December 13,2005

Chairman Grassley’s statement on the United States-Bahrain Free Trade Agreement Implementation Act

Statement of U.S. Senator Chuck Grassley regarding S.2027
the United States-Bahrain Free Trade Agreement Implementation Act
Tuesday, December 13, 2005

Mr. President, I rise in strong support of S. 2027, the United States-Bahrain Free Trade Agreement Implementation Act.

This legislation is not only good for the U.S. economy it will also promote free trade,democracy, and economic stability in the Middle East. On top of that, it will cement our tieswith Bahrain, our strong ally in the region.

This trade agreement is a clear win for the U.S. economy. Upon entry into force of theAgreement, Bahrain will immediately eliminate 100 percent of its duties on imports of U.S.consumer and industrial products.

U.S. farmers will also benefit. On day one of the Agreement, Bahrain will grant duty-freeaccess on 98 percent of its tariff lines that apply to U.S. agricultural and food products. Dutieswith respect to the remaining 2 percent will be phased out over 10 years.

This is solid market access for U.S. farmers and manufacturers.

U.S. service providers will also gain from this Agreement. Bahrain will providesubstantial market access across its entire services regime. The service provisions of theAgreement are based upon a “negative list” approach, which means that all service sectors arecovered unless specifically excluded.

Bahrain is already a major center for service providers in the Middle East, and thegovernment recognizes that its services sector can become even stronger through economicliberalization. Because of this agreement, as the region develops, so will opportunities for U.S.exporters.

While it’s important to note how the United States-Bahrain Free Trade Agreement willbenefit the U.S. economy in the aggregate, it’s even more important to point out how it willbenefit individual U.S. companies and their workers.

For me, I didn’t have to look far to find Iowans who stand to gain from this Agreement.

For example, the HNI Corporation of Muscatine, Iowa, looks forward to theimplementation of this trade agreement. HNI is the second largest manufacturer of officefurniture in North America, and it is specifically targeting the Bahraini market for increasedsales. So HNI’s employees in Iowa, as well as in other states, will benefit from Senate passage ofthis trade agreement.

Workers at Lennox’s residential heating and cooling products factory in Marshalltown,Iowa, also stand to gain from this Agreement. Lennox has a strong interest in increasing its salesin Bahrain. Like HNI, Lennox has a presence in many states, so its employees throughout thecountry–and not only its Marshalltown workers–will benefit from implementation of thisAgreement.

Smaller businesses throughout the United States also stand to benefit from this tradeagreement. One such company, the Midamar Corporation, is located in Cedar Rapids, Iowa.

The Midamar Corporation supplies halal foods and foodservice equipment to restaurants,hotels, and distributors throughout the world. This company was started in 1972 by CedarRapids native Bill Aossey. When Bill returned to Iowa after serving in the Peace Corps andtraveling throughout the Middle East, he came up with the idea of starting a company dedicatedto exporting Iowa products.

Well, some 33 years later, Bill has a lot to show for his hard work. He employs some 30Iowans, and the Midamar Corporation is a clear success. I visited Midamar’s facility last August,and I can report that Bill and his employees are very enthusiastic about their prospects once ourtrade agreement with Bahrain is implemented.

Aside from the immediate benefits to U.S. exporters to Bahrain, this Agreement’s impactwill eventually spread beyond Bahrain. The United States is currently promoting tradeliberalization and economic growth in other countries in the Middle East, and this Agreementwill serve as a template for other free trade agreements being negotiated in the region.

So the solid gains for U.S. farmers, workers, manufacturers, and service providers foundin this Agreement may be replicated in other free trade agreements in the region. This hasalready happened with Oman.

The United States recently concluded a free trade agreement with Oman that was basedlargely upon our Agreement with Bahrain. So the benefits to the HNI Corporation, Lennox, andthe Midamar Corporation that I’ve identified will be multiplied as other Arab countries adoptfree trade agreements with the United States that are based largely upon that of Bahrain.

This is all part of a broader goal. In May 2003, President Bush proposed a plan ofgraduated steps for Middle Eastern nations to increase trade and investment with the UnitedStates and others in the world economy, culminating with the establishment of a Middle EastFree Trade Area by the year 2013.

The importance of this vision was brought home on July 22, 2004, when the report of the9/11 Commission was released. That report contains, as one of its key recommendations, that a“comprehensive U.S. strategy to counter terrorism should include economic policies thatencourage development, more open societies, and opportunities for people to improve the livesof their families and to enhance prospects for their children’s future.”

Our trade agreement with Bahrain is an important achievement in that effort, and joinspreviously concluded bilateral trade agreements between the United States and Israel, Jordan, andMorocco.

The Agreement with Bahrain is an important part of a broader effort to encouragedevelopment, more open societies, and opportunities for people to improve the lives of theirfamilies and to enhance prospects for their children’s future, throughout the Middle East.

Finally, I note that S. 2027 was favorably reported out of the Finance Committee by aunanimous vote. So this bill, and this trade agreement enjoys broad bipartisan support.For all these reasons, Mr. President, I urge my colleagues to support S. 2027, a bill toimplement the United States-Bahrain Free Trade Agreement. I yield the floor.