09.18.13

TPP Agreement Negotiations and Tobacco

By | Leave a Comment

tradeThis post was written by Uma Jatkar, Research Assistant, Global Health LL.M. ‘13, at the O’Neill Institute for National and Global Health Law. Any questions or comments about this post can be directed to uj11@georgetown.edu.

The proposed Trans-Pacific Partnership (TPP) Agreement is the latest multilateral free trade agreement that seeks to reduce barriers to trade and investment amongst signatories. Twelve countries will take part in round 20 of negotiations in Washington DC beginning on 18 September, including the United States and Asia-Pacific rim countries.[1] Vice President Joe Biden has said ‘The Trans-Pacific Partnership is perhaps the most ambitious trade negotiation underway in the world… Our goal is for high standards for the Trans-Pacific Partnership to enter the bloodstream of the global system and improve the rules and norms.’[2]

Similar to other free trade agreements, the TPP Agreement seeks to go beyond legal protections outlined in the WTO agreement infrastructure and the Framework Convention on Tobacco Control (FCTC), leaving the path open to increased public health harms from tobacco. Amongst mounting concern that protections for public health may be undermined by the effect of implementing the TPP Agreement, Malaysia tabled a proposal for a carve out of tobacco at the last round of negotiations in Brunei, sparking much commentary as to whether tobacco should be treated as any other good under an international free trade regime.

Background

The WTO legal infrastructure contains a number of provisions that seek to preserve space for states to regulate in the interests of public health. Article XX(b) of the General Agreement on Tariffs and Trade (GATT) states that countries can take trade restrictive measures if, inter alia, they are necessary to protect human health.[3] In addition, the Doha Declaration adopted by the WTO Ministerial conference in 2001 reaffirmed flexibilities in the TRIPs Agreement, and stated ‘the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health’.[4] In addition to WTO protections, 179 countries have signed the Framework Convention on Tobacco Control (FCTC) that entered into force in February 2005. The FCTC outlines legal rules that govern the production, sale, distribution, advertisement, and taxation of tobacco in order to “to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke”.[5] The Preamble also recognizes that signatories give priority to their right to protect public health.

Treatment of tobacco products

The objective of the proposed TPP Agreement seeks to remove barriers to trade in goods and services, including the trade of tobacco, and to remove obstacles to certain types of tobacco promotion such as restrictive packaging and labeling requirements. The removal of such barriers is a clear win for tobacco companies, who have long faced declining sales and restrictions around tobacco marketing, packaging and labeling in countries such as the United States and Australia. Tobacco is proven to be both highly addictive and highly profitable, thus encouraging lower prices for tobacco through competition can increase uptake and prolong tobacco use, particularly by young users. The increasing cost of tobacco has been proven to be an incentive to quit tobacco use, and thus important provisions within the FCTC will be compromised by removing important restrictions around tobacco.

The United States and Malaysian approaches

Early indications from the United States negotiators suggested there was support for examining tobacco as a special class of good. In May 2012 a USTR draft proposal would have allowed public health authorities in proposed TPP signatory countries to adopt regulations that “impose origin-neutral, science-based restrictions on specific tobacco products/classes in order to safe guard public health’[6] However some Members of Congress voiced concern that US tobacco manufacturers would be compromised in seeking export markets in other TPP countries. Business and industry groups also argued against a specific exemption for tobacco, arguing it would undermine the US government’s assertion that there is sufficient flexibility for governments who have already signed earlier FTAs to promote public health regulations. Industry was also reluctant to include product-specific language in proposed exemptions to the TPP Agreement.[7]

 As a result, the US tabled a modified proposal at the Brunei meeting urging that there be no special exemption for tobacco products. Rather, a specific cross-reference was made to Article XX(b) of the GATT, allowing countries to implement general health regulations. In contrast, Malaysia put forward a proposal seeking a direct ‘carve-out’ for tobacco products effectively exempting such goods from the provisions of the proposed TPP.[8]This would have the advantage of potentially avoiding litigation around trade and health regulations that may be challenged by big tobacco companies – currently a tactic being used against countries such as Australia and Uruguay within the WTO regime and bilateral investment treaties.

The Malaysian proposal, and the notion of a carve-out for tobacco, has received support from inside the United States, including from Mayor Bloomberg and the New York Times.[9] There are suggestions that certain countries such as Japan may also tacitly support Malaysia’s position.[10] Prior to the resumption of negotiations on 18 September 2013 in Washington DC, informal meetings are continuing to attempt to resolve the approach to tobacco. Commentators have suggested several approaches, including support for a carve-out for tobacco, or the possibility of direct reference to the FCTC within the text of the TPP Agreement.[11] What is clear is that providing another potential avenue for litigation by tobacco companies through the proposed TPP Agreement if tobacco is treated as any other good, and easing of restrictions on packaging and labeling, will only see an increase in tobacco related harm and mortality internationally.

[1] These include Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam

[2] Vice President Joe Biden, April 5 2013 quoted in Congressional Research Service ‘The Trans-Pacific Partnership Negotiations and Issues for Congress’ 15 April 2013  http://www.fas.org/sgp/crs/row/R42694.pdf

[3] https://www.wto.org/english/docs_e/legal_e/06-gatt_e.htm

[6] Office of the United States Trade Representative, “Fact Sheet: TPP Tobacco Proposal,” May 2012 reported in footnote 2 above.

[7] http://www.oneillinstitutetradeblog.org/wp-content/uploads/2013/08/letter-to-Ambassador-Froman-opposing-inclusion-of-product-specific-language-in-TPPs-general-exceptions1.pdf

[8] http://www.ipsnews.net/2013/09/u-s-malaysia-skirmish-over-free-trade-tobacco/

[10] http://www.ipsnews.net/2013/09/u-s-malaysia-skirmish-over-free-trade-tobacco/

[11] http://www.tobaccofreekids.org/press_releases/post/2013_06_25_trade, and http://www.oneillinstitutetradeblog.org/

Posted in uncategorized ; Tagged: , , , , , , , , , , , , .

Comments are closed.

Stay Informed

Signup for our mailing list and stay up to date on the latest happenings at The O’Neill Institute

Or sign up for our RSS Feed

The views reflected in this blog are those of the individual authors and do not necessarily represent those of the O’Neill Institute for National and Global Health Law or Georgetown University. This blog is solely informational in nature, and not intended as a substitute for competent legal advice from a licensed and retained attorney in your state or country.

See the full disclaimer and terms of use.