating to the importation of the good and all supporting documents for at least five years.
For further information, see the Bahrain Customs FTA webpage.
For information on common export documents, such as transportation documents, export compliance documents, certificates of origin, certificates for shipments of specific goods, temporary shipment documents, and other export-related documents, see the Export.gov webpage on Common Export Documents.
Measures to Prevent Circumvention of the Agreement’s Rule of Origin
The U.S.-Bahrain FTA, as with other recent free trade agreements signed by the United States, contains additional measures to ensure that textile and apparel goods are not subject to fraud, such as illegal transshipment. The parties agree that the exporting Party, at the request of the importer Party, shall conduct verification procedures to determine that a claim for origin of a textile and apparel good is accurate, allows the exchange of information between parties when suspicion occurs, and permits the importing party to suspend preferential tariff treatment to the textile and apparel good under suspicion or any textile and apparel good produced or exported by a specific company. For more information on this provision, please see Article 3.3: Customs Cooperation of the Textiles and Apparel Chapter.
Measures to Prevent Serious Damage, or Actual Threat Thereof, to the Domestic Industry
Under Article 3.1 of the Agreement - Bilateral Emergency Action, either the U.S. or Bahrain can take certain actions if imports of a textile or apparel goods benefiting from the reduction or elimination of duty under FTA are found to be causing serious damage to the domestic industry producing a like or directly competitive good. For details on the required procedures and each parties rights and obligations under the Bilateral Emergency Action provision, please see Article 3.1 of the Textiles and Apparel Chapter.
Intellectual Property Rights:
In the FTA, Bahrain commits to provide strong intellectual property rights (IPR) protection and enforcement. In order to implement its FTA obligations, Bahrain passed several key pieces of IPR legislation. These laws improve protection and enforcement in the areas of copyrights, trademarks, and patents. Implementing regulations supporting these laws have also been enacted. Bahrain has launched public awareness campaigns to equate IP piracy with theft.
In 2002, Bahrain implemented a new government procurement law to ensure transparency and reduce bureaucracy in government tenders and purchases. The law specifies procurements on which international suppliers are allowed to bid. The Tender Board is chaired by a Minister of State who oversees all tenders and purchases with a value of BD10,000 ($26,525) or more. The Tender Board plays an important role in ensuring a transparent bidding process, which the Government of Bahrain recognizes as vital to attracting foreign investment. The FTA requires procuring entities in Bahrain to conduct procurements covered by the FTA in a fair, transparent, and non-discriminatory manner.
Office of the United States Trade Representative Bahrain FTA website
Bahrain Customs FTA webpage