US Signs Three More Free Trade Agreements

The US government has announced conclusion of free trade agreement negotiations with Australia,
Morocco and Bahrain, and administration officials say they expect Congress to approve the
Australian pact this year. Unlike many of the free trade agreements negotiated earlier, the
Australian agreement appears to have strong support in Congress, and it has been endorsed by
textile manufacturers. Upon final approval, tariffs on more than 90 percent of the trade between
the two countries will be removed immediately.

The Morocco and Bahrain agreements are another story. US Textile manufacturing interests are
opposed to the Morocco agreement, because it provides for what they consider altogether too
generous tariff preference levels that permit use of yarn and fabric from non-participating
countries. While the Bahrain agreement has a rule of origin that requires apparel to contain yarn
and fabric made in the United States or Bahrain, it will permit use of third country inputs during
a not too clearly defined transition period.

US government trade officials hailed the Bahrain agreement as a model for openness in the
Persian Gulf. US Trade Representative Robert B. Zoellick went on to say: This is a high-quality,
comprehensive agreement that will provide American workers, consumers and business unprecedented
economic opportunity in Bahrain. It is a ground-breaking free trade agreement that will benefit
both our peoples. Bahrain will substantially open its services market, streamline digital trade,
protect intellectual property, facilitate government procurement and provide for effective
enforcement of labor and environmental laws.”

June 2004