On the first day the U.S.-Bahrain Free Trade Agreement (FTA) went into effect, 100 percent of consumer and industrial products and 81 percent of U.S. agricultural exports became duty free. Under the U.S.-Bahrain FTA, Bahrain has made broad commitments to open its services market wider than any previous U.S. FTA partner, streamline digital trade, improve intellectual property right protections, facilitate government procurement, and provide for effective enforcement of labor and environmental laws.
To determine when products that qualify can enter Bahrain duty-free:
1. It is necessary to obtain the appropriate HS number for your product.
2. With this number it is then possible to check the Bahrain tariff elimination schedule (PDF) to find out at what rate the duties on your product will be reduced. Each line item of the U.S. and Bahrain FTA tariff schedules are assigned a letter code that indicates the staging by which the current tariff for each item is reduced and ultimately eliminated. The schedules also note the base rate of customs duty, which is used to determine the starting point and interim rate at each stage of reduction for an item.
The staging categories are defined in Annex 2-B of the Agreement. The codes are generally defined as follows:
Category A: Goods become duty-free immediately upon the date that the FTA enters into force.
Category B: Duties will be eliminated in ten equal annual stages beginning on the date the Agreement enters unto force, and shall be duty-free effective January 1 of year ten.
Category C: Goods already receiving duty-free treatment shall continue to receive duty-free treatment.
The General Notes Section of Bahrain’s Tariff Schedule has two additional categories, which are generally defined as follows:
Category H: Duties shall remain at base rates (those rates in effect on January 1, 2003) during years one through nine. Duties will be eliminated effective January 1 of year ten. Bahrain specifically reserves the right to establish regulatory measures or apply fees or excise charges pertaining to the distribution, sale, or consumption of goods provided for in the items in Staging Category H.
Category I: Duties shall remain at base rates (those rates in effect on January 1, 2003) during years one through nine. Duties will be eliminated effective January 1 of year ten. Bahrain may continue to prohibit the importation of goods provided for in the items in Staging Category I.
The following examples are expressed in terms of the Customs Tariff Schedule of Bahrain, which is similar to the Harmonized Tariff Schedule of the United States (HTSUS), but is not exactly identical.
Tomato Paste (HS 2002.90.10): According to the Bahrain tariff schedule, this product has been designated Staging Category A with a base rate of 5 percent. This product, if qualifying as U.S. originating, will become duty-free immediately upon the date that the FTA enters into force.
Toilet Paper (HS 4818.10.00): According to the Bahrain tariff schedule, this product has been designated Staging Category B with a base rate of 20 percent. Beginning on the date the FTA enters into force, the duty will be reduced on a yearly basis in ten equal stages. Thus, upon entry into force the duty-rate for this good will be 18 percent. The duty will continue to drop incrementally, to 16 percent in year two, 14 percent in year three, etc., until the product becomes duty-free on the first day of year ten.
Prepared by the International Trade Administration
Trade Information Center