KARACHI, Feb 28: The signing of a Bilateral Investment Treaty (BIT) between Pakistan and the US, expected on the eve of visit of President Bush this weekend in Islamabad, has apparently been put off again as businessmen give no indication of firm answers from the US on objections raised by Pakistan on certain clauses.
Business leaders in Karachi say that the Board of Investment (BoI) is understood to have expressed reservations on the arbitration and dispute resolution clauses proposed in the BIT. The Americans want dispute resolution according to their laws and in their courts.
“Indians will never accept this condition,” a former chief of the SITE Association of Industry remarked adding that a compromise approach to this clause was to follow international practices for appointment of arbitrator and resolution of bilateral disputes.
Pakistan and US are engaged in discussions on signing a BIT for more than two years as it is considered a step towards concluding the Free Trade Agreement (FTA). Pakistan proposed an FTA with US when Razzak Dawood was the commerce minister.
Business leaders in Karachi are somewhat disappointed that a team of the Washington-based US Pakistan Business Council is not coming to Pakistan. It was expected that the council’s team will reach Pakistan a day or two earlier than President Bush arrival. The council is attached with the US Chambers of Commerce and was expected to talk to the leaders of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
“We have received no information so far about the arrival of a team of the business Council,” FPCCI President Chaudhry Saeed informed Dawn by telephone from Mirpur in Azad Kashmir.
The FPCCI leader also wants early conclusion of the BIT which, he said, is a step towards the FTA.
Mirza Ikhtiar Baig, the former chief of the SITE Association of Industry said that the trade between two countries was steadily increasing. A real quantum jump will come if Pakistan gets meaningful access to the US market.
Majyd Aziz, also a former SITE body chief, said that the Pakistani negotiators should seek relief on tariff for Pakistan’s imports into the US.
At present, there are more than 55 American companies operating in Pakistan and are members of the American Business Council (ABC). With about 38 per cent share in the foreign direct investment, the American companies operate in pharmaceuticals, oil and gas, agricultural and services sector. Almost, all of these companies have been making good money in Pakistan for last several years.
Early this month, President Bush gave waiver on exports to Pakistan that was clamped down after military takeover in Pakistan in 1999. Pakistan’s name has also been removed from the ‘watch list’ in January after promulgation of the Intellectual Property Right (IPR) law when Prime Minister Shaukat Aziz visited the US.
The two-way trade volume between Pakistan and the US has increased significantly from $3.35 billion in 2002-03 to more than $5 billion in the year 2004-05.
Pakistan’s exports to the US have increased from $2.61 billion in the year 2002-03 to about $3.45 billion in the year 2004-05. The US imports doubled from $735 million to $1.56 billion. In all these three years Pakistan maintained a surplus trade balance.
Businessmen expect some trade relief measures for Pakistan if the US apply some curbs on Chinese imports.
