ISLAMABAD, Jan 12: The visiting US Secretary of State for South Asia and Central Asian Affairs, Mr Richard Boucher, has said a lot of progress has been made to sign the Bilateral Investment Treaty (BIT) soon between the two countries.

Speaking at a news conference on Friday, he said he had discussed the signing of BIT with Pakistani officials and informed that the US government was taking steps for an early decision on the issue to help the investors of both the countries.

"This treaty will be concluded soon," he assured, adding that the US government was currently going through various technical issues with a view to sign it as early as possible.

Similarly, he said that the establishment of Reconstruction Opportunity Zones (ROZs) was likely soon on the border areas of Pakistan and Afghanistan to provide duty-free access to various products into the US.

The US Congress, he said, was likely to decide the issue in a couple of months after which these Zones will be set up on both sides of Pakistan and Afghanistan.

He said his country was providing necessary economic assistance to both Pakistan and Afghanistan.

About the BIT, he said that the US had decided in principle to sign the treaty as it would extensively help forge further trade and economic cooperation between the two countries.

According to informed sources, both sides have softened their stand over the proposed BIT and that US had eventually accepted that the "judicial and legislative actions" of Pakistan should not be allowed to be challenged in any international court of law.

The US side, they said, have conceded to differentiate between the "bad faith and the error of judgment" and that the decisions announced by superior courts of Pakistan would not be challenged without any legitimate justification.

In return, Pakistan has accepted that the treaty will be applied with retrospective effect, meaning that anything pertaining to the existing American investment could also be challenged.

Pakistan, in this regard, has assured the US government that it would be obligatory upon Pakistan to give compensation to the US investors in case of their dispute which has not been settled. One of the cases in point was the dispute that erupted a few years ago over the opening of a US restaurant chain - McDonald in Lahore.

Sources said that Pakistan had also subdued to American pressure to accept additional forums other than International Centre for Settlement of Disputes (ICSD) to deal with arbitration clauses. The US side maintained that since a number of rules of ICSD were needed to be upgraded, other centres for dispute resolution should also be considered.

The US side was insisting on having more than one international forums to settle investors disputes, while Pakistan wanted only the ICSD. Also, Pakistan wanted the US investors to exhaust the local remedy in Pakistani courts before opting for any international forum in case of any dispute.

Pakistan had also argued that there would be a wastage of time and money to also approach other dispute resolution centres and that let the ICSD alone be approached in case of any dispute.

"But we have now given up this stance and all these issues could pave the way for early signing of the treaty," a concerned official said. However, he said he was not in a position to give any tentative date for the signing of the much delayed BIT.

He said a decision had also been taken that all the rounds of talks that have, so far, held between the two sides would form part of the treaty while interpreting any dispute in any international court of law.

"This will be termed as the negotiations history at the time of any dispute before any court of law," the official said, claiming that "major hurdle" in the way of signing the treaty has been removed.

But the US Assistant Secretary of State for South Asia and Central Asia, Mr Boucher, when visited Pakistan earlier this month had stated that there were some "serious technical problems" which were blocking the signing of the treaty.

Another source said that Pakistan has succeeded in convincing the US officials to change their draft law on BIT for signing of the proposed treaty.

"In many previous rounds of talks, the US side used to say that since this draft on BIT has been approved by the American Congress, there could be no change in it. But eventually they (Americans) had accepted our point of view on it," he said.

"We had told the Americans that if they are coming with a prepared mind to continue insisting on the acceptance of draft law approved by their Congress, we are afraid it would not be possible to sign this treaty," he said.

Both sided, he said, have conceded to remove their differences over BIT and that one should now hope that it will be signed in near future. Nevertheless, he too did not like to give any timeframe for the signing of the treaty.