European Union Delegation to Singapore

EU Statement at the Trade Policy Review of the Kingdom of Bahrain, 24 November 2021

Geneva, 24/11/2021 - 00:00, UNIQUE ID: 211124_4
Local Statements

EU Statement delivered by Marie-Pierre Nicora, Trade Officer

Thank you, Chair.

On behalf of the EU, I would first like to welcome the Delegation of Bahrain, led by H.E. Mr. Zayed bin Rashid Al Zayani (Minister of Industry, Commerce and Tourism). I would also like to thank the WTO Secretariat and the Delegation of Bahrain for their reports and the Discussant H.E. Mr. LI Chenggang (Ambassador of China) for his remarks.

Chair, this is the third review for Bahrain and I would like start by noting that in our assessment the country is moving in the right direction.

At the multilateral level, the EU commends Bahrain on the implementation of all of its commitments under the Trade Facilitation Agreement. Bahrain has submitted various notifications to the WTO during the review period, nevertheless, notifications on, inter alia, state trading enterprises and subsidies remain outstanding. Keeping in mind the timing of this TPR, the EU would like to stress the need to achieve concrete results at the WTO’s 12th Ministerial Conference next week to show that the WTO can deliver results on the economic recovery from the pandemic, trade and health and sustainability in the area of fisheries. While we welcome Bahrain’s participation in the Joint Statement Initiatives on e-commerce, investment facilitation for development and MSMEs, we encourage Bahrain to join the group of WTO Members that are committed to bringing the Joint Initiative on services domestic regulation to a successful conclusion at the MC12. This initiative is of great importance to the service suppliers across the world and will assist in their recovery from the pandemic. We also call for Bahrain’s cooperation in the WTO reform discussions, which are essential to setting the WTO on the path to manage effectively the challenges of the 21st century, and invite Bahrain to join the MPIA.  

Chair, the bilateral relationship between the EU and Bahrain is on a good track. The EU and Bahrain signed a Cooperation Arrangement to enhance dialogue in areas of common interest, including on trade, investment and economic cooperation in general.

The EU remains a very important trading and investment partner for Bahrain. In 2020, the EU was the second trading partner for Bahrain, covering 10.5% of the country’s trade, accounting for 16.8% of its import and 3.9% of its export. In 2020, bilateral trade in goods reached EUR 2.5 billion and trade in services amounted to EUR 1.6 billion in 2019 (last available data). Also, bilateral investment relations have developed considerably - in 2019 the stock of EU FDI in Bahrain reached EUR 3.4 billion (up from 2.4 billion in 2018) and the stock of Bahraini investment in the EU jumped to the remarkable level of EUR13.4 billion (up from EUR 2.8 billion in 2018).

Since the last review in 2014 – and similarly to the other GCC countries – Bahrain’s economy has been negatively impacted by the effects of the global pandemic and the steep fall in prices on the international energy markets, since Bahrain’s economy, industrial output and trade remain to a significant extent reliant on the energy sector and hydrocarbons’ production. It is therefore reassuring to note that Bahrain is aware of the need to reduce this high dependence on the energy sector and is implementing specific steps to diversify its economy under a long-term development strategy.

In order to support this process, the EU in 2019 – alongside of our GCC partners – has initiated the “EU-GCC Economic Diversification Project”. This project is ongoing and aims at supporting the economic diversification the Gulf economies, involving stakeholders from both the private and public sector in areas of standards, investment promotion, and intellectual property rights’ protection as well as new emerging areas such as circular economy, digitalization and connectivity.

As part of this project in the context of the ongoing Expo Dubai several significant events have been organized, including a conference on the participation of women in the technology sectors and a high-level EU-GCC Business Forum, focussing on economic diversification.  We welcome Bahrain’s active engagement in this project. The EU is of the view that these exchanges will contribute to helping the country in upgrading its economy in the coming years by making it more sustainable and knowledge-based.

Chair, despite of these positive developments, the EU has some questions and concerns regarding the trade and investment policies in Bahrain. We would like to reiterate our concerns voiced in the Council for Trade in Goods, the Market Access Committee as well in bilateral contacts with Bahrain in relation to the GCC “Treaty on Excise Tax” of December 2016. The EU would like to stress again the importance of harmonizing the implementation of the Excise Tax Law and the need for a close engagement with private industry stakeholders to revise the tax.

Chair, the EU is confident that this TPR will help Bahrain in reviewing important policy areas that are key in attaining the country’s economic objectives. Let me conclude by recalling that the EU is looking forward to Bahrain’s responses to the questions we have put forward today and others that we have previously submitted in writing. On behalf of the EU, I wish Bahrain a very productive and successful review. Thank you.

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