WTO TRADE POLICY REVIEW OF BAHRAIN
Statement by the U.S. Ambassador Rita Hayes
Geneva, October 11, 2000

We welcome the delegation from Bahrain for this WTO trade policy review. The Government of Bahrain and the Secretariat should be congratulated on the quality of their reports. We also appreciate the analysis of the documentation that has been provided by the discussant. Many of the questions and issues being raised during this meeting are being discussed in other meetings here in the WTO. We have looked forward to learning more from Bahrain about its trade policies and plans for promoting economic liberalization and diversification.

As noted in the Secretariat's report, since its independence in 1971, Bahrain has pursued a liberal trade and investment policy, and has sought to integrate its economy closely with those of other countries in the region. Bahrain's economy is heavily dependent on petroleum, with oil accounting for some 64 percent of its merchandise exports. Bahrain has properly recognized the need to diversify its economy to protect itself from future declines in oil prices and to ensure economic growth as reserves become depleted. Bahrain has also been largely successful in diversifying its markets for non-oil products.

Bahrain is also to be congratulated that during this period, the economic ties between Bahrain and the United States have grown dramatically. In the past two years, the value of Bahrain's exports to the United States has nearly doubled. The United States has also become the largest overseas market for Bahrain's non-oil products.

In 1999 the United States and Bahrain signed a bilateral investment treaty and an open skies agreement. These agreements will help make Bahrain more attractive as a financial and commercial base for U.S. firms operating in the Gulf region. However, notwithstanding these agreements, we note from the Secretariat report that non-GCC countries including the United States, together still account for well less than 10 percent of the foreign direct investment in Bahrain. We would be interested in hearing more from the Bahrain delegation about its plan to attract investment from outside the region and whether it is considering the possibility of altering its investment policies.

While Bahrain should be proud of its economic accomplishments, several of its trade and investment policies appear to be acting as a brake on further economic growth.