ISLAMABAD, Jan 25: Germany is demanding level-playing field for its investors to sign a new bilateral investment treaty with Pakistan.
Informed sources told Dawn that the German government was not ready to replace the 1959 bilateral investment agreement with new treaty, unless Pakistan treated German investors at par with Pakistani investors in terms of various fiscal and non-fiscal incentives.
A 3-member delegation headed by the secretary Board of Investment (BoI), also having a representative of the law ministry, left here on Tuesday for Berlin to discuss with the German authorities the signing of new investment treaty between the two countries.
The sources said that German government wanted the new investment treaty implemented retrospectively with a view to protecting the German investment made in the past.
"Since the government is likely to allow foreign investors to seek international arbitration in a dispute, the German government wants to help those German investors who have earlier gone into litigation against Pakistan government," a source said.
He said Pakistan was asking the German government "not" to include portfolio investment, as part of the investment. The purpose, he said, was to stop the portfolio investors to seek similar incentives like those in case of Foreign Direct Investment (FDI).
"Then we do not want Germans to insist over the issue of Intellectual Property Rights (IPRs) and this issue will be raised during discussions with the authorities concerned in Berlin", the source said.
Responding to a question, he said that Germany was against extending Most Favoured Nation (MFN) status to any country and wanted equal treatment for the foreign investors of different countries.
Another source said that Germany was also against the proposed signing of bilateral investment agreement between the United States and Pakistan. He said that negotiations with the US authorities were still continued and the proposed agreement was likely to be signed in 2005.
However, he admitted that this would be a source of discord between German and Pakistani governments. He said that a number of German companies including Siemens and a couple of telecom investors were interested in making their new investment in Pakistan.
Nevertheless, they were insisting to first have bilateral investment treaty signed between the two countries before going to Pakistan. The source said that Germany has also indicated to make new investment in other fields including oil and gas and infrastructure projects.
