August 22, 2013 7:51 pm

Tobacco proposal for TPP trade talks sparks backlash

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The Obama administration is facing a furore over its latest tobacco proposal in trade talks with 11 Pacific Rim countries, with critics charging it will boost smoking in the region and business groups fighting back.

Michael Froman, US trade representative, brought a new offer on tobacco to the 19th round of talks on a Trans-Pacific Partnership agreement starting today in Brunei, in the hope of clearing one sticking point in the negotiations.

The US plan – as in many trade agreements – includes the right of countries to protect their citizens’ health without violating trade rules, but it also adds a reference to tobacco restrictions as being eligible for that exception.

However, groups campaigning against tobacco use around the world say it falls short of a specific carve-out that would quash legal challenges against tough tobacco laws. They argue it marks a shift from a more confrontational stance against multinational tobacco companies in TPP adopted earlier in Barack Obama’s presidency, when the USTR did support a more aggressive “safe harbour” for tobacco.

“It’s a reaction to a strong industry backlash and also a backlash from tobacco senators and congressmen,” said Chris Bostic, deputy director of policy at Action on Smoking and Health, an anti-tobacco group based in Washington.

In a statement, Mr Froman sought to defend the US tobacco proposal, saying it came after “extensive consultations” with Congress and stakeholders such as health groups, and farmers. “This proposal will for the first time in a trade agreement address specifically the public health issues surrounding tobacco  . . . while remaining consistent with our trade policy objectives of negotiating a comprehensive agreement that does not create a precedent for excluding agricultural products.”

US officials are proposing a mandatory summit of health authorities if a country’s tobacco regulations are legally challenged. But anti-tobacco groups say this will not be sufficient to prevent lawsuits against countries that in some cases – particularly less-developed TPP nations – may not have the means to fight them.

“Our main concern is the tobacco industry has for a couple of decades now shown a willingness to drag governments into court over tobacco measures even when they don’t have a strong legal case, and the idea is they impose an economic cost on developing country governments for implementing strong tobacco control. It creates legal chill,” says Mr Bostic.

US business lobby groups said in a letter to Mr Froman yesterday they were “very troubled” by the proposal and urged him not to propose it in Brunei.

“We believe this text will undercut longstanding US insistence that regulatory measures be based on evidence, including sound science, and encourage other countries to propose additional product-specific references,” the business groups wrote.

Another element of the tobacco dispute in TPP is that tariffs would be slashed on cigarettes in many countries, potentially leading to cheaper cigarettes. But that could be offset by higher excise taxes.

The fight over tobacco comes against a backdrop of friction on other public health issues in TPP, most notably the US push for stronger patent protections on drugs, which some developing countries worry would restrict their citizens’ access to cheap medicine.

Negotiators including trade ministers are aiming to make significant progress in the talks in Brunei in order to stay on track for the conclusion of the TPP talks – which as of last month includes Japan – by the end of the year.

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