Bahrain: Bahraini workers employed in garment factories yesterday pleaded with US officials to save their jobs in the coming months.
During an event last night at the Bahrain Chamber of Commerce and Industry (BCCI), they urged the business community to push their case with US diplomats and the US administration.
It is based on concerns about a tariff that will come in for goods exported to the US that are not manufactured with materials imported from other countries.
“What will happen to the garment factories who are promoting the ‘Made in Bahrain’ brand to the world after the expiration of the tariff preference level (TPL) on July 31,” said Ambattur Clothing International human resource manager Ali Abdali.
“Apparel and textiles contribute 27 per cent of total exports from Bahrain to the US.
“More than 200 Bahraini workers will lose their jobs at our company and we request the business community and US government officials to help us save these jobs, which are not going to the US but moving to neighbouring countries.”
He was speaking during an event organised by the BCCI marking 10 years of the Bahrain-US Free Trade Agreement (FTA) attended by US trade representatives, US Ambassador William Roebuck and businessmen.
Three major garment firms, including Ambattur Clothing, enjoy duty-free exports to the US under the 10-year-old FTA, which took effect in August 2006.
They only qualify for this tax-free status because of a temporary TPL clause in the trade agreement, which allows the firms to use raw materials imported from countries that are not signatories to the US-Bahrain FTA and still export garments to the US duty-free.
Negotiations to renew the clause have been underway, but US officials have so far refused to sign a new deal.
An official form MRS Fashions, which is among the affected garment factories, said it had already set up new facility in Oman and feared job losses.
“Businesses have to pay close to 25pc more duty post the TPL expiration and with high labour costs in Bahrain this is going to be a major roadblock,”said MRS Fashions chief executive Harinder Lamba.
“My company will end up paying $18 million per annum in duties and no business can afford this.”
He said the four main Bahrain-based textiles exporters ship an estimated $200m worth of goods without any duty to the US every year.
“The total investment in the sector is believed to be in excess of $250m,” he said.
US Trade Representative office representative Jason Buntin, who was facing a barrage of questions with other members of the panel, did not comment on the job losses.
However, he said because of the FTA, Bahrain exports to the US increased by 100pc and US exports to Bahrain by 250pc.
Also on the panel was US firm West Point Home’s chief financial officer Mary Simon, who said despite the TPL expiration they were investing around $10m in its Bahrain manufacturing complex.
“We prepared ourselves ahead of the TPL expiration by increasing our spinning yarn capacity as part of our contingency plans,” she said.
BCCI first deputy chairman Khalid Al Zayani in his speech called upon Bahrain business community “to show guts” by investing in the US market.