ISLAMABAD, Sept 6: Pakistan and the United States will hold the fifth round of negotiations on the draft Bilateral Investment Treaty (BIT) early next month in a bid to develop consensus on the remaining disputed clauses of the agreement.
Officials told Dawn on Wednesday that a high-level delegation led by the assistant United States Trade Representative (USTR) would arrive here in the first week of October to negotiate the treaty for its early finalisation.
A high-level meeting headed by Prime Minister Shaukat Aziz was held here on Wednesday to finalise Pakistan's position on the treaty. The meeting was attended by all the relevant stakeholders.
According to the officials, the BIT was expected to be concluded in March 2006 during the visit of US President George W. Bush to Pakistan, but due to failure of the two sides to develop consensus at the technical level on some clauses of the agreement, it was deferred.
The issues to be discussed in the upcoming meeting included the definition of some key terms, scope of the treaty, effective implementation of intellectual property rights (IPRs) laws in Pakistan, extent of indirect expropriation and compensation mechanism, the non-confirming issues, taxation and tariff on US investment and regulatory issues, extent of subjects for arbitration and performance requirements in the light of the World Trade Organisation, added the officials.
Meanwhile, Board of Investment (BoI) secretary Jahangir Bashir, who has been negotiating the treaty with the American negotiators for the last two years, has been transferred and posted as secretary education.
A source at the BoI on condition of anonymity told Dawn that the secretary did not show any flexibility on those harsh clauses despite pressure, which were against the national interest and would have serious implications for the country following the implementation of the agreement. “This led to his transfer before the commencing of the next round of talks, which seemed to be the final one to conclude the agreement,” added the source.
The US in its recent report appreciated Pakistan’s efforts to strengthen the enforcement of intellectual property rights and hoped that it would be further strengthened. The report said that much progress had been made in narrowing the differences on various clauses of the BIT. The negotiations on BIT started in 2004.
Key investor protections in the US BITs include an obligation by a host country to treat investors from the other BIT party as favourably as the host treats its own investors or those from any other country. BIT parties must also permit the free and timely transfer of funds relating to an investment into or out of their territory.
The US BITs also include international law standards requiring host countries to provide prompt, adequate and effective compensation if they expropriate an investment. Finally, the US BITs give investors the right to seek binding international arbitration of claims that a host country government has violated a BIT obligation or certain types of contracts.