After negotiating for over eight years, Pakistan and the United States will seal Bilateral Investment Treaty (BIT) on the sidelines of upcoming United Nations General Assembly session, said Board of Investment (BOI) Chairman Saleem Mandviwalla here on Friday.
To resolve the remaining procedural issues, a six-member US delegation is also arriving in Islamabad, according to an announcement made by the BOI Secretariat. The UN General Assembly session will take place next month.
The US team will hold negotiations with Pakistani authorities from August 27-28 to resolve issues of considerable importance and conclude BIT, it added.
The US and Pakistan are again looking to resume dialogue on various issues including energy, investment and trade after resumption of Nato supplies. Pakistan had blocked Nato shipments after the killing of its 24 soldiers in an air attack by US forces in November last year.
Talks on BIT started in 2004 and continued until 2006 but many issues remained unresolved. The biggest stumbling block was arbitration rules in case of any dispute.
After a five-year deadlock, the BOI took the initiative to restart the negotiation process in 2011. According to the BOI, consultation with local stakeholders also picked up momentum to firm up Pakistan’s position on different issues.
In March this year, Pakistan and US initialled the treaty and continued to discuss non-conforming measures (NCMs), which will be attached with the treaty text as its integral part.
The US is the largest investor in Pakistan and conclusion of BIT will deepen economic and investment relations. BIT is a commitment to reciprocally promote and protect investment, thus Pakistan’s investment in the US will also be reciprocated under international law and covenants, said the BOI.
It added Pakistan is confident that the two-day discussions will resolve all outstanding issues, paving the way for signing the treaty as scheduled.
Mandviwalla expressed the hope that BIT will lead to Free Trade Agreement (FTA) between the two countries, resulting in market access and increase in exports to the US markets and more investment from the US.
Both the countries have already signed draft of the treaty earlier this year, triggering criticism and accusations that the BOI had sold the country’s interests.
However, the BOI defended its position, claiming that the US has agreed to a dispute resolution mechanism where local remedy will be sought first before opting for a state-to-state resolution or taking the matter to the international court of arbitration.
For the last three years, the US had not been willing to agree to take any disputed matter first to Pakistani courts.
Insiders claim that from the beginning, the US wanted to include the option of arbitration even after a decision of the Supreme Court.
According to recent decisions of the international court of arbitration, if the interest of an investor is harmed because of any of the reasons – a law, a judgment by a court or because of violation of treaty, the decision of the international arbitration will take precedent. The US is seeking extraordinary protection for its businesses including security, which has also been agreed.
Published in The Express Tribune, August 25th, 2012.
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.............and as before the people will be lucky to get 10% of this cake.
This is not likely to be treaty, but more of instructions !
I wish this report also discussed what's in the treaty and what its impact will be.
This treaty has a sordid history, as revealed in a Wikileaks cable: When US tried to force its terms for investment treaty