Aiming to end the controversy that erupted following recent media reports that quoted an AGCC official as saying that Bahrain had violated the understanding amongst the six-member states of the AGCC, the premier said: "The signing of the FTA with the US is within this right, and we stress our commitment to all AGCC economic and commercial agreements and regulations."

Speaking to officials, citizens and media during his weekly majlis, Shaikh Khalifa said the FTA between Bahrain and the US was aimed at energising the economy of Bahrain as well as other Gulf states.  He  said Bahrain is a leader in implementing all AGCC decisions and agreements, including those relating to customs and property. Earlier last week, an AGCC official had said that the US-Bahrain FTA was "in clear violation" of AGCC trade deals, which have fixed customs tariffs at five per cent. According to Bahrain, in regard to the signing of FTA, the Kingdom had taken the decision in consultation with the AGCC's Economic and Financial Committee. 

The AGCC committee had agreed at its 59th meeting in Doha on December 14, 2002, that according to Article 4, "goods that enter any of the AGCC states and that are exempt from customs tariffs as per an FTA agreement with another state." Commenting on this, a Bahrain spokesman said that "this clearly proves that any AGCC member state could sign FTAs with other states that are not AGCC members."

"As regards Article 31 of the economic agreement signed between the AGCC members and which prohibits members from granting preferential treatment to non-members exceeding that granted to fellow AGCC member states or sign  an accord that violates the agreement, the Bahrain-US FTA articles do not give favourable treatment to US goods over AGCC articles," the spokesman said.

The spokesman also noted that such scenario proves that there is no conflict between the Bahrain-US FTA and the Kingdom's commitments to the AGCC customs union or between the US-Bahrain bilateral Trade and Investment Framework Agreement (TIFA) and the launching of negotiations to sign the FTA.

Bahrain has always been prompt in implementing the decisions of the Supreme Council of the AGCC in all areas, particularly exempting AGCC goods from all customs duties,  he added.

He also said Bahrain started the implementation of the decisions pertaining to the establishment of the AGCC customs union in January 2002, one year ahead of the date set by the 22nd AGCC summit in Muscat.

This clearly shows that Bahrain has always been honouring and implementing with  genuine keenness  AGCC agreements, and that the Kingdom should not be accused of "violating" the AGCC framework, the spokesman said.

According to a source, the US is also keen on signing an FTA with the UAE and the Sultanate of Oman.