Clinton hails new US-Czech treaty a “priority”
United states Secretary of State Hilary Clinton has affirmed US commitment to a new bilateral investment treaty with the Czech Republic.
Speaking at joint press conference with Foreign Affairs Minister Karel Schwarzenberg, she expressed regret that this had not occurred earlier, “I regret that we’ve not been able to reach an agreement for 10 years with one of our closest friends, partners and allies,” she said. “But we are going to drive this process forward, and I’m putting everybody on notice, both in the State Department and in the rest of the United States government, this is a very high priority.”
The existing treaty is now viewed as unfavourable to Czech interests as it was agreed at a time of perceived instability in the country in 1991. The concessions made to assuage the fears of foreign investors are viewed as no longer applicable by the Czech government.
The loss of such concessions however are unlikely to be viewed favourably by investors. Abby Cohen Smutny, an international arbitration expert with White & Case feels that any investor chagrin will be compensated by improved goodwill, “the very point of bilateral investment treaties is that they remain in place and are enforced and often the goodwill engendered by these treaties outweighs the possible fallout of scrapping them”.
One possible sweetener might be the tender for two new reactors at Temelin -a deal worth 500 billion Kč and the biggest such project in Europe. Westinghouse is one of the main contenders and has already stated the problems in Fukushima should not delay a decision on the tender. A decision on this is expected in 2013, the bilateral treaty negotiations, however, are due to start in September this year.