President George W Bush signed a bill enacting a free-trade agreement with Bahrain, the first such pact with a Gulf country and only the third with an Arab state.

"This accord is an important step in advancing President Bush's proposal to establish a Middle East Free Trade Area by 2013," US Trade Representative Rob Portman said.
Annual two-way trade between the United States and Bahrain is about $800 million.
The agreement requires Bahrain to immediately eliminate its already low tariffs on US consumer and industrial goods and most agricultural products. The United States will also eliminate tariffs on Bahraini goods.
The pact commits the Gulf financial services hub to further opening its market to US banks and other service industry firms and to strengthen copyright and patent protections.
Congress passed the Bahrain agreement by the widest margin of any pact since Bush won trade promotion authority in the middle of 2002. That measure allows the White House to negotiate trade deals that lawmakers cannot change.
Meanwhile, Bahrain is expected to receive $5 billion US investments in the next decade as a result of its Free Trade Agreement (FTA) with that country, a top businessman said.
Investments flow will mainly be in the form of joint ventures, said Bahrain Export Development Society chairman Yousef Mashal. Independent studies have shown the potential of the FTA if fully utilised, he said.
Under the FTA, a bilateral trade in consumer and industrial products will become duty-free as soon as the agreement comes into force. Bahrain and the US will provide immediate duty-free access on virtually all products in their tariff schedules and will phase out tariffs on the remaining handful of products within 10 years.
Bahrain will provide immediate duty-free access for US agricultural exports in 98 per cent of agricultural tariff lines. The rest will be phased out within 10 years.
The US will provide immediate duty-free access on all Bahrain's current exports of consumer, industrial, and agricultural products to the US. It will also phase out remaining tariffs under the agreement within 10 years.
Textiles and apparel will be duty-free immediately but they must contain either US or Bahraini yarn and fabric. There is a temporary transitional allowance for textiles and apparel that do not meet these requirements.
Bahrain will accord substantial market access across services. All sectors are covered unless specifically excluded. Key services sectors covered by the agreement include audiovisual, express delivery, telecommunications, computer and related services, distribution, healthcare, services incidental to mining, construction, architecture and engineering.
Other areas covered by the agreement in more detail include financial services, telecommunications, e-commerce, copyrights, patents and trade secrets, trademarks, tough intellectual property rights legislation and enforcement, government procurement issues, customs procedures, environmental commitments, and worker rights.