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Portfolio: Assignment 2
Submission Date: 6 May 2017 (via Moodle, Turnitin)
Weighting: 15% (marked out of 100)
Type: Individual
Word Count: 1500 words +/- 10%
Learning Outcomes:
2. Evaluate the changing role and characteristics of ports and port operations as part of integrated
multimodal solutions for supply chain management, including the interplay between the revolutions in
containerisation and information technology and the subsequent impacts upon shipping systems.
3. Analyse the strategic importance of the Gulf States in the conduct of contemporary international
maritime freight services.
Assignment background:
‘In 2004 the Bahrain-US Free Trade Agreement (FTA) was signed on September 14, and came into force on
August 1, 2006.
Bahrain is the first Gulf Cooperation Council member and third Arab country to enter into a free trade
agreement with the U.S. The FTA between the Kingdom of Bahrain and the United States is an
international agreement that seeks to promote increased trade between both the countries.
The agreement outlines the duties and obligations of both countries in the elimination of trade tariffs on
imports and exports. It further aims to liberalize other conditions of trade in goods and services between
Bahrain and the US’.
Bahrain’s overall objective for the FTA is to facilitate trade flows, stimulate inward flows of investment,
expand key manufacturing and services sectors, and encourage the exchange of expertise to create
employment opportunities and stimulate economic growth in Bahrain.
Assignment task:
You are a Customs Clearance Officer at the Khalifa Bin Salman Port, dealing with clearance procedures
for international shipments from all around the world. The Minister of Interior has asked you to
evaluate the benefits and drawbacks of the Bahrain-US FTA in comparison to non-FTA shipments.
Write a report illustrating a comprehensive SWOT analysis of the Bahrain-US Free Trade Agreement
(FTA) from a Ports and Maritime perspective in comparison to non-FTA shipments.
2|Page
Your assignment should be written on this document (a Microsoft Word document - do not PDF the file) and
appropriately formatted; headings and subheadings should be used, you should use either Calibri or Arial font
(size 11 – excluding headings and subheadings), your work should be double-spaced and pages should be
numbered. Remember to reference your work (including in-text referencing) at all times using the APA format.
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plagiarism and originality using Turnitin. All submissions must be saved using the following naming convention
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First Name_ID number_ Assignment Part 1
E.g. Ahmed_20109090_Assignment Part 1
ACADEMIC INTEGRITY & HONESTY: When submitting this assignment you are confirming that you have
adhered to Bahrain Polytechnic’s policy on academic integrity and honesty including using APA referencing
appropriately. Any violation of this will be dealt with as stipulated in the policy.
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points.
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Contents
.................................................................................... 1
Introduction:- .......................................................................................................................................................... 5
SWOT analysis:-....................................................................................................................................................... 5
Strength:- ................................................................................................................................................................ 5
Tariffs elimination:- ..................................................................................................................................... 5
Bahrain service sector:-............................................................................................................................... 6
Attracting investors:- .................................................................................................................................. 6
Weaknesses:- .......................................................................................................................................................... 6
Bahrain-US FTA against GCC agreements:- ................................................................................................. 6
Lack of Bahraini businesses contribution:- ................................................................................................. 7
TPL expiry:- .................................................................................................................................................. 7
Opportunities:-........................................................................................................................................................ 7
Direct shipping line:- ................................................................................................................................... 8
Employment opportunities:-....................................................................................................................... 8
Investment in Bahrain:-............................................................................................................................... 8
Threats:- .................................................................................................................................................................. 9
Jordan and Oman FTA with U.S.:- ............................................................................................................... 9
Bahrain-US FTA violation:- .......................................................................................................................... 9
Anti-Muslim policies:- ............................................................................................................................... 10
Bibliography .......................................................................................................................................................... 11
4|Page
Introduction:-
On the 14th of September 2004 Bahrain signed the Free Trade Agreement (FTA) with U.S., and brought into
force on the 1st of August 2006. The purpose behind it is, to develop the economic relationship and to
minimize the trade and investment barriers between both countries (Center, 2010). Furthermore, the FTA will
smooth the trade flows, catalyzed investment flows, developed the service areas and increase the
employment opportunities (Anonymous, Bahrain-US FTA, N.D). In relation to maritime, Khalifa Bin Salman
port started it operations on the 1st of April, 2009. Therefore, it is considered as a transshipment hub for the
Gulf. Also, it has a container as well as general cargo terminal (Anonymous, KHALIFA BIN SALMAN PORT, N.D).
SWOT analysis:-
Strength:-
The Kingdom of Bahrain will gain strengths from the FTA with the U.S. in the following ways.
Tariffs elimination:-
Once the Bahrain-US FTA came into force, a ratio of 100 percent of the Bahraini products became a duty free
to access the United Sates market (Center, 2010). Furthermore, Bahraini exports have the benefit to compete
with other third country exporters that do not have the duty-Free benefits listed under the FTA (Anonymous,
The Bahrain-United States, N.D). An example of a duty-free products Bahrain imported from U.S. is, the port
construction equipment. The tariff on this equipment will be reduced to zero percent depending on the
5|Page
regulation listed within the agreement. In maritime
treated similar to the U.S. companies. Within the Bahrain-US FTA, the U.S. government will allow Bahraini
suppliers to access the accounting, architecture, construction and maritime sectors. This will result in wider
market access, and the Bahraini products will gain comparative advantages by entering the U.S. market
(Anonymous, The Bahrain-United States, N.D). In relation to maritime, the Bahraini shipping companies will
have a direct shipping access service to the U.S. West Cost. This will boost Bahrain’s transshipment activities
and it will link the U.S. international ports with Bahrain (Summers, Bahrain businesses urged to seize FTA
opportunities, N.D).
Attracting investors:-
According to the chamber secretary, Jassim Al Shatti, many companies will invest in the Kingdom of Bahrain to
benefit from the tax free in order to export their products to the United States. Also, the FTA will stimulate
trade between Bahrain and the U.S., and the import and export trades from U.S. will increase rapidly in the
Bahraini commercial markets. As a result of the FTA, The new Khalifa Bin Salman port will be an important
aspect in increasing trades by operating its facilities to their maximum to handle the huge demand
Weaknesses:-
The Bahrain-US FTA also has weakness effect on the Kingdom of Bahrain in several ways.
GCC agreements (Almezel, 2004). According to a senior official, the exemption of U.S. products from customs
duties will impact the GCC by adding an extra obstacle on the GCC customs unity. Also, it will hinder the
6|Page
economy and the financial unity. Nevertheless, the Bahrain-US FTA has included clauses that contradict the
GCC economic agreement fundamentals. Yet, in 2004 all the GCC leaders had a meeting in Bahrain and they
asked the host country to cancel the FTA with U.S. (Ghazaleh, 2004). Therefore, by ending the FTA with U.S.
Bahrain will lose the advantages of tax-free so the activities and the amount of ships leaving and entering
as, Bahrain is producing a high quality garment but Bahraini businesses have a weak effort in exporting it to
the U.S. (Summers, Bahrain businesses urged to seize FTA opportunities, N.D). According to the president of
(AmCham), Khalid Al Zayani, the American businesses are taking the whole advantage of the FTA and they are
enthused about the agreement unlike the Bahraini businessmen’s (Anonymous, Bahraini firms 'slow to benefit
from FTA', 2007). In maritime perspective, this will affect Bahrain economy because the numbers of exported
shipments are less than the imported ones. So, the ships entering for loading purposes are less than the
unloading.
TPL expiry:-
Whenever the tariff agreement is expired many Bahraini citizens will lose their jobs in the textile factories and
it might decrease trade. In 2015, the U.S. Senator and the Congress members requested the Senate Finance
must prove that the fabric and yarn are made in the U.S. or
not approving that, the number of ships entering and leaving Bahrain will be minimized due to the TPL expiry
Opportunities:-
The Bahrain-US FTA will provide future opportunities to increase the trade between both countries.
7|Page
Direct shipping line:-
Bahrain will develop a direct shipping line with the United Sates in the near future. Kingdom of Bahrain will
have the ability to deliver and receive containers from Los Angeles through direct path. According to the chief
executive of Khalifa Bin Salman Port, Marco Neelsen, the benefit of the direct shipping line is the goods
from using the causeway to use ships to deliver shipments (Anonymous, Bahrain-US direct shipping line on
way, 2013).
Employment opportunities:-
The Bahrain-US FTA will create employment opportunities for skilled and educated Bahraini workers.
expand the living standards for Bahraini citizens by giving them massive
States, N.D). In addition, Khalifa bin Salman port offers different types of
jobs for Bahraini expertise. These jobs will include, System Operator,
Whereas, the Check in must enter the containers numbers into the
scanning them.
Investment in Bahrain:-
The FTA will eliminate the trade barriers between Bahrain and the U.S. in order to increase the number of
foreign and American investors in Bahrain markets (Anonymous, The Bahrain-United States, N.D). As well, the
agreement helps in decreasing business risks for investors in both countries. Whereas, The U.S. market is open
8|Page
to accept Bahraini investors and exporters. This can be result in, increasing the competiveness of Bahraini
goods at the U.S. market. Furthermore, Bahrain is looking forward to attract more investors due to its political
and economic stability. In addition, owing to the growth of investors in Bahrain the imports and exports of
goods will increase and the number of ships entering Bahrain will rise (Anonymous, BAHRAIN US FTA ROLE IN
Threats:-
Bahrain-US Free Trade Agreement has future threats on the Kingdom of Bahrain economy.
States. This will increase the competition with Bahrain because Bahrain is already facing an expiry of the TPL
whereas Oman and Jordan have the chance to extend the agreement because they entered the FTA much
later that Bahrain. Furthermore, the Omani authorities have started to request an extension for the tariff
agreement to more than three years and they are confident of getting it. Additionally, the amount of ships
entering Bahrain will be reduced due to the fact that Jordan and Oman have extended their TPL (Anonymous,
Customs, Khalifa Al Shomeli, some importers ship cargo from China to the U.S then to Bahrain. Therefore, the
importers instead of stating the country of origin which is China, they tend to state it as the United States in
order to benefit from the Bahrain-US FTA duty-free (Anonymous, Importers ‘misusing Bahrain’s FTA with US’,
2013).
9|Page
Anti-Muslim policies:-
The new U.S. president Donald Trump has an intention of implementing the anti-Muslim policies. This rule will
ban seven Arab countries from entering and settling in the country even if they carry the U.S. visa. The
American-Arab Anti-Discrimination
fewer goods imported and exported from the U.S. effecting the
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Bibliography
Almezel, M. (2004, 12 19). Bahrain to take firm stand on FTA at Gulf summit. Retrieved 5 13, 2017, from Gulf
news: http://gulfnews.com/news/gulf/bahrain/bahrain-to-take-firm-stand-on-fta-at-gulf-summit-
1.342145
Alternet, B. N. (2017, 1 26). Trump's Racist Muslim Ban Is 'Even Worse Than Imagined'. Retrieved 5 13, 2017,
from Alternet: http://www.alternet.org/trump-racist-muslim-refugee-ban-rights-first-amendment
Anonymous. (2003, 5 9). Bahrain-US trade gets massive benefits. Retrieved 5 13, 2017, from Bahrain news
agency: http://bna.bh/portal/en/news/361344?date=2011-09-29
Anonymous. (2007, 12 12). BAHRAIN US FTA ROLE IN BOOSTING NATIONAL ECONOMY. Retrieved 5 13, 2017,
from Bahrain new agency: http://bna.bh/portal/en/news/419791
Anonymous. (2007, 8 1). Bahraini firms 'slow to benefit from FTA'. Retrieved 5 13, 2017, from Trade arabia:
http://www.tradearabia.com/news/ECO_128246.html
Anonymous. (2013, 7 19). Bahrain-US direct shipping line on way. Retrieved 5 13, 2017, from Trade arabia:
https://tradearabia.com/news/IND_239861.html
Anonymous. (2013, 4 7). Importers ‘misusing Bahrain’s FTA with US’. Retrieved 5 13, 2017, from Trade arabia:
http://www.tradearabia.com/news/LAW_233564.html
Anonymous. (2015, 4 28). US-Bahrain FTA expiry may hit textile firms. Retrieved 5 13, 2017, from Trade arabia:
https://www.tradearabia.com/news/BANK_280753.html
Anonymous. (2015, 4 28). US-Bahrain FTA expiry may hit textile firms. Retrieved 5 13, 2017, from Trade arabia:
https://www.tradearabia.com/news/BANK_280753.html
Anonymous. (N.D, N.D N.D). Bahrain-US FTA. Retrieved 5 13, 2017, from Bahrain Customs:
http://www.bahraincustoms.gov.bh/fta.php
Anonymous. (N.D, N.D N.D). KHALIFA BIN SALMAN PORT. Retrieved 5 13, 2017, from Ministry of
transportation and telecommunication: http://www.caa.gov.bh/content/khalifa-bin-salman-port
Anonymous. (N.D, N.D N.D). STATEMENT OF WHY THE UNITED STATES – BAHRAIN FREE TRADE. Retrieved 5
13, 2017, from Ustr:
https://ustr.gov/sites/default/files/uploads/Countries%20Regions/africa/agreements/bahrain/Statem
ent%20of%20Why%20the%20U.S.-
Bahrain%20FTA%20is%20in%20Interests%20of%20U.S.%20Commerce.pdf
Anonymous. (N.D, N.D N.D). The Bahrain-United States. Retrieved 5 13, 2017, from Economic development
board: http://www.bahrainedb.com/en/EDBDocuments/FTA-A4-6pp-SILVER-Spread.pdf
Anonymous. (N.D, N.D N.D). The Bahrain-United States. Retrieved 5 13, 2017, from Economic development
board: http://www.bahrainedb.com/en/EDBDocuments/FTA-A4-6pp-SILVER-Spread.pdf
Bahrain, A. t. (2007, N.D N.D). Gate Way. Retrieved 5 13, 2017, from Pars Bahrain:
http://www.parsbahrain.net/GATEWAYNewsLetter1.pdf
Center, T. I. (2010, 1 13). U.S.-Bahrain Free Trade Agreement. Retrieved 5 13, 2017, from export.gov:
http://2016.export.gov/FTA/bahrain/eg_main_017537.asp
Ghazaleh, D. A. (2004, 11 24). Bahrain-US free trade pact criticised. Retrieved 5 13, 2017, from Gulf news:
http://gulfnews.com/news/gulf/bahrain/bahrain-us-free-trade-pact-criticised-1.339516
Summers, M. (N.D, N.D N.D). Bahrain businesses urged to seize FTA opportunities. Retrieved 5 13, 2017, from
Gulf daily news: http://www.gulf-daily-news.com/Print.aspx?storyid=186340
Summers, M. (N.D, N.D N.D). Bahrain businesses urged to seize FTA opportunities. Retrieved 5 13, 2017, from
Gulf daily news: http://www.gulf-daily-news.com/Print.aspx?storyid=186340
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The marking framework for the assignment is tabled below:
Met criteria to a
Met criteria to an Met criteria to a Did not meet
very good standard
excellent standard satisfactory criteria
standard
B
A C F
14-16.9
17-20 12-13.5 0-11.5
7-8.4
8.5-10 6-6.9 0-5.9
Bahrain-US FTA An overview of the An overview of the An overview of the An overview of the
Bahrain-US FTA has been Bahrain-US FTA has Bahrain-US FTA has Bahrain-US FTA has not
10% excellently explained. been well explained. been adequately been adequately
explained. explained.
Report structure, Report is excellently Report is well structured. Report is reasonably well Report is not well
presentation, use structured. Information is Information is presented structured. Information is structured. Information is
of English and excellently presented, well and can be easily reasonably well not presented adequately,
referencing flows appropriately and understood. presented and can be does not flow appropriately
can be clearly understood. adequately understood. and cannot be clearly
APA referencing is understood.
10 % APA referencing is correct. mostly correct. APA referencing is poor.
APA referencing has not
(LOs 2&3) been used at all.