Pakistan reverses move to end investment treaty with Sweden

Pakistan reverses move to end investment treaty with Sweden

Pakistan has decided to retain its Bilateral Investment Treaty (BIT) with Sweden following the federal cabinet’s intervention, after an earlier termination notice reportedly displeased Prime Minister Shehbaz Sharif.

The cabinet has ordered an investigation into the circumstances surrounding the notice, including who authorized it and what grounds prompted the move to terminate the agreement.

It also directed the formation of a Committee on Bilateral Investment Treaties to examine the reasons for the decision and review the approval process followed before issuing the notice to Sweden.

The committee will develop guidelines to prevent similar situations in the future and assess the potential consequences of terminating investment treaties with 25 countries under Pakistan’s Bilateral Investment Treaty Strategy 2021.

It will also evaluate whether the 2021 BIT Strategy and Pakistan’s Model Bilateral Investment Treaty Template remain relevant to the changing global economic landscape. The committee is tasked with drafting a new BIT policy covering investment protection, most-favoured-nation (MFN) provisions, fair and equitable treatment standards and dispute resolution mechanisms.

Separately, Federal Minister for the Board of Investment Qaiser Ahmed Sheikh met Swedish Ambassador Alexandra Berg von Linde to discuss stronger economic ties, greater investment cooperation and new business opportunities for Swedish companies in Pakistan.

Sheikh highlighted the longstanding friendly relations between the two countries and pointed to Sweden’s expertise in education, governance, technology and innovation. He said both sides could expand their economic partnership through increased investment, technology transfer and business-to-business cooperation.

Ambassador Linde also emphasized the longstanding links between the countries, highlighting the active Pakistani diaspora in Sweden and growing interest among Pakistani students in Swedish higher education. She said these connections offered further opportunities for people-to-people exchanges and institutional cooperation.

The meeting noted that more than 40 Swedish companies, including Ericsson, IKEA, H&M and Tetra Pak, operate in Pakistan. Their presence across information and communication technology, retail, consumer goods and packaging reflects an established commercial relationship with considerable scope for further expansion.