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US committed to signing investment treaty

October 23, 2012

ISLAMABAD, Oct 23: The United States is committed to signing a Bilateral Investment Treaty (BIT) with Pakistan and is prepared to sign it immediately as “the treaty is a tangible representation of our commitment to trade, not just aid,” a senior official of US Embassy said here on Tuesday.

Speaking to a group of newsmen, Robert Ewing, Counsellor for Economic Affairs of US Embassy in Islamabad said that the United States respected Pakistan’s internal consultations to reach on the consensus, however “we are concerned by the delay,” he said.

Pakistan and the United States have initialled the main text of the treaty in March this year, and concluded negotiations on BIT in Islamabad in August, and the way talks progressed, high hopes had been raised for signing of the treaty in New York in September during the visit of President Asif Zardari.

When contacted, a senior official of the Board of Investment confirmed to ‘Dawn’ that negotiations with US on the treaty have been completed and presently draft of the treaty is going through internal review. BoI is making efforts to build consensus on the treaty by all stakeholders, he said.

About timeframe for the signing of BIT, sources in BOI believe that the treaty could be signed before the end of present government’s tenure. The present US administration also desires that the two countries sign the treaty before the end of December this year, sources said.

Sources said that the internal review by the Pakistan government mainly relates to the non-conforming measures (NCM), on which there are difference in opinion by various stakeholders.

It is the stance of US government that all bilateral investment treaties allow for an “essential security” exception. The “essential security” article in BIT gives Pakistan very broad authority to undertake any measure it considers necessary to protect its security interests.

This article gives assurance that the bilateral investment treaty respects national security policy and actions. The US negotiating team has already agreed to an Annex-II non-conforming measure exception for the atomic energy sector.

According to Mr Ewing, US would welcome a written description of Pakistan’s concerns on the BIT, which the US negotiating team would be pleased to discuss in Washington or London, or via digital video conference at a mutually agreed upon date.

As the text has been initialled, the purpose would be to discuss the content and operation of the agreement, not to re-open the text, the US Embassy official explained.

Mr Ewing said the United States believe that BIT would signal that Pakistan is open for business, leading to greater investment, and more jobs. BIT would demonstrate Pakistan’s commitment to the rule of law, transparency and other policies that support a welcoming investment climate.

Greater investment in Pakistan would create more jobs in Pakistan as the treaty would also help the country be more competitive in the global market.

The US official, who was part of the US delegation to the US-Pakistan Investment Conference concluded in London early this month, spoke of positive outcomes of the conference particularly in the textile sector. He said Pakistani textile manufacturers can take advantage of the US GSP programme to enter the US market. However, he said that signing of the BIT would be an important ingredient to expanding US-Pakistan trade and investment relations.He said that the US-Pak two-way trade is already very strong and trade surged to $5 billion in 2011. US buys more of Pakistan’s exports than any other country, he said by concluding that over 20 per cent of Pakistan’s exports go to the US.