Us Financial Support To Bahrain: What's The Deal?

The United States has a strong economic and diplomatic relationship with Bahrain, a Middle Eastern country with a high-income economy. In 2022, the US exported $885 million worth of goods to Bahrain, including cars, aircraft parts, and gas turbines. Bahrain, in turn, exported $869 million worth of goods to the US, mainly raw aluminium, aluminium plating, and stranded aluminium wire. The US-Bahrain Free Trade Agreement, which came into force in 2006, has generated commercial opportunities for both countries, with two-way trade exceeding $2 billion in 2021. Bahrain is a vital US partner in defence initiatives and hosts the US Navy's Fifth Fleet and US Naval Forces Central Command. The US also provides assistance to the Bahraini government, enabling it to obtain equipment and training for defence and security purposes.

US-Bahrain trade agreement

The United States-Bahrain Free Trade Agreement (USBFTA) entered into force on 11 January 2006, generating export opportunities for the United States and supporting Bahrain's economic and political reforms. The agreement also enhances commercial relations with Bahrain, an economic leader in the Arabian Gulf.

The USBFTA has created jobs for US farmers and workers, with US agricultural exports to Bahrain increasing significantly. Bahrain has also opened its services market wider than any previous FTA partner, creating important new opportunities for US financial service providers and companies that offer telecommunications, audiovisual, express delivery, distribution, healthcare, architecture, and engineering services.

Under the agreement, most Bahraini goods enter the United States free of duty and the merchandise processing fee (MPF). By 1 January 2015, virtually all Bahraini goods entered the US free of duty. In 2021, two-way trade between the US and Bahrain exceeded $2 billion, up from $1.5 billion in 2020. The primary US exports to Bahrain include aircraft, machinery, and motor vehicles, while the leading US imports from Bahrain include aluminium, oil, textiles, and plastics.

The US-Bahrain Bilateral Investment Treaty (BIT), which took effect in May 2001, covers investment issues between the two countries.

US exports to Bahrain

The US and Bahrain have a strong trade relationship, with the US being one of Bahrain's top trade partners. In 2022, the US exported $885 million worth of goods to Bahrain, with the main exports being cars ($90.7 million), aircraft parts ($57.8 million), and gas turbines ($47.3 million). Over the last five years, US exports to Bahrain have increased at an annualized rate of 35.4%, from $194 million in 2017 to $885 million in 2022.

In March 2024, the top exports from the US to Bahrain were commodities not elsewhere specified ($9.78 million), special-purpose motor vehicles ($6 million), cars ($4.55 million), cheese ($4.33 million), and valves ($1.72 million).

The US also exports a significant amount of services to Bahrain. In 2022, US exports of services to Bahrain were estimated at $453 million, with the leading sectors being transportation, financial services, and telecommunications, computer, and information services.

In terms of total goods and services trade, the US exported $1.4 billion to Bahrain in 2022 and $1.7 billion in 2023.

Bahrain's exports to the US are primarily raw materials, including raw aluminium, aluminium plating, and stranded aluminium wire. In 2022, Bahrain exported $1.83 billion worth of goods to the US, making the US one of Bahrain's top export destinations.

Bahrain exports to the US

Bahrain's economy is heavily dependent on oil and gas, with petroleum being the country's most exported product. In 2022, Bahrain exported goods worth $869 million to the US, with raw aluminium being the main product, accounting for $928 million in exports. Other significant exports to the US include aluminium plating ($177 million) and stranded aluminium wire ($129 million). Bahrain's exports to the US have been increasing over the years, with an annualized growth rate of 45.8% between 2017 and 2022.

In addition to raw aluminium, Bahrain also exports significant amounts of aluminium products to the US, such as aluminium plating and stranded aluminium wire. These exports fall under the category of non-oil exports, which the United States accounted for 12.4% of in 2019. Bahrain has been diversifying its economy away from oil and gas, with the non-oil sector showing robust growth.

The US-Bahrain Free Trade Agreement (FTA), which came into force in 2006, has generated additional commercial opportunities for both countries. Two-way trade between the US and Bahrain exceeded $2 billion in 2021, a significant increase from the previous years. The leading US imports from Bahrain include aluminium, oil, textiles, and plastics.

In March 2024, Bahrain's exports to the US included raw aluminium ($14.3 million), stranded aluminium wire ($13.9 million), jewellery ($7.48 million), house linens ($4.3 million), and raw plastic sheeting ($3.54 million). The total exports from Bahrain to the US during this period were valued at $87 million, resulting in a positive trade balance of $74.6 million in favour of the US.

The US exports a variety of goods to Bahrain, including cars, aircraft, machinery, and motor vehicles. In 2022, the US exported $885 million worth of goods to Bahrain, with cars being the main product, accounting for $90.7 million in exports. Aircraft parts ($57.8 million) and gas turbines ($47.3 million) were also significant exports from the US to Bahrain.

US services exported to Bahrain

The US provides a range of services to Bahrain, with the total value of US goods and services trade with Bahrain totalling an estimated $4 billion in 2022. The US exported $1.4 billion worth of goods and services to Bahrain in 2022, and this figure rose to $1.7 billion in 2023.

The primary US exports to Bahrain include aircraft, machinery, and motor vehicles. In 2022, the US exported $885 million worth of goods to Bahrain, with cars ($90.7 million), aircraft parts ($57.8 million), and gas turbines ($47.3 million) being the main products. The US also exported services to Bahrain, with transportation ($292 million), financial services ($118 million), and travel ($61 million) being the largest sectors in 2017. In 2022, the leading services exported to Bahrain were in the transportation, financial services, and telecommunications, computer, and information services sectors, totalling an estimated $453 million.

The US-Bahrain Free Trade Agreement (FTA), which came into force in 2006, has generated additional commercial opportunities for both countries. The US has a services trade deficit with Bahrain, which was estimated at $271 million in 2022. Despite this, the US goods trade balance with Bahrain shifted from a deficit of $952 million in 2022 to a surplus of $496 million in 2023.

US imports from Bahrain

The US and Bahrain have a strong trade relationship, with two-way trade exceeding $2 billion in 2021, up from $1.5 billion in 2020. In 2022, the US imported $869 million worth of goods from Bahrain, with the leading imports being raw aluminium ($928 million), aluminium plating ($177 million), and stranded aluminium wire ($129 million).

The US imports of services from Bahrain were an estimated $724 million in 2022, a 3% increase from 2021. However, there were no exports of services from Bahrain to the US in 2022.

In March 2024, the top imports of the US from Bahrain were raw aluminium ($14.3 million), stranded aluminium wire ($13.9 million), jewellery ($7.48 million), house linens ($4.3 million), and raw plastic sheeting ($3.54 million).

The US-Bahrain Free Trade Agreement (FTA), which entered into force in 2006, has generated additional commercial opportunities for both countries. The primary US imports from Bahrain include aluminium, oil, textiles, and plastics. In 2019, the US accounted for 12.4% of Bahrain's non-oil exports.

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