Summary BIT between Pakistan and the US has been delayed due to financial and defence related issues.
ISLAMABAD: The much-needed seal of Bilateral Investment Treaty (BIT) between Pakistan and the United States (US) has been delayed due to financial and defence related issues which were yet to be work out, sources say.
The seal was earlier expected to be signed during on going financial year 2012-13 but now it has been delayed for unspecific period. A high level official of Board of Investment (BOI) told this agency that international agreements were not taken place over night as it was time taking process which may take decades.
“Pakistan does not seem that the Bilateral Investment Treaty between both countries could be sealed during current financial year 2012-13 as there were many financial and defence related issues which were yet to be sort out,” said the official.
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.
Chairman Board of Investment Saleem H.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.
