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March 11, 2015

US trade secretary for enhanced business contacts with Pakistan

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March 11, 2015

ISLAMABAD: US Secretary of Commerce Penny Pritzker said on Tuesday that trade related legislation was stuck up in the US Congress and both the countries would have to explore the biggest opportunities for enhancing business-to-business contacts.
“The legislation for Trade and Investment Framework Agreement (TIFA) has been stuck up in Congress. The Generalised System of Preference (GSP) lapsed 20 months back as Congress has not acted on its approval,” the visiting US secretary of commerce said while talking to a select group of reporters here at the US Embassy.
On the much-awaited signing of Bilateral Investment Treaty (BIT), she said the US had developed a draft model for signing the BIT, which was handed over to the Pakistani side and now Washington was waiting for Islamabad’s response on it. When the visiting US secretary of commerce was told that the Pakistani side had also prepared its own draft for signing the BIT, she said she had not seen the Pakistani draft on this subject.
She said the US raised the issue of consistent taxation policies and provision of visa facility for the US companies operating in Pakistan. The protection of Intellectual Property Rights (IPR), she said, was always a matter of concern. To a query about abandoning the Reconstruction OpportunityTo a query about abandoning Reconstruction Opportunity Zones (ROZs) in tribal areas, the US Ambassador Richard Olson said that it did not muster required support in the US Congress, so the existing mechanism would be used to enhance bilateral ties. He reminded that the US was providing significant resources for Fata as John Kerry in his recent visit had committed to provide $250 million for IDPs of South and North Waziristan.
The US, he said, was providing assistance for Kurram Tangi dam and construction of 500 km roads in Fata.To another query about pursuing Pakistan to enhance trade ties with India, Pritzker said that the US always talked about promoting regional trade including ties with Afghanistan and India. The CASA-1000 MW project will connect electricity from Tajikistan-Afghanistan and Pakistan and the Nawaz Sharif government seemed serious to promote regional trade and US was encouraging this move.
Earlier, addressing the inaugural session of Pak-US Business Opportunities Conference, the US secretary of commerce said that the hesitation for many companies came down from persistent security concerns and risk for businesses was too great.
“The entire world was horrified by the terrible events of December 16 attacks at Peshawar school. We are encouraged by the security operations now underway, and support efforts from all parts of Pakistani society to eliminate the space for violent extremism. “I know that combating terrorism and building safer communities is a core priority for Prime Minister Sharif and the armed forces,” she added.
Beyond security concerns, she said, many companies have reported about bureaucratic procedures in Pakistan, which are very complex, arbitrary, and unpredictable.According to the World Bank’s “Doing Business 2015” survey, Pakistan is in the bottom 50 percent globally when it comes to the ease of starting a business, dealing with construction permits, regular access to electricity, property registration, access to finance, tax administration, and contract enforcement. “Even with local partners, foreign firms find that contracts and applications languish for weeks or months,” she said.
“I know that no issue is as frustrating to a US business as inconsistent and unfair taxation,” she said, adding that a lax commitment to fair and consistent tax collection was not only a problem for foreign investors; it created a serious fiscal problem for the Pakistani government as well. “A 10 percent tax to GDP ratio means there is not enough money to invest in education and healthcare; roads and bridges; power plants and new sources of fuel,” she said.She made it clear the contest for global capital is increasingly competitive, and if these issues are not improved, businesses will seek opportunities in other markets.