While good news for tobacco control, it is important to note that other important health regulations are not likely to be given similar treatment. The necessity of a carve out for tobacco control shows that health laws are extremely vulnerable to corporate abuse of investor-state dispute settlement provisions.
Tobacco Carve-Out in TPP, Major Victory for Public Health
Removes New Weapon for Tobacco Industry
WASHINGTON, DC – Monday, October 5, 2015 – In a major victory for public health, negotiations for the Trans-Pacific Partnership (TPP) Agreement concluded this morning with built-in protections to prevent private corporations from suing governments over anti-tobacco regulations. The victory comes after years of pressure from a vast coalition of health groups and pro-health legislators, including Action on Smoking and Health (ASH), to protect the right of governments to regulate tobacco without fear of expensive lawsuits. The tobacco industry, along with its allies in the U.S. Chamber of Commerce and other groups, fought hard to ensure that overseas marketing of tobacco products – the only consumer product to kill when used as intended – could continue unabated.
“We would have preferred a blanket exemption for tobacco in the Agreement, denying increased rights for the tobacco industry across the board,” said Laurent Huber, Executive Director of Action on Smoking and Health. “However, ISDS was the most worrisome aspect of the TPP, and now the tobacco industry cannot use it to block or delay life-saving measures.” Malaysia proposed just such a full carve-out for tobacco, but ultimately could not achieve full consensus.
The carve-out represents a sea change in the U.S. stance on tobacco and trade. When TPP negotiations began in 2008, the office of the United States Trade Representative insisted that no product should be singled out for special treatment, whatever the damage to the public. Under pressure from health groups, the U.S. offered a so-called “safe harbor” proposal in 2012, which paid lip service to the unique nature of tobacco but did little to legally protect regulations from trade lawsuits. A year later, U.S. negotiators backed away from even this small step after a concerted campaign by the Chamber of Commerce and pro-tobacco legislators.
Last week in the final round of negotiations, the U.S. formally proposed an exemption in the investor-state dispute settlement (ISDS) mechanism for tobacco products, effectively blocking the tobacco industry from launching trade disputes under the TPP. The proposal was agreed to by the other 11 countries.
The TPP, if ratified by the twelve nations involved, will become the world’s largest free trade agreement, incorporating about 40% of the global economy. Once submitted, the U.S. Congress will have 90 days to consider the Agreement. Earlier this year, Congress granted the Obama Administration Trade Promotion Authority, or “fast-track,” which means that Congress cannot offer amendments but must vote the Agreement up or down. A small number of pro-tobacco legislators have vowed to try to kill the Agreement over the tobacco carve-out.
The tobacco industry has a long history of using costly litigation to inspire “regulatory chill,” or a fear among governments that enacting tobacco control measures will be too expensive to defend. As ISDS mechanisms in trade and investment agreements have multiplied, Big Tobacco has become an eager user. One of the Parties to the TPP, Australia, is in the midst of an ISDS challenge launched by Philip Morris International over its implementation of plain packaging for tobacco products. Several other countries have held off on plain packaging due to the likely legal costs. The TPP is the first major trade agreement to carve-out protections for tobacco measures.
In spite of a global treaty to address tobacco – the WHO Framework Convention on Tobacco Control – trade ministries have continued to treat tobacco products like any other commodity, working to increase consumption while health ministries have struggled in the opposite direction.
“We can’t end the tobacco epidemic unless we’re all rowing in the same direction,” said Alfred Munzer, Chair of Action on Smoking and Health. “The language in the TPP is a stroke in the right direction.”