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Bahrain’s Textile Industry to Suffer if TPL Expires

A United States trade deal with Bahrain in the Middle East, due to expire in 2016, may not be renewed.

The Senate Finance Committee last week rejected an attempt by Senator Bill Nelson and Congress members Gwen Graham and Jeff Miller to extend the Tariff Preference Level (TPL) on imports of certain cotton and man-made fiber, fabric, apparel and made-up goods from Bahrain under the U.S.-Bahrain Free Trade Agreement (FTA) until 2026.

Bahrain’s textile industry currently exports $200 million worth of goods to the U.S. When the FTA was activated in August of 2006, it included a clause that waived the yarn forward rule of origin for textiles and apparel, which limits how much yarn and fabric can be sourced from third parties before export from Bahrain to the U.S., for the first 10 years.

When the TPL expires on July 31 of next year, the country’s textile manufacturers will only qualify for duty-free benefits if they use yarn from the U.S. or Bahrain. If exporters cannot prove that all elements comply with the yarn forward rule, they will be subject to higher tariffs.

Anonymous sources told the Gulf Daily News that these companies would be forced to leave Bahrain if the clause was not extended, since it would make their businesses “completely uncompetitive” in a market already dominated by China, India, Vietnam and Bangladesh.

Stateside, WestPoint Home, a textile plant making comforters, quilts and other home furnishings in Chipley, Florida, has warned it may have to close its facility—cutting about 250 jobs—if it has to pay higher tariffs for raw materials imported from Bahrain.