logo logo

Signing of BIT likely on 20th: Access to US market

Dawn (Pakistan), 4 January 2006

Signing of BIT likely on 20th: Access to US market

By Ihtasham ul Haque

ISLAMABAD, Jan 3: Pakistan is seeking additional $2 billion market access from the United States and the issue is likely to be finalized after both the countries conclude their much awaited Bilateral Investment Treaty (BIT) here on January 20.

Official sources told Dawn on Tuesday that a high-powered US delegation is arriving here on January 18 to hold final round of talks with the Pakistani authorities to finalize the BIT, in the absence of which, Washington was unprepared to sign Free Trade Agreement (FTA) with Pakistan.

Pakistan was looking for additional market access for further export of its textiles, garments, leather and many other value added products with a view to increasing its exports to the United States from $3.4 billion to $5.4 billion in near future.

The sources claimed that the government has eventually succeeded in convincing the Bush Administration to hold talks on offering more market access to Pakistan. Earlier, the US government was taking the plea that it would not take up the issue to finalize FTA, unless BIT was signed in order to grab maximum concessions and guarantees for the American investors in Pakistan.

Sources said that since there had been progress on various political and diplomatic issues between the two countries, the US government now looked favourable to offer increased market access to Pakistan after the signing of the BIT. Commerce Minister Humayun Akhtar Khan is believed to have convinced the concerned US officials to hold talks with Pakistan over the issue.

Nevertheless, sources warned that Pakistan will have to carefully negotiate and conclude BIT with the United States as Washington was bent upon introducing harsh clauses in the proposed draft so that in case of litigation, US investors should enjoy certain advantageous position. The United States had earlier signed BIT with about 40 countries including special trade agreements with Canada and Mexico. “And in case of litigation, those countries always suffered financially who concluded BIT and FTA with the US government”, a source said adding that Pakistan will have to carefully negotiate the issue with the US team which will remain here from 18 to January 20, 2006.

In the past there was no breakthrough in signing FTA with the United States as it linked the issue with the conclusion of BIT and was reluctant to accommodate Pakistan’s reservations over the issue.

Pakistan had been given the final text of the BIT duly approved by the US Congress and the Bush administration did not want any change in it. Islamabad, sources said, was told that it was a final text and Pakistan should accept it as was accepted by Singapore, Uruguay and many other countries.

The US has proposed a “confidentiality agreement” in the proposed BIT text which Pakistan argued needed to be changed and that it should be made open so that the investors should not have apprehensions about it.

 source: Dawn