Textile and apparel imports: US relaxes rules of origin for Bahrain under FTA

The United States has announced generous rules of origin for textile and apparel imports from Bahrain over a 10-year period, Emerging Textiles, an international website on textile and clothing reported on Friday.
According to report, monitored here, the rules are part of a Free Trade Agreement (FTA) concluded between the two countries. "It is part of a US plan for establishing a Middle Free Trade Area (Mefta) and follows a similar agreement with Morocco. A duty-free accord was also signed with Jordan a few years ago," it said.
Under the deal, 100 percent of bilateral trade between the US and Bahrain in consumer and industrial products, including textile and apparel, will become duty free immediately after the agreement comes into force.
According to report, Bahraini textile and apparel exports to US fell by 24 percent in volume in the first four months of the year against the same period of 2003.
The US imports from the island declined by 27 percent in 2003 in volume, being limited to 187 million dollars in value terms.
To preserve the level in Bahrain's apparel exports, very generous rules of origin were offered by the US negotiators when compared with other similar agreements that were recently concluded.
As usual, a so-called yarn forward position was imposed on Bahrain under the agreement, forcing domestic apparel producers in utilising yarns and fabrics from the United States or Bahrain only.
To limit the negative impact of the yarn-forward position, the agreement included a "temporary transitional allowance for textiles and apparel that do not meet these requirements in order that the US and Bahraini producers can develop and expand business contacts", the US Trade Representatives (USTR) explained.
Under the temporary rule, cotton or man-made fabrics may be produced from yarns made outside the United States or Bahrain with exceptions. More importantly, apparel made in Bahrain may be produced with yarns and fabrics from any other origin without losing the duty free access to the United States, it said.
According to the report, the rule provides that the Bahraini producers will have the possibility to import fabrics from any Asian country and to export apparel to the US under the duty-free agreement.
The Emerging Textile report said that the generous provisions of the FTA could be of major interest for other countries expected to negotiate the US duty free access with Washington in the coming years.
The agreement had paved the way for other low cost nations to get similar trade advantages from the US, the report added.