US commerce secretary rules out TIFA with Pakistan
ISLAMABAD: Signing of a Trade and Investment Framework Agreement (TIFA) between Pakistan and the United States has been put on the back-burner since America has become the largest export market for Pakistan with a volume of $3.7 billion, said US Secretary of Commerce, Penny Pritzker on Tuesday.
A key member of President Obama’s economic team, Ms Pritzker was speaking at the third Pakistan-United States Business Opportunities Conference held in the capital.
Finance Minister Ishaq Dar, Commerce Minister Khurram Dastagir Khan and US Ambassador Richard Olson were also present on the occasion.
The event brought together American and Pakistani businessmen seeking to explore trade and investment opportunities.
The conference is focused on energy, agriculture, infrastructure, information and communication technology, textiles, apparel, surgical instruments and footwear/leather sectors. The first two events were held in London and Dubai, respectively.
“It is hard to pass new trade legislation right now in the US. Instead we are focusing on business-to-business connections, access to financing and support to entrepreneurship,” Ms Pritzker said.
She said the volume of bilateral trade stood at $5bn, and both governments were committed to removing hurdles. She added that some legislative impediments are still stuck in the Congress.
On the occasion, she said: “While the Pakistan government is currently engaged in focusing on energy issues, it should also focus on making the taxation structure more predictable and reliable for companies operating in Pakistan, improving access to companies and making sure that contracts are enforceable.”
On Pak-China trade, the US official said that Pakistan should find markets in China for its goods and services. “It is good for Pakistan and we want to see it stronger economically. A more secure Pakistan is better for all of us,” she remarked. The US commerce secretary said that Pakistan offered enormous business opportunities to US investors. She added that American companies invested over $1.3bn over the last seven years.
“However, to realise the potential for economic relationship, Pakistan must address some of the challenges that US companies face when it comes to entering the market. Security is the first issue. Many companies reported to the US government about the bureaucratic procedures in Pakistan which are complex, arbitrary and unpredictable,” she commented.
“We have told government leaders that the contest for global capital is increasingly competitive, and if the situation is not improved, businesses will seek opportunities in other markets,” she added.
Referring to a leading US beverage company, she said that it planned to enhance its investment over the next three year period and expand production facilities in Islamabad, Multan and Karachi. The firm will also set up a water purification plant in Pakistan.
“There are almost 85 US business companies operating in Pakistan, and they do not believe in ‘coming and going’, rather they want long term constructive partnerships in Pakistan,” the US official said.
Govt for energy, infrastructure deals
At the conference, Finance Minsiter Ishaq Dar and Commerce Minister Khurram Dastagir Khan said the government has identified three areas – energy, infrastructure and agriculture sectors – for possible US investment.
The delegates were informed about the performance of the macro-economic indicators especially in the current fiscal year.
Highlighting Pakistan’s banking regulations, Mr Dar said that the rules were liberal and allowed repatriation of equity, profits and dividends to foreign investors.
Likewise, the Board of Investment provides one-window facilitation to foreign investors while the Federal Board of Revenue has a facilitative taxation and customs regime.
On the occasion, the commerce minister highlighted that Pakistan has signed agreements on “Avoidance of Double Taxation” with 52 countries.
“This coupled with low corporate tax rates and a cost of doing business which compares quite favorably to its peers in the region, makes Pakistan an attractive destination for foreign investment,” he said.
