Bahrain's textile and apparel sector has got a seven-month respite as the US government has corrected the expiration date of the US-Bahrain free trade agreement tariff preference level (TPL) to July 31, 2016. Earlier the date for expiration was December 31, 2015.

The correction has been made following attention drawn by Bahrain that the expiration date listed as December 31, 2015, for the 10 years’ TPL clause was incorrect as the free trade agreement was not initiated until August 2006. Hence, the 10-year program should be corrected to expire on July 31, 2016. 

The US-Bahrain agreement contains the yarn-forward rule of origin, but the rule was suspended for the first ten years of the agreement with the TPL set at 65 million square meters equivalent. This allowed domestic companies to use raw materials imported from third countries for making products meant for exports to the US and avail of the zero-duty benefit. 

Once the TPL expires on the corrected date of July 31, 2016, all textile and apparel trade would come under the yarn-forward principle, and garment makers will need to use yarn or fabric made either in the US or Bahrain to avail of the duty-free facility for export to the US.