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AmCham suggests Hong Kong join Trans-Pacific Partnership

In submission to upcoming Policy Address 2016, chamber says city should consider participating in pact as non-sovereign party or observer

The American Chamber of Commerce suggests Hong Kong consider joining the Trans-Pacific Partnership and matching trading services within the pact to relevant areas under the mainland’s “One Belt One Road” initiatives.

The suggestion was made in the chamber’s submission to the upcoming Policy Address 2016, to be delivered by Chief Executive Leung Chun-ying next Wednesday.

The chamber said Hong Kong would benefit by adopting an international approach to capture opportunities offered by the mainland’s “One Belt, One Road” initiatives and the China-led Asian Infrastructure Investment Bank.

“AmCham submits that the government work closely with mainland authorities to elucidate the policy framework under which Hong Kong enterprises may participate,” it said.

Acknowledging Hong Kong’s role in linking up the region, the chamber suggests the city consider joining the TPP as a non-sovereign party or as an observer, and actively exploring the potential of matching trading services and goods within the pact to relevant areas under the “One Belt, One Road” initiatives.

The chamber’s submission includes recommendations on 10 policy areas, from Hong Kong-China relations, business climate, education and labour, to environment, financial services and intellectual property.

It welcomed the city’s being ranked as the freest economy for years, but said the government should be cautious of over-regulation that may hinder the city’s open and free market economy.

It also suggested that Hong Kong attract talent by raising the profile of vocational training, relaxing immigration provisions to allow mainland and overseas students to study in international business schools.

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TransCanada Sues the US for Rejecting Keystone XL; Will This Be the New Normal Under TPP?

On Wednesday, TransCanada Corporation filed a lawsuit in US federal court alleging President Obama’s rejection of the Keystone XL pipeline exceeded his power under the US Constitution. TransCanada also filed legal action under the North American Free Trade Agreement, or NAFTA, claiming the pipeline permit denial was “arbitrary and unjustified.” It’s seeking $15 billion as part of its NAFTA claim. TransCanada’s lawsuit comes just days before President Obama’s final State of the Union address, where he’s anticipated to tout his controversial Trans-Pacific Partnership, or TPP, deal. The secretive trade pact between the United States and 11 Pacific Rim nations could govern up to 40 percent of the world’s economy. After TransCanada announced its lawsuit on Wednesday, the group Friends of the Earth released a statement saying, “This is why Friends of the Earth opposes the Trans-Pacific Partnership and other trade agreements, which allow companies and investors to challenge sovereign government decisions to protect public health and the environment.” For more, we’re joined by Lori Wallach, the director of Public Citizen’s Global Trade Watch.


This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: TransCanada Corporation has sued the US government over its rejection of the Keystone XL pipeline. On Wednesday, it filed a lawsuit in US federal court alleging President Obama’s rejection of the pipeline exceeded his power under the US Constitution. TransCanada also filed legal action under NAFTA, the North American Free Trade Agreement, claiming the pipeline permit denial was, quote, “arbitrary and unjustified.” It’s seeking $15 billion as part of its NAFTA claim.

President Obama rejected the cross-border crude oil pipeline in November, after years of review and one of the most vocal grassroots campaigns this country has seen in decades. At the time, he said approving Keystone would undermine global efforts to stop climate change.

PRESIDENT BARACK OBAMA: America is now a global leader when it comes to taking serious action to fight climate change. And frankly, approving this project would have undercut that global leadership. And that’s the biggest risk we face: not acting. Today, we’re continuing to lead by example, because, ultimately, if we’re going to prevent large parts of this Earth from becoming not only inhospitable but uninhabitable in our lifetimes, we’re going to have to keep some fossil fuels in the ground, rather than burn them and release more dangerous pollution into the sky.
AMY GOODMAN: The Keystone XL pipeline would have sent 830,000 barrels of crude every day from Alberta’s oil sands to refineries on the US Gulf Coast. TransCanada’s lawsuit comes just days before President Obama’s final State of the Union address, where he’s anticipated to tout his controversial Trans-Pacific Partnership, or TPP, deal. The secretive trade pact between the United States and 11 Pacific Rim nations could govern up to 40 percent of the world’s economy. After TransCanada announced its lawsuit Wednesday, the group Friends of the Earth released a statement saying, quote, “This is why Friends of the Earth opposes the Trans-Pacific Partnership and other trade agreements, which allow companies and investors to challenge sovereign government decisions to protect public health and the environment.”

Well, Democracy Now! invited TransCanada to join us on the show today, but the company declined, citing pending litigation. In a statement, it said, quote, “TransCanada has undertaken a careful evaluation of the Administration’s action and believe there has been a clear violation of NAFTA and the US Constitution in these circumstances.”

Well, for more, we go to Washington, DC, where we’re joined by Lori Wallach, director of Public Citizen’s Global Trade Watch, the author of The Rise and Fall of Fast Track Trade Authority.

Lori, welcome back to Democracy Now! Talk about your reaction to the TransCanada suit.

LORI WALLACH: Well, what it boils down to is a foreign corporation deciding that the US taxpayers ought to give them $15 billion because they don’t like the outcome of our government decision that this pipeline was bad for our country and bad for the environment. And where they’re going to get this money extracted from us is an extrajudicial – not US court, not US law – forum: the investor-state tribunal allowed under NAFTA. And the US has faced about a dozen of these attacks under NAFTA, all from Canada, but we have 50 agreements that have this outrageous system. Hardly any of those countries with those agreements actually have investors here. So, up to now, we haven’t lost one of these cases; however, the Trans-Pacific Partnership, overnight, if implemented, would double our liability. Right now, 50 agreements, about 9,000 companies are cross-registered from one of those countries that we have the agreement with operating in the US to attack our laws in these tribunals. Overnight, the TPP would give 9,500 more companies – big multinationals from Japan, in banking, in manufacturing, mining firms from Australia – the right to do this. So this case, hopefully, is like the canary in the coal mine letting us know what we’d be getting into.

AMY GOODMAN: In May, President Obama delivered a speech at Nike in Beaverton, Oregon, where he defended the pending Trans-Pacific Partnership trade deal.

PRESIDENT BARACK OBAMA: Critics warn that parts of this deal would undermine American regulation, food safety, worker safety, even financial regulations. This – they’re making this stuff up. This is just not true. No trade agreement is going to force us to change our laws.
AMY GOODMAN: President Obama also said the TPP improves on NAFTA.

PRESIDENT BARACK OBAMA: When you ask folks, specifically, “What do you oppose about this trade deal?” they just say, “NAFTA.” NAFTA was passed 20 years ago. That was a different agreement. And in fact, this agreement fixes some of what was wrong with NAFTA by making labor and environmental provisions actually enforceable. I was just getting out of law school when NAFTA got passed.
AMY GOODMAN: Lori Wallach, your response to President Obama? He was speaking at Nike headquarters.

LORI WALLACH: Well, first of all, the making stuff up comment is going to have to get shelved, because not only is this attack by TransCanada on our domestic, democratic government decision not to have a pipeline the exact kind of case he said couldn’t possibly happen – well, it just did, $15 billion being demanded by a – from a tribunal of three private sector attorneys, because this investor-state system, it’s not judges. There are no conflict-of-interest or impartiality rules. These are folks who rotate between one day suing a government for a corporation and the next day being the judge. And they all hear cases amongst themselves. They call themselves “the club.” And there’s no outside appeal, and there’s no limit on how much money they can order a government to pay. And if a government doesn’t pay, by the way, the company has the right to seize government assets – seize government assets – to extract our tax dollars. So, number one, this case is exactly the kind of case President Obama said folks were making things up when they were worried about this. Well, now it’s happened.

But this follows one month after the US Congress, because the WTO threatened billions in trade sanctions, gutted another consumer law. Hate to tell folks, if they didn’t notice in the grocery store, but those customer meat – the country-of-origin labels we all use to figure out where our meat comes from, the WTO said we couldn’t have those anymore. And so, Congress, at the face of these sanctions, said, “Oh, better get rid of that law.” So, two examples, live and real, compared to what President Obama promised.

But more broadly about the TPP, here’s the thing folks need to know. The actual language that TransCanada is using in this case, because they filed a brief, is the same language that, word for word, is replicated in TPP. So there are bells and whistles that have been changed between the investor-state language in NAFTA and TPP. In many ways, actually, TPP expands investor-state. It allows more kinds of challenges. Hell, it even allows challenges of government contracts for foreign companies’ concessions on natural resources in foreign land. That was not in NAFTA. However, the actual claims being made by TransCanada, that language is word for word in the TPP. And you can see the analysis of that on our website, You can look at the text now and use our analysis as basically a guided tour.

AMY GOODMAN: Lori, can you explain why they’re asking $15 billion?

LORI WALLACH: So, this is a question a lot of folks asked me yesterday: “Well, wait a minute, this is supposed to” – everyone who’s read the newspaper. “This is a $3 billion pipeline. How the heck can they be asking for $15 billion from us taxpayers?” And the answer is, under the outrageous investor-state system, not only can a foreign corporation get all these special rights – go around our courts, go around our laws and demand compensation – but they don’t just get money for what they’ve spent on a project, they get to get compensated for expected future profits. Yep, they are calculating – and the brief goes through this – what they think they would have made in the future for the lifetime of the pipeline had it been allowed. And that’s what we taxpayers are supposed to give them, because we had a democratic decision of our government that their commercial project wasn’t in the national interest. That’s the $15 billion.

AMY GOODMAN: Lori, can you talk about how trade rules have affected how countries can deal with climate change? Like in, what, 2014, the US launched a WTO challenge against India’s solar incentives.

LORI WALLACH: So, there’s been really terrific work done on this by Sierra Club, NRDC, If you go to their websites, for instance, Sierra Club has a terrific report that goes systematically through all the ways that our trade rules have undermined the efforts both to counter climate chaos, but also some of the adaptations, the efficiencies in energy policy we’d like to take on. And the overarching sum of it is, there are three problems.

One problem is, once we have a trade agreement with a country, we’re no longer allowed to stop exports of, for instance, liquid natural gas. It’s just deemed mandatory that we continue to send out energy. So, to the extent part of the answer to the climate disaster is we need to keep some carbon-based fuels not being processed and shipped around, we lose the right, as a policy, to do that. It’s considered zero quota. We’re not allowed to limit trade.

Number two, the nontrade regulatory limits in all these trade agreements – because, you know, the rule is, every country has to change its domestic laws to meet all these nontrade rules. TPP has got 30 chapters. Only six have to do with trade. There’s a whole chapter on services, and it covers energy services. For instance, it does not allow you, in your policies, to discriminate between how you regulate, say, fossil fuels versus wind or solar. If it’s fuel, it’s fuel. And there’s a whole set of specific constraints around those kind of energy and conservation policies.

And then, the third thing it does is it limits the kind of procurement policies you can have. So, typically, the government is the cutting edge in using our tax dollars when they’re buying things for government to set up a market. So, you know, the car efficiency standards, fuel efficiency standards, we all know there’s CAFE standards in our cars when we buy them. That started as a government program for the government fleet, so that the companies had a market to try and make efficient cars. So, right now, for instance, we have something called renewable portfolio standards, where when the government buys energy, a certain percentage has to be from renewable sources. Those kind of conditionalities are limited in the procurement chapter of an agreement like the TPP. So, basically, it hits, for the fuel industry – that’s why they love it – on all grounds, in handcuffing governments with their policy options.

It’s Been A Bad Year For Big Tobacco

Cigarette companies found themselves the targets of tighter regulations and lawsuits.

Anti-smoking activists have for years targeted the global behemoths that control the tobacco industry — and this year they made headway. Some of the largest tobacco companies suffered financial and PR setbacks in a series of lawsuits, and anti-smoking initiatives worldwide are further curbing their power.

Here are the losses big tobacco suffered this year:

Packs of Philip Morris International Inc. Marlboro Menthol cigarettes in the new packaging are arranged for a photograph at a tobacco store in Melbourne, Australia, on Monday, Oct. 1, 2012. Tobacco products complying with the world?s first plain-packaging laws have started arriving in stores, as an Oct. 1 manufacturing ban on the country's A$10 billion ($10 billion) tobacco industry comes into force. Photographer: Carla Gottgens/Bloomberg via Getty Images

Packs of Philip Morris International Inc. Marlboro Menthol cigarettes in the new packaging are arranged for a photograph at a tobacco store in Melbourne, Australia, on Monday, Oct. 1, 2012. Tobacco products complying with the world?s first plain-packaging laws have started arriving in stores, as an Oct. 1 manufacturing ban on the country’s A$10 billion ($10 billion) tobacco industry comes into force. Photographer: Carla Gottgens/Bloomberg via Getty Images

Australia Can Keep Its Plain Cigarette Packaging

The Australian government won a major lawsuit against Philip Morris this week. It can continue using plain packaging — logo-less packaging that is the same for all tobacco brands — on cigarette packs sold across the country.

Australia introduced “the world’s toughest laws on tobacco promotion” in 2011, according to then-health minister Nicola Roxon. That year the government voted to implement packaging that, instead of logos, displays the frightening illnesses associated with smoking.

Philip Morris Asia unsuccessfully sued the Australian government in 2011, claiming that the law violated a trade agreement between Australia and Hong Kong.

The UK, France and Ireland Will Use Standardized Packaging, Too

Several countries have followed suit on Australia’s anti-smoking measures. Britain and Ireland approved plain packaging laws in March.

France’s parliament also approved a law Thursday that will place plain packaging on all cigarettes sold in the country starting in May 2016. The products’ brand name will only appear in small type.

The country has made several attempts to diminish its large number of smokers. In 2008, it prohibited smoking in enclosed public spaces like restaurants and bars. In October, the city of Paris also raised the fine for dropping a cigarette butt into the street to 68 euros.

Boston Raises Age For Buying Tobacco To 21

Boston’s board of health voted last week to raise the tobacco purchasing age from 18 to 21 in an effort to prevent teen smoking.

Boston followed the lead of many other cities and towns across Massachusetts that had already increased the age limit. “These changes send a strong message that Boston takes the issue of preventing tobacco addiction seriously,” Boston mayor Marty Walsh said.

New International Trade Laws Block Tobacco Companies From Suing Countries

The Trans-Pacific Partnership, a trade agreement between the U.S. and 11 countries in the Pacific Rim, ruled in October that tobacco is exempt from Investor-State Dispute Settlement rules. In other words, tobacco companies will no longer be able to challenge TPP member countries’ anti-smoking measures the way that Philip Morris did in Australia in 2011.

Anti-tobacco lobbyists and a few senators helped make it happen. “It was time to take action to get trade agreements to stop treating tobacco like it’s just another product and the tobacco industry like any other business,” said Gregg Haifley, federal relations director of the American Cancer Society Cancer Action Network.

The FDA Forced One Tobacco Company To Stop Selling Several Products

The Food and Drug Administration banned R.J. Reynolds from selling four different types of cigarettes in September — Camel Crush Bold, Pall Mall Deep Set Recessed Filter, Pall Mall Deep Set Recessed Filter Menthol and Vantage Tech 13 cigarettes.

The company changed the product ingredients so that they no longer complied with a 2007 federal health law, The Hill reported. The products “fail[ed] to meet the public health bar set forth under law,” explained Mitch Zeller, director of the FDA’s Center for Tobacco Products.

A Jury Imposed $35 Million In Damages On That Same Tobacco Company

R.J. Reynolds was also at the center of a lawsuit in Florida after Garry O’Hara, a U.S. Air Force sergeant who earned the Bronze Star, died of lung cancer in 1996, at the age of 50. O’Hara’s family’s lawyers argued that the company masked the risks associated with smoking for years.

A Florida jury awarded the family $34.7 million in damages in September.

The company tried to argue that the executives responsible for decisions at the time are no longer around. “The R.J. Reynolds leadership that you heard about, they’re gone. … Those people who stood up before Congress and raised their hand, they’re gone,” David Monde, a lawyer for R.J. Reynolds, said in court.

Shady Activity Uncovered Within A Big UK Tobacco Company

The BBC conducted an investigation into British American Tobacco and found that the company bribed politicians and civil servants in East African countries in an effort to “undermine anti-smoking legislation.”

One BAT employee, the BBC said, illegally paid a civil servant in Burundi in exchange for a copy of the country’s Tobacco Control Bill.

The BAT said it was the target of false accusations.

“Our accusers in this programme left us in acrimonious circumstances and have a vendetta against us, clearly demonstrated by the false picture they present of how we do business,” it said in a statement.

The company could face prosecution in the U.K. and the U.S.

Three Cigarette Companies Ordered To Pay CA $15 Billion To Canadian Smokers

Two separate lawsuits, filed by Canadians sickened from smoking and Canadians unable to quit smoking, culminated in the country’s biggest class-action lawsuit to date.

Three tobacco companies — Imperial Tobacco; Rothmans, Benson & Hedges and JTI-Macdonald — were accused of lying to consumers about the health risks associated with their products. They were ordered earlier this year to pay $15 billion (about $10.8 billion USD) to the plaintiffs.

All three companies said they planned to appeal the decision, claiming that Canadians are well-versed in the risks of smoking.

TPP: Australia could be “sued for billions”

A leading expert on intellectual property (IP), Associate Professor Kimberlee Weatherall, has warned that Australia “could be sued for billions” if it ratifies the Trans-Pacific Partnership (TPP) trade agreement. From The Canberra Times:

“The Intellectual Property (IP) chapter of the TPP is an extraordinarily complex, extremely prescriptive chapter that locks in IP settings established decades and even a century ago – at the very time that the Productivity Commission is looking critically at Australia’s entire IP arrangements,” Ms Weatherall said.

“[And] the adequacy of carve-outs for IP in the Investment Chapter is extremely concerning.”

“We could get sued for billions for making some change to mining law or fracking law or God knows what else. We could literally have damages of more than a billion, but we don’t actually know. And we won’t know until any [law] suit gets started, and then we won’t know for another five years while it works through the process.

Ms Weatherall’s criticism follows others such as Dr Matthew Rimmer, intellectual property law professor at the Queensland University of Technology, who says the section on foreign investors is “labyrinthine”.

In signing on to the TPP, Trade Minister Robb did at least achieve a ‘carve-out’ for tobacco, which is something. But it still leaves a bunch of areas where Australian taxpayers could be sued.

While Robb has labelled such concerns “scaremongering”, Canada’s experience with the US under the North American Free Trade Agreement (NAFTA) provides a stark warning of what could be in store for Australia if it ratifies the TPP. As explained last month by Kyla Tienhaara, Research Fellow Regulatory Institutions Network (RegNet), Australian National University:

Australia and Canada have a great deal in common – a British colonial past; large and sparsely populated territories; and resource-intensive economies.

Two other similarities also bear mentioning: the economies of both countries are dominated by US investors (27% of foreign investment in Australia and nearly half in Canada).

But there is a one major difference: up until now, Australia has never agreed to provide American investors with access to Investor-State Dispute Settlement (ISDS), whereas Canada has.

In total Canada has faced 35 challenges, 23 of these in the last ten years. Australia has been subjected to only one ISDS case.

Canada has been sued more times than Mexico under the North American Free Trade Agreement (NAFTA) and at a global level it has been involved in more ISDS cases (35 in total) than any other developed country. Canada has already lost or settled seven claims, paid out damages totalling over CA$170 million and incurred untold millions more in legal costs.

At the same time, Canadian companies have been rather unsuccessful in ISDS. In general, the claim that ISDS will primarily benefit the “little guy” isn’t borne out by the statistics.

What kinds of policies are being challenged in ISDS? While much attention in Australia has rightly been given to Philip Morris’ challenge of the plain packaging legislation, many cases around the world actually focus on environmental protection and resource management.

Such cases account for 63% of disputes involving Canada. So carving out tobacco from ISDS, as has reportedly been done in the TPP, is like putting a Band-Aid on a bullet wound. If anything, it signals that the “safeguards” in place in the agreement are, on their own, insufficient to protect public policy.

Australia is opening a can of (really expensive) worms with the TPP. And significantly, it isn’t a can that can easily be closed again.

Clearly, Australians should be very concerned about the gremlins lurking in the TPP, the full extent of which are likely to come to light long after Trade Minister Andrew Robb has left his post.

‘Labour disputes may be open to abuse’

KUALA LUMPUR: The labour chapter under the Trans-Pacific Partnership Agreement (TPPA) will open up Malaysia’s industrial court system to abuse, said Bantah TPPA.

Parti Sosialis Malaysia treasurer and coordinator of Bantah TPPA Sivarajan Arumugam said certain provisions have been inserted into the labour chapter, for example Article 19.12, which allows investors to take the legal process out of the country.

“TPPA is asking to set up a labour council and a labour consultation. This is separate, meaning that any investor that comes to Malaysia and then they employ local workers, they want a separate labour consultation platform. And in under this platform, let’s say the investor and workers or the union have a dispute, they can form a labour council and consultation. Malaysia will be bound to do it,” he told reporters on Friday.

“We have a very long established industrial court system. Does this mean that investors don’t have to go to our industrial court?

“They can ask the government, according to the TPPA, to form a separate consulting platform, where I want to have a consultation and a council. We are bound by that.

“The worst thing after this is that if the consulting parties fail to resolve the matter no later than 60 days after the date of receipt, the investing party can request for the establishment of a panel under Article 28.7 in the dispute settlement chapter,” he said.

According to him, investors can avoid going to the local industrial court by requesting for labour consultation and if the consultation fails to resolve the dispute, the investor can directly refer the case to the international arbitration centre.

“What is going to happen to our labour court system? This is very dangerous. While the labour chapter has been hailed for taking care of our labour rights, but inside it, this is what you have. You have the opportunity for investors, employers to bypass our legal system, our industrial court system and judges, and directly take the matter to the international court,” he added.

In addition, he said, the International Labour Organisation Convention can be complied with even without TPPA.

“Our contention has always been that Malaysia, without TPPA, can at any time comply with the convention. A lot of labour standards will be updated through this convention,” Sivarajan said.

“The Human Resource Ministry still can comply to this convention without the TPPA. It is misleading for the International Trade and Industry Ministry to say that with TPPA, now your labour rights can be updated.”

Meanwhile, Malaysian Council for Tobacco Control (MCTC) president Dr Molly Cheah said the TPPA will make it difficult for Malaysia to regulate the use of tobacco in the country.

“Malaysia had tabled a total carve-out for tobacco from the TPPA in other words, this trade agreement does not apply to tobacco because it does affect the tobacco control activities of the government. Unfortunately, at the last part of the negotiations, in Atlanta in October, we found that the American voice prevailed.

“As you know the American voice is dictated mainly by the tobacco industry. Malaysia lost that proposal. In its place, it mentioned in the ISDS investment chapter, there is an exemption for tobacco control activities but it is not clear 100% how that is going to be done, because there is a provision in there that says the government can elect to deny the industry of suing or not suing.

“That is a grey area because they say that if you are given the choice to do it, then what happens if you have a weak government? You then allow the tobacco industry to force their case on to you. And there are at least seven to nine chapters in the TPPA that actually affect tobacco control in the country or any other countries. We are still studying the impact,” she said.

Cheah cited an example, whereby it is unclear whether there is exemption for tobacco under regulatory coherence. If there is no exemption, Malaysia would not be able to table any tobacco control act and it would be very difficult for the government to regulate the use of tobacco in this country.

“It is an absolute let down by the government to the hard work that all the tobacco control advocates had done to push for the total tobacco carve out for the country,” she added.

Bantah TPPA chairman Mohd Nizam Mahshar said out of the concerns it had outlined earlier before the final text was made public, 80% of its concerns turned out to be accurate while new concerns have also cropped up in the final text. He said its earlier reviews were done based on previously signed free trade agreements.

“We call on the government to finalise and release the Cost-Benefit Analysis and National Interest Analysis as soon as possible so that an informed analysis or study can be done in reference to the final document so that we do not make the wrong decision for our country’s future,” he said.

Tobacco Giants Say They Shouldn’t Be Singled Out under Trans-Pacific Partnership – Why Not When Their Products Kill 6 Million a Year–why-not-when-their-products-kill-6-million-a-year-300157274.html

WASHINGTON, Oct. 9, 2015 /PRNewswire-USNewswire/ — The following is a statement of Matthew L. Myers, President, Campaign for Tobacco-Free Kids:

It is absurd that tobacco giants Philip Morris International and Altria are complaining the tobacco industry is being “singled out” because the new Trans-Pacific Partnership (TPP) trade agreement prevents them from using the TPP to attack life-saving measures to reduce tobacco use.

Tobacco products SHOULD be treated differently. They are uniquely lethal and kill when used as intended, and the tobacco industry is the poster child for abuse of the world trade system. How shameless of tobacco companies to play the victim when the real victims are the six million people their products kill worldwide each year.

It is not surprising for tobacco companies to say and do anything to sell more cigarettes despite the fact they kill millions every year. The question now is this: Will members of Congress stand for the right of governments, including our own government, to protect the health of their citizens from tobacco, or will they stand with the tobacco companies and help them spread death and disease around the world? Congress should reject the tobacco industry’s disingenuous arguments and support this landmark provision in the TPP that protects nations’ authority to enact tobacco control measures.

This safeguard for tobacco control measures is necessary given the abusive conduct of the tobacco industry and the uniquely harmful nature of tobacco products. Tobacco products are the only consumer products that kill when used as intended. Globally, tobacco is projected to kill one billion people this century unless governments implement effective tobacco control policies. There is a unique global consensus that nations must act as demonstrated by an international public health treaty, the World Health Organization Framework Convention on Tobacco Control, which has been ratified by 179 nations and the European Union.

The tobacco industry has fought back by filing – or threatening to file – costly trade lawsuits with the aim of defeating effective tobacco control measures or intimidating government into inaction. Australia and Uruguay are currently battling such lawsuits filed by Philip Morris International, and as reported by The New York Times, many other countries have been threatened with them. The huge costs of these lawsuits have discouraged nations from taking life-saving action.

In its statement on the TPP, Philip Morris International complains that these cases do not justify protecting tobacco control measures under the TPP and doing so would result in “a diminished rule of law.” In reality, it is Philip Morris’s own trade lawsuits that have diminished the rule of law and been viewed as so abusive that countries made it a priority to protect tobacco control measures under the TPP.

The tobacco industry and its political allies also claim this provision would harm tobacco farmers. Make no mistake: This provision would not impact trade of tobacco leaf in any way and includes language specifically exempting tobacco leaf. It is focused on preventing tobacco manufacturers’ abuse of the international trade system and addresses the actions of these manufacturers, not growers. Tobacco companies must not be allowed to hide behind tobacco growers to disguise their own wrongful behavior.

The tobacco industry’s abuse of trade agreements is a real and direct threat to public health around the world, and it must be stopped. It is the tobacco manufacturers’ own behavior that has created a broad consensus that they must not be allowed to threaten countries that act to protect their citizens from tobacco.

Trans-Pacific Partnership: Congressional Republican Leadership May Protect Tobacco Despite Carve-Out

Charles Tiefer, Contributor I cover government contracting, the Pentagon and Congress.  Opinions expressed by Forbes Contributors are their own.

Charles Tiefer, Contributor
I cover government contracting, the Pentagon and Congress. Opinions expressed by Forbes Contributors are their own.

I am Professor at the University of Baltimore School of Law, where I focus on government contracting and Congressional legislating. I served as Commissioner on the Congressionally-chartered Commission on Wartime Contracting in Iraq and Afghanistan, in which I did three missions to Iraq and Afghanistan, and over 20 televised hearings. My chief published work on government contracting is a leading 750 page legal casebook, Government Contracting Law in the Twenty-First Century. I have testified before Congressional committees as an expert many times about Government contracting, problem departments, and government personnel. I was General Counsel (Acting) of the House of Representatives, serving15 years in that office and its Senate counterpart, and published a 1000 page treatise, Congressional Practice and Procedure. I am publishing with University Press of America a new book, The Polarized Congress: The Post-Traditional Procedure of its Current Struggles. I graduated from Columbia College with a B.A. summa cum laude and from Harvard Law School with a J.D. magna cum laude, and served on the Harvard Law Review.

The author is a Forbes contributor. The opinions expressed are those of the writer.

The Obama Administration denied tobacco (by the now-famous “carve-out”) the benefit of the potent corporate suit mechanism in the Trans-Pacific Partnership (TPP) against other nations’ regulations. Observers assume that ends the story. Not so. The fight has just begun.

Previous trade agreements have empowered the tobacco industry to batter down other nations’ regulations. For example, the tobacco industry took on Australia’s efforts to carry out rules for plain packaging. Australia spent $50 million to defend its mandate for plain packaging of cigarettes against industry opposition (a suit by Philip Morris International).

Toward the end of the TPP talks, the Obama Administration agreed to the “carve-out.” In the TPP, there is a potent arbitration mechanism for corporations to sue countries that do not follow the agreement – “Investor-State Dispute Settlements tribunals.” (ISDS) The “carve-out” provides that the cigarette industry cannot invoke ISDS.

Many think the carve-out will end the story. Not so. First, consider how much political power opposes the carve-out in the majority Republican House and Senate. The tobacco industry is not alone. A group of business trade organizations, including the National Association of Manufacturers and the U.S. Chamber of Commerce, said in a statement it would oppose “a wide range of product and industry exclusions from core rules.”

In fact, the industry has the support of the two key Senate Republican. Senator Mitch McConnell of Kentucky, the Senate majority leader, said a few months ago, “It is essential as you work to finalize the TPP, you allow Kentucky tobacco to realize the same economic benefits and export potential other U.S. agricultural commodities will enjoy with a successful agreement.”

Senator Orrin Hatch chairs the powerful Senate Finance Committee, which has jurisdiction over trade agreements like the TPP. He said that “Although I don’t support tobacco at all, I still think it was essential,” and the carve-out “will cost us some votes. And every vote is essential. And there are other things I am very concerned about. I’ve committed to read the bill, and I will read it, but right now I’m leaning against it.”

Second, the Congressional Republican leadership can employ power through the obscure procedure for trade agreements. In order to ratify the TPP, Congress does not pass the TPP itself, but passes “implementing legislation.” In theory, President Obama submits the implementing bill, and the House and Senate do not change anything but must vote it up or down.

However, in reality, in the next few months, long before the Administration submits its implementing bill, the House Ways and Means, and Senate Finance, committee, may hold hearings. For TPP, these hearings would show the agreement is controversial and it needs every vote it can get. Then, the House and Senate committees may hold an “unofficial” or “informal” committee markup, and later a “mock conference” session. Here they vote for what they want in the implementing bill. The White House is hard pressed to disregard the Republican Congressional version of the implementing bill if it wants the Republican Congress to swallow hard and approve the version Obama brought back.

What could the Republican Congress demand? First, it can demand clarifications, translations, or understandings of key points, in side agreements or side letters. It is not yet clear, for example, whether the carve-out applies to all tobacco, or only to the cigarette industry and not tobacco “farmers.” And apart from the carve-out, the agreement may be construed to create enforceable rights for tobacco, that are enforceable by other processes and not the carve-out. The implementing bill might insist the United States government pursue all such processes at the behest of the tobacco industry.

Second, Congress might insist that the implementing bill provide for pressure on other countries to waive the carve-out and agree to ISDS for tobacco. Congress might direct the President to oppose invocation of ISDS against the United States about agricultural products of any country that does not waive carve-out when pressed for relief on behalf of our agricultural product, tobacco.

Third, Congress could provide that the carve-out sunsets, or is subject to renegotiation, in two years. This could be part of some general sunset or renegotiation provision. Congressional Republicans will maintain that President Obama was not “strong enough” in the TPP negotiations. They will want that if a Republican President gets elected in 2016, he could revise the TPP – including, of course, to protect tobacco.

TPP deal: US and 11 other countries reach landmark Pacific trade pact

Trans-Pacific Partnership – the biggest trade deal in a generation – would affect 40% of world economy, but still requires ratification from US Congress and other world lawmakers

Pacific trade ministers including the US, Australia and Japan have reached a deal on the most sweeping trade liberalization pact in a generation, which will cut trade barriers and set common standards for 12 countries, an official familiar with the talks said on Monday.

Leaders from a dozen Pacific Rim nations are poised to announce the pact later on Monday. The deal could reshape industries and influence everything from the price of cheese to the cost of cancer treatments.

The Trans-Pacific Partnership would affect 40% of the world economy and would stand as a legacy-defining achievement for Barack Obama, if it is ratified by Congress.

Lawmakers in other TPP countries must also approve the deal.

The final round of negotiations in Atlanta, which began on Wednesday, had got stuck over the question of how long a monopoly period should be allowed on next-generation biotech drugs, until the United States and Australia negotiated a compromise.

The TPP deal has been controversial because of the secret negotiations that have shaped it over the past five years and the perceived threat to an array of interest groups from Mexican auto workers to Canadian dairy farmers.

Although the complex deal sets tariff reduction schedules on hundreds of imported items from pork and beef in Japan to pickup trucks in the United States, one issue had threatened to derail talks until the end: the length of the monopolies awarded to the developers of new biological drugs.

Negotiating teams had been deadlocked over the question of the minimum period of protection of the rights to data used to make biologic drugs, made by companies including Pfizer Inc, Roche Group’s Genentech and Japan’s Takeda Pharmaceutical Co.

The United States had sought 12 years of protection to encourage pharmaceutical companies to invest in expensive biological treatments like Genentech’s cancer treatment Avastin. Australia, New Zealand and public health groups had sought a period of five years to bring down drug costs and the burden on state-subsidized medical programs.

Negotiators agreed on a compromise on minimum terms that was short of what US negotiators had sought, people involved in the closed-door talks said. The agreement would protect the data for between five and eight years, the New York Times reported.

The Washington DC-based Biotechnology Industry Association said it was “very disappointed” by reports that US negotiators had not been able to convince Australia and other TPP members to adopt the 12-year standard approved by Congress.

“We will carefully review the entire TPP agreement once the text is released by the ministers,” the industry lobby said in a statement.

Final hours

A politically charged set of issues surrounding protections for dairy farmers was also addressed in the final hours of talks, officials said. New Zealand, home to the world’s biggest dairy exporter, Fonterra, wanted increased access to US, Canadian and Japanese markets.

Separately, the United States, Mexico, Canada and Japan also agreed rules governing the auto trade that dictate how much of a vehicle must be made within the TPP region in order to qualify for duty-free status.

The North American Free Trade Agreement between Canada, the United States and Mexico mandates that vehicles have a local content of 62.5%. The way that rule is implemented means that just over half of a vehicle needs to be manufactured locally. It has been credited with driving a boom in auto-related investment in Mexico.

The TPP would give Japan’s automakers, led by Toyota Motor Corp, a freer hand to buy parts from Asia for vehicles sold in the United States but sets long phase-out periods for US tariffs on Japanese cars and light trucks.

The TPP deal being readied for expected announcement on Monday also sets minimum standards on issues ranging from workers’ rights to environmental protection. It also sets up dispute settlement guidelines between governments and foreign investors separate from national courts.

The TPP And The Tobacco Carve-out Bring Together Strange Bedfellows… While Highlighting The Problems Of The TPP

from the not-a-good-idea dept

It’s been rumored for years, but reports out of Atlanta suggest that it’s now confirmed that in order to finalize the Trans Pacific Partnership (TPP) agreement, everyone agreed to carve tobacco out of the corporate sovereignty system, better known as ISDS (investor state dispute settlement). These systems allow companies to sue countries for passing regulations that the companies feel harm their ability to profit — and tobacco companies have already filed ISDS complaints in a few countries that have pushed to put health warnings on cigarette packages.

While some health activists have cheered on this carve out — it appears that almost everyone else is pissed off. Not because they think that Big Tobacco should be shaking down countries that pass anti-smoking laws (though, there may be some of that), but because they recognize the problems that occur when governments can start to set up trade deals that “carve out” certain industries. It’s opening up a huge can of worms. Even some supporters of corporate sovereignty/ISDS are worried about what it means when one particular industry can just be excluded entirely from the process. Two of the biggest supporters of ISDS and TPP in Congress, Senators Mitch McConnell and Orrin Hatch, have both warned that the US should not carve out tobacco. Here’s McConnell a few months ago, standing up for those poor, poor tobacco farmers:

“It is essential as you work to finalize the TPP, you allow Kentucky tobacco to realize the same economic benefits and export potential other U.S. agricultural commodities will enjoy with a successful agreement.”

And here’s Hatch actually making a fairly salient point about the carve out:

“Although I don’t support tobacco at all, I still think it was essential,” Hatch said. “It’ll cost us some votes. And every vote is essential. And there are other things I am very concerned about. I’ve committed to read the bill, and I will read it, but right now I’m leaning against it.”

That doesn’t bode well for the agreement, given that Hatch was a huge supporter of the TPP. Another Senator, Thom Tillis, has pointed out that carving out one industry opens up the possibility of carving out others:

“I’ll not only vote against it, I’ll work hard to have it defeated if it goes in the final agreement…. Once you carve out someone from dispute settlement agreements, then who’s next?”

And the tobacco carve-out, believe it or not, seems to be one thing that both big business and big labor agree on, though for entirely different reasons. The US Chamber of Commerce and the National Association of Manufacturers are totally against it:

we ask all of the TPP governments to reject the exclusion of products from the coverage of the TPP and its enforcement mechanism…. Such exclusions are unnecessary and would be highly damaging to the international rules based trading system and the prospects for the TPP.

And here was the AFL-CIO opposing the entire ISDS mechanism, and noting that the tobacco carve-out just highlights the problems of ISDS. Whereas Senator Tillis worried about “who’s next” to get carved out, the AFL-CIO is pointing out that maybe there should be a lot more.

Any industry-specific carve-out will not address the serious structural problems inherent in the system itself. Issues of broad public interest should not be viewed through the narrow lens of trade and investment at all, let alone decided by unaccountable private panels. Systems of justice should be transparent and accessible on an equal basis. ISDS is anything but: Only foreign investors can use it and there are no requirements that affected communities be allowed to participate or even have their view considered. In many cases, there often are not even requirements that hearings or decisions be made available to the public at all! Even in the case of clear legal error, it is almost impossible to reverse a decision.

Indeed, as Sean Flynn pointed out just last week, carving out tobacco really just enforces how dangerous corporate sovereignty really is:

The new exception validates, rather than assuages, the concerns of those who have been criticizing ISDS systems for many years. Without express carve outs, ISDS provisions do threaten common health and safety regulations.

The carve out does nothing to halt the disturbing recent trend of companies using ISDS provisions in trade agreements to enforce international intellectual property norms through ISDS tribunals. This is, indeed, the claim at the heart of the tobacco cases now being litigated in ISDS systems. The claim is that tobacco regulations requiring plain packaging violate the trademark rights of tobacco companies protected by the World Trade Organization agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The pharmaceutical company Eli Lilly has also claimed that the denial of a new use patent on an old (off-patent) medicine violates rights granted by TRIPS and the North Atlantic Free Trade Agreement (NAFTA).

Meanwhile, US trade officials are, of course, trying to tap dance around the fact that basically everyone absolutely hates this. The USTR has tried to pretend this isn’t a big deal because tobacco is “unique.”

The U.S. Government seeks to include this language because tobacco is a unique product – it is highly addictive, always harmful to human health, and the single most preventable cause of death in the world. Recognizing these facts about tobacco through the TPP will represent an important step forward for public health in the international trade community.

It’s true that tobacco can be a serious health concern, but shouldn’t we be raising questions about why this procedure is no good for tobacco companies, but just dandy for every other industry — including some that produce harmful products? Or those like pharmaceutical companies who are jacking up prices to keep necessary medicines out of the hands of the poor?

Oh, and then there are those who are in complete denial, who are insisting that there really isn’t a carve-out for tobacco, even though there almost certainly is (we can’t say for sure, of course, because the documents are secret):

“TPP will not discriminate against any agricultural commodity nor will it exclude tobacco. On the contrary, TPP will provide protections to ensure that governments can implement tobacco control measures, while guaranteeing that tobacco has the same legal status as any other product,” a U.S. official told CQ Roll Call last week.

In short, the whole tobacco carve-out situation is a microcosm of the problems with the TPP. You have a terrible idea (corporate sovereignty) mixed with a weak attempt to appease health activists (carve out tobacco), that basically fixes nothing and satisfies no one. And, now, the same Senators in Congress who demanded the fast track authority be granted, which ties their own arms behind their backs in terms of changing the agreement, are threatening to force this change, even though they’ve already given up the power to do so.

U.S. pushes anti-tobacco compromise in Pacific trade deal

ATLANTA Governments will be allowed to block tobacco companies from suing over anti-smoking measures under a U.S. proposal being considered by Pacific trading partners (CTA: KEPT SECRET FROM PUBLIC VIEW) as part of a free trade deal involving a dozen countries.

The exemption proposed in Atlanta, Georgia, where ministers are trying to close the Trans-Pacific Partnership trade deal, would allow any of the 12 member countries to opt out of rules aimed at protecting foreign investors from harmful government policies with regard to tobacco control measures.

The TPP seeks to cut trade barriers and set common standards for 40 percent of the world economy. (ie remove tax on American made product imports) If governments trigger the exception, they would have free rein on tobacco regulation without being challenged in a trade tribunal. The U.S. proposal, seen by Reuters (in a toilet closed door meeting ) could prevent companies like Marlboro maker Philip Morris (PM.N) and Japan Tobacco Inc (2914.T) from using rules, which aims to protect foreign investors, to push back.

One of the most high-profile cases using the rules that protect foreign investors involves Philip Morris suing Australia over tobacco plain-packaging laws that ban branded cigarette packs. The company said this undermines its intellectual property.

The language on the table in the trade talks would cover tobacco control measures covering the manufacturing of tobacco products, as well as their distribution, labeling, packaging, wrapping, advertising, marketing, promotion, sale, purchase, or use, and any enforcement measures.

It would exempt tobacco leaf, in a bid to mollify tobacco farmers, and falls short of a sweeping total carve-out of anti-smoking measures which was also debated. The proposal upset U.S industry (boo-hoo) and some lawmakers but is likely to have traction among TPP partners. New Zealand is mulling its own plain packaging laws and Malaysia had proposed a complete exemption for tobacco from the TPP, which would keep import duties as high as 90 percent on U.S. tobacco exports.(GREAT IDEA!)

Australia has called for a broad exemption for health and environment regulations from the investor-state provisions of the pact.(along with summary execution of tobacco company executives by injection of cancer cells)

The top Democrat on the Senate Finance Committee, Ron Wyden, said an opt-out was appropriate and would help win support among trading partners.

“The administration should not spend a dime of negotiating capital protecting the tobacco companies (which fund presidential campaigns), and it is clear to me that several countries would insist on significant concessions from the United States were we to refuse to address their concerns,” he wrote in a letter to U.S. Trade Representative Michael Froman on Thursday.

But the compromise may still undermine support among some U.S. lawmakers from tobacco-growing states for the TPP, which needs to be approved by Congress before it can be implemented. Y’all, hillbilly North Carolina senator Thom Tillis, a Great Satan Republican, said the move was discriminatory and he would work to defeat the TPP in Congress if the clause was included. Seventeen members of the House of Representatives agriculture committee also voiced their paid-for concerns, along with U.S. business representatives who rely on prostituting themselves. The move “would be counterproductive in that it would open the way for other exemptions for other rules to be put in place,” said SELF INTEREST AXXHOLE Cal Cohen, president of the Emergency Committee for American Trade ECAT who DNGAF how many children die as long as the products make money for their clients.

Although health and human rights lobby group Corporate Accountability International blasted the opt-out as inadequate, the American Cancer Society Cancer Action Network backed the proposal.