The unrest in Bahrain has presented a policy dilemma for the Obama Administration because Bahrain is a pivotal ally. It has hosted the U.S. naval headquarters for the Gulf since 1946. The United States has had a formal Defense Cooperation Agreement (DCA) with Bahrain since 1991 and has designated it a "major non-NATO ally." There are about 7,000 U.S. forces in Bahrain, mostly located at the naval headquarters site. Apparently to pressure the government to reduce its use of force against protesters, the Administration has held up some sales to Bahrain of arms that could be used for internal security purposes and has implemented broader holds on weapons sales in response to some Bahraini actions since 2011. As a sign that the overall defense relationship remains strong, in September 2014 Bahrain joined the U.S.-led coalition against the Islamic State organization and has conducted air strikes against Islamic State positions in Syria. Bahrain's opposition asserts that the United States is downplaying regime abuses in order to protect the U.S.-Bahrain security relationship.
Bahrain's primary foreign policy concern has been Iran. Bahraini leaders, with some corroboration from U.S. and other statements, blame Iran for providing material support to hardline, violent factions in Bahrain. Bahrain has supported Saudi and UAE criticism of Iran not only for its purported activities against Bahrain's government, but more broadly for Iran's unqualified support for pro-Iranian Shiite movements and governments in the region. Bahrain has supported a Saudi concept of increased political unity among the GCC countries and has generally deferred to Saudi Arabia and other GCC countries to resolve political crises in the region such as those in Libya in and in Yemen. Unlike Qatar, UAE, and Saudi Arabia, Bahrain has refrained from backing any opposition groups in the Syria conflict.
Fueling Shiite unrest is the fact that Bahrain is poorer than most of the other Persian Gulf monarchies and therefore has lacked ample resources to easily and significantly improve Shiite standards of living. In 2004, the United States and Bahrain signed a free trade agreement (FTA); legislation implementing it was signed January 11, 2006 (P.L. 109-169). The unrest has further strained, although not crippled, Bahrain's economy.