PAKISTANI MEDIA AND GOP ATTITUDES TOWARD THE BIT

C O N F I D E N T I A L ISLAMABAD 003933

SIPDIS

E.O. 12958: DECL: 12/22/2018
TAGS: EINV EFIN ENGY ECON PGOV PREL PK
SUBJECT: PAKISTANI MEDIA AND GOP ATTITUDES TOWARD THE BIT

Classified by Anne W. Patterson, reasons 1.4 (b),(d)


1. (C) SUMMARY: A recent article in the Pakistani press has
criticized the Bilateral Investment Treaty (BIT) as "one-sided" and
"in favor of U.S. investors" only. The article presents some
misconceptions about the BIT and was refuted by a Ministry of
Investment official. Five outstanding issues need to be resolved or
they will continue to delay the conclusion of the BIT negotiations.
Secretary General Salman Farruqui said that high-level negotiations,
requiring the involvement of the new administration's U.S. Trade
Representative, would be required to resolve the issues. It is thus
unlikely that the BIT could be concluded before the end of the
current administration. End summary.

MISLEADING ARTICLE
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2. (SBU) A local Pakistani newspaper, Dawn, ran an article on
December 22 which mischaracterized the ongoing negotiations for the
BIT between the U.S. and Pakistan, quoting anonymous officials. The
author wrote that the BIT is "one-sided tilted entirely in favor of
U.S. investors." In addition, the author quotes an unnamed expert
stating that "the kind of concessions they (Americans) are seeking
should not be given."


3. (SBU) EconOff spoke with Mr. Kosar Zaidi, Director Legal and
International Agreements of the Ministry of Investment who denied
that the article reflected the views of the government. He remarked
that the author, Mubarak Zeb Khan, based his articles on "old
documents." Mr. Zaidi commented that the GOP is ready to negotiate
and conclude the BIT agreement. However he noted that there are some
lobbies, which he refused to name, that are resisting the signing of
a BIT between Pakistan and the United States.


4. (SBU) Post is drafting a response letter to the editor of Dawn
which seeks to clarify the purpose of the BIT and its potential
benefits for Pakistan.

OUTSTANDING ISSUES
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5. (SBU) There are five outstanding issues that remain to be resolved
in order to finalize negotiations for the BIT. These issues concern
dispute settlements, recovery of damages, arbitration procedures,
scope of the BIT to extend to the judiciary and transparency of BIT
laws and procedures.

GOP WANTS MORE NEGOTIATIONS FIRST
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6. (C) In a meeting with the DCM on December 23, Secretary General
Salman Farruqui said that the GOP was "very keen" on signing the BIT,
but that some issues still needed to be resolved. He stated that the
experts thought that more negotiations were needed and he himself was
of the opinion that these would have to be high-level negotiations in
order to make progress as the working level had reached a "dead end."
He anticipated that a new round of discussions would therefore need
to await the appointment of a new U.S. Trade Representative.
Farruqui expresed interest in President-elect Obama's trade views and
wondered whether the BIT would be able to move forward based on its
current format.

COMMENT
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7. (C) GOP officials have indicated to post on multiple occasions
that they are very interested in completing the BIT negotiations and
signing the Treaty. Nonetheless, it is clear that they are unwilling
to sign the March 2006 version of the BIT as it stands without
addressing the outstanding issues. The newspaper article, Zaidi's
intimation that there are certain elements opposed to the BIT, and
Farruqui's statements on the need for renewed high-level negotiations
make it clear that although the GOP is interested in concluding a
BIT, it will not happen before the end of the current Administration.
End comment.

PATTERSON