Bahrain will take an uncompromising position in the face of strong pressure from neighbouring Saudi Arabia regarding its trade agreement with the United States when the six leaders of the GCC hold their summit here tomorrow, a senior Bahraini official said.

Saudi Arabia was angered by the Bahrain-US Free Trade Agreement (FTA), which was signed in September, claiming it was against GCC conventions.

Bahrain maintains that it has done nothing wrong, and that the pact was negotiated in coordination with the economic cooperation committee of the GCC.

The issue is expected to cast a shadow over the GCC summit, which will be held here tomorrrow and Tuesday.

There has been speculation that Bahrain would try to appease its neighbour in order to avoid disrupting the summit.

But a Bahraini official, who spoke to Gulf News on condition of anonymity, said Bahrain would take a firm position on the issue of the FTA.

Bahrain was within its rights to sign the deal. "We will make no apology about it," he said.

Speaking at a Gulf security conference in Bahrain earlier this month, Saudi Foreign Minister Prince Saud Al Faisal said it was "alarming to see some members of the GCC enter into separate bilateral agreements with international powers on both the security and economic spheres as precedence over the need to act collectively," in an apparent reference to the Bahrain-US pact.

Bahrain defended the agreement again yesterday, saying it did not violate any GCC agreements.

"I wish to stress that the FTA would have positive effects not only on Bah-rain's economy, but also on the economy and commerce of the region and on each of the six states of the GCC," Minister of Finance and National Economy Abdullah Saif said in a statement, a copy of which was sent to Gulf News yesterday.

The FTA was signed in Washington on September 14 and is expected to be ratified by the US Congress and the Bahraini Parliament early next year.

According to a Bahraini official, Article 4 of the GCC Economic Agreement stipulates that goods entering any GCC state that are exempt from customs duties under a free trade agreement with another state are subject to duty when moved to another state.

"This clearly proves that any member of the Council could sign free trade agreements with other states that are not members of the Council," the official said.