On 9 May 2003 the United States outlined a strategy towards the establishment of a U.S.- Middle East free trade area, to be developed within a decade. One step towards this was to be the negotiation of bilateral investment treaties (BITs) and Trade and Investment Framework Agreements (TIFAs) with Middle Eastern countries.
The United States and Bahrain signed a Trade and Investment Framework Agreement (TIFA) on 18 June 2002, and on 4 August 2003 the United States Trade Representative notified the Congress of the President's intent to initiate a free trade agreement (FTA) with Bahrain. Negotiations began in January 2004 and concluded with an agreement on 27 May 2004. On 15 June 2004 the U.S. President notified Congress of his intent to enter into the US-Bahrain FTA. On 18 June 2004 draft texts of the agreement were made available to the public.
The United States - Bahrain Free Trade Agreement Implementation Act (H.R. 4340) was passed by the U.S. House of Representatives on 7 December 2005 and by the U.S. Senate on 13 December 2005. It was signed by the President on 1 November 2006 and became Public Law 109-169. On 27 July 2006 the President of the United States issued a proclamation to implement the U.S.-Bahrain Free Trade Agreement by 1 August 2006.