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Obama administration moves against Big Tobacco, with consequences for Australia

Atlanta, Georgia

The Obama administration has signalled it is willing to compromise on a controversial clause in a proposed mega-trade pact in a move designed to ease opposition from anti-tobacco and public health groups.

In talks on the Trans-Pacific Partnership (TPP) agreement, the United States has formally proposed amendments that will make it impossible for tobacco companies to weaken or overturn laws designed to curb tobacco use.

image002 (7)US officials made the surprising offer on the first evening of trade negotiations in Atlanta, Georgia, where trade ministers from 12 Pacific-region countries, including Australia, have gathered to try to conclude talks on what will be the biggest regional trade agreement in history.

The proposal is likely to anger tobacco companies and US senators from tobacco-producing states, but will be welcomed by anti-tobacco campaigners and Democrats, who say they will be more likely to support the TPP’s passage through Congress if the tobacco “carve-out” is included.

The US proposal will give governments the option to prevent foreign tobacco companies from challenging anti-smoking policies in their countries by exploiting a controversial clause in the agreement called investor-state dispute settlement (ISDS), according to World Trade Online.

Clause has history

Such a clause has been used against Australia in the past. When former prime minister Julia Gillard introduced plain-packaging laws in 2012, tobacco company Philip Morris used the ISDS clause in the Hong Kong-Australia bilateral investment treaty to sue Australia’s government, and the case is still in arbitration.

The Obama administration’s proposal overnight means an ISDS clause will still be included in the TPP, but tobacco companies will not be allowed to use it to stop governments pursuing anti-smoking policies.

In response to the news, Australian Trade Minister Andrew Robb told Fairfax Media that he did not want to speculate about the issue while talks continued.

“In regard to ISDS, our position is we would only consider it if the balance of the package is in our best interests. We are not at that point. Nothing is agreed until everything is agreed,” he said.

But Mr Robb also said he had been pushing for the TPP to include ISDS “safeguards” – such as a carve-out for tobacco companies – similar to those in the Australia-South Korea free-trade agreement.

“Our officials have been at the forefront of developing a more acceptable ISDS [that includes] a ‘carve-out’ of public policy in the health and environmental space,” he said, adding that Philip Morris would not be able to sue Australia’s government under the recent trade agreements with South Korea and China.

“Philip Morris is using an old ISDS [against Australia] which is 20 years or more older.

“All our ISDS deals are being progressively updated, we’ve got 28 deals, some have been up to 30 years in operation.”

Agreement would span region

The TPP is a huge multilateral agreement covering Australia, New Zealand, Canada, the United States, Mexico, Peru, Chile, Malaysia, Singapore, Vietnam, Brunei and Japan.

Its members comprise 40 per cent of the global economy and span the entire Pacific region.

After years of negotiations over the pact, the contents of which are held secret, it was hoped that a final deal may be reached this week, but event organisers have officially extended the two-day talks to three days after trade ministers failed to overcome key sticking points overnight.

The Labor opposition has also signalled it does not support deals with an ISDS clause.

Opposition trade spokeswoman Penny Wong said much more detail was needed from the government.

“Mr Robb should outline the parameters of his negotiating mandate from Mr Turnbull,” she said in a statement.

“It’s not good enough for him to speak in riddles about an agreement being negotiated on behalf of the Australian people.

“Labor does not support the inclusion of ISDS provisions in trade agreements.”

Southeast Asia Tobacco Control Alliance

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U.S. Proposes Provision on Tobacco in Trade Pact

ATLANTA — The United States proposed this week to bar tobacco companies from using special trade tribunals to sue or threaten countries that passed antismoking laws, hoping to remove one roadblock to what would be the largest regional trade agreement in history.

The tobacco provision remains tentative, but its inclusion in the 12-nation Trans-Pacific Partnership being negotiated here would be a major victory for public health advocates and could set a precedent for other trade pacts.

Tobacco companies have been using existing global trade agreements to counter antismoking laws, especially in poorer nations, and advocates fear that the Pacific trade accord could provide another legal weapon.

Public health experts said the tobacco industry’s use of so-called Investor-State Dispute Settlement tribunals had become so widespread that many poorer countries were abandoning their antismoking efforts. Those underdeveloped nations are also the newest markets for tobacco companies, which are struggling to offset big declines in smoking in the United States and other rich countries.

The Obama administration had originally refrained from proposing such a provision, prompting fierce criticism from anti-tobacco activists who had urged the administration to use the trade talks to stop the practice. But late Wednesday, President Obama’s chief trade negotiator, Michael B. Froman, offered the proposal as an alternative to broader ones from Australia and Malaysia. American officials said the other nations’ plans could affect not only tobacco companies but also tobacco farmers and the alcohol and soft-drink industries, which would provoke political opposition in Congress and other nations.

The tobacco proposal will still meet opposition in Washington, where Mr. Obama would need bipartisan support to approve any trade agreement next year.

“I’ll not only vote against it, I’ll work hard to have it defeated if it goes in the final agreement,” said Senator Thom Tillis, a Republican from the tobacco state of North Carolina, who supported the Trans-Pacific Partnership effort.

“Once you carve out someone from dispute settlement agreements, then who’s next?”

Mr. Tillis’s Republican colleague from North Carolina, Senator Richard Burr, also complained. And Mr. Tillis said Senator Mitch McConnell of Kentucky, the Senate majority leader, had expressed reservations. Mr. McConnell had no comment.

Tobacco consumption more than doubled from 1970 to 2000 in the developing world, which is now home to more than three-quarters of the world’s smokers.

“Countries want to put a stop to the abuse of the trade system by the tobacco companies,” said Matthew Myers, president of Campaign for Tobacco-Free Kids, an anti-tobacco advocacy group. “This language sounds like it does that.”

Companies declined to comment on the provision on Thursday, saying it was not final. A group of business trade organizations, including the National Association of Manufacturers and the U.S. Chamber of Commerce, said in a statement this week it would oppose “a wide range of product and industry exclusions from core rules.”

The tobacco exception is one of a number of changes that would be made in such trade arbitration panels largely in response to widespread criticisms. On the left and right, critics have complained that the settlement process favors big corporations and threatens the sovereignty of nations to take actions and pass laws safeguarding public health and safety.

The trade agreement, if reached, would put the burden of proof on companies that sue through the tribunals. Also, a company would no longer be able to challenge a country’s laws or regulations simply by arguing that these laws would hurt the company’s “expectations” of profit.

Lawyers named to serve as arbitrators on the trade panels would be subject to a code of conduct and could be challenged about possible conflicts of interest. Some variation of the Investor-State Dispute Settlements tribunals has been part of trade agreements for decades, including about 50 to which the United States is a party. The settlement process gives companies the right to sue governments directly, instead of having to persuade a foreign state to take their case. A small panel of lawyers decides the matter, not a country’s courts, under the theory that the courts might be biased against foreign investors.

In the worst case, such tribunals exist to protect against foreign governments’ expropriation or nationalization of an industry. More often, these tribunals are intended to give foreign investors a sense of financial security. But critics say they are increasingly abused by deep-pocketed multinationals — notably the tobacco companies.

Philip Morris International has sued Australia and Uruguay for antismoking efforts under such agreements. This week, the head of the World Health Organization noted that Australia had spent $50 million to defend its mandate for plain packaging of cigarettes against industry opposition. In Africa, at least four countries — Namibia, Gabon, Togo and Uganda — have received warnings from the tobacco industry that their laws run afoul of international treaties.

“This is a brave step for the administration to take,” said Thomas Bollyky, a trade lawyer and a fellow at the Council on Foreign Relations.

Gregg Haifley, the federal relations director at the American Cancer Society’s advocacy arm, said the provision would bring American trade policy in line with United States health policy. “The tradition in trade has been to treat tobacco as just another business, just another product,” he said, adding, “This proposal changes that dynamic.”

Trade ministers for the Pacific nations stretching from Canada to Chile and Japan to Australia will meet for a third day on Friday in what could be the conclusion of six years of negotiations toward the largest regional trade alliance ever, one that opens long-protected markets and ends thousands of tariffs. But differences linger on pharmaceutical drugs, autos and more.

Still, the cautious optimism was enough to elicit bipartisan concern on Capitol Hill that the talks here are moving too fast toward agreement.

Republican and Democratic leaders of Congress’s two committees with jurisdiction over trade — the Senate Finance and House Ways and Means committees — cautioned against a hasty deal in a letter to Mr. Froman and to Treasury Secretary Jacob J. Lew.

Senator Orrin G. Hatch of Utah and Representative Paul D. Ryan of Wisconsin, the committees’ chairmen, and Senator Ron Wyden of Oregon and Representative Sander Levin of Michigan, the panels’ ranking Democrats, demanded greater communication with Congress and “stakeholders,” including business, labor and consumer groups.

Tillis: Tobacco Carve-Out Could Kill TPP in the Senate

North Carolina’s Senate delegation has renewed warnings over a proposal to leave the U.S. tobacco industry unprotected in the Trans-Pacific Partnership, and one member is warning he could muster the votes to derail the proposed agreement.

It would take only a simple majority to pass legislation approving of any final TPP deal through the Senate, thanks to the revival of Trade Promotion Authority earlier this year, a measure that was the result of common ground between President Barack Obama and Republicans on Capitol Hill.

The Senate voted 60-38 to pass the fast-track authority legislation in June. Sen. Marco Rubio, R-Fla., a presidential hopeful, missed the vote, though he has supported free trade.

“I think if Sen. Rubio had been in [attendance], he probably would have voted for it, so there were 61 votes for TPA. I think there are easily more than a dozen votes that could go the other way on TPP, if they try to force this precedent,” North Carolina GOP Sen. Thom Tillis said in an interview with CQ Roll Call.

Doing the math, if all supporters of TPA otherwise supported TPP, that could bring the deal down below the 50 votes needed to pass in the Senate, with the possibility of a tie-breaking vote by Vice President Joseph R. Biden Jr.

But of course given the importance of the tobacco industry to Kentucky, the home state of Majority Leader Mitch McConnell, there’s no telling if a deal with such a carve-out would get real consideration in the Senate at all.

“Sen. McConnell has said that if we move down the path of a carve-out, that he will be one of the people to lead the opposition. We’re talking about a provision in the TPP that’s unlike any provision in past trade agreements, at least in recent history, if ever. And it’s carving out a specific agricultural product, in this case tobacco,” Tillis. “It sets a precedent that we think could be problematic in TTIP and trade negotiations with African countries.”

The offices of Tillis and senior North Carolina GOP Sen. Richard M. Burr issued a statement Thursday indicating the United States had proposed such a carve-out provision. Negotiations have been ongoing in Atlanta.

“Over the last seven years, this Administration has consistently picked winners and losers by rigging the rules in favor of the organizations and industries they like best,” Burr said in a statement. “Agricultural trade is critical to our nation’s economy and every sector of that industry creates jobs across the board. It is imperative that all of U.S. agriculture is treated fairly.”

TPP Carve Out for Tobacco Shows Core Flaws in Investor-State Dispute Settlement (ISDS)

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Big Tobacco Eyes Easing Restrictions Via TTIP

Written by Joe Wolverton, II, J.D.

“We are not afraid to entrust the American people with unpleasant facts, foreign ideas, alien philosophies, and competitive values. For a nation that is afraid to let its people judge the truth and falsehood in an open market is a nation that is afraid of its people.” — John F. Kennedy, February 26, 1962

If Kennedy was right, then the United States and its partners in the Transatlantic Trade and Investment Partnership (TTIP) must be very afraid indeed of their people.

Despite a promise made only weeks ago by the EU trade commissioner Cecilia Malmström to “publish detailed and extensive reports of the negotiations,” key documents recording details of negotiations between Big Tobacco and the EU were heavily redacted before being posted on the official EU website.

Virtually every word of the documents recording correspondence with and minutes of meetings with tobacco lobbyists and representatives of the governments of the United States, Japan, and the European Union was blacked out before being made available online.

In one example typical of the amount of pre-publication editing, a 14-page letter from British American Tobacco revealed fewer than five percent of the text. What was visible was little more than the written version of small talk.

Another egregious example of what the EU and U.S. trade representatives consider “access” and “transparency” is a single page memo of a meeting with lobbyists working for Philip Morris. In that offering to openness, even the date was redacted!

Activists in Europe have requested the full record of these meetings, supposing that they would reveal efforts by multinational tobacco conglomerates to include revocations of national (American, Japanese, and European) restrictions on the advertising, buying, and selling of tobacco.

An EU watchdog organization specializing in monitoring corporate lobbying is preparing to file a complaint with an EU government agency to force Big Tobacco and the representatives of the TTIP member nations to expose to the people of all interested countries the full, unredacted record of these critical conversations.

Regardless of the true purpose of these meetings, the fact that the participants want them kept secret is telling.

What is certainly not secret is the fact that U.S. law will be abrogated by whatever agreements the trade negotiators work out in secret with the tobacco industry and other segments of big business that see an opportunity to circumvent the Constitution and promulgate new, more favorable, less restrictive regulations.

Constitutionalists in America and friends of liberty and economic freedom on both sides of the Atlantic are fully aware that the TTIP is not to the liking of any right thinking person.

Speaking of the damage to representative, republican government lurking in the TTIP, The New American’s senior editor, William F. Jasper, writes:

The Transatlantic Trade and Investment Partnership (TTIP) proposes to begin “deep and comprehensive” integration between the 28 member states of the European Union and the United States. Over the course of the past several years, we have published many articles detailing the dangers posed by these (still officially secret) agreements. We are bringing together here, in abbreviated form, 10 of those reasons why every American — whether identifying as Republican, Democrat, Libertarian, Independent, Tea Party, liberal, conservative, or constitutionalist — should oppose both of these proposals.

Jasper goes on to list 10 reasons to oppose the TTIP.

It is that word “integration,” though, that should evoke the greatest resistance from Americans and Europeans who understand our common legacy of individual liberty and the trouble that is caused by political consolidation.

Again, Jasper’s analysis is noteworthy:

The TPP/TTIP architects are drawing from the “success” of the European Union. In the development of the European Union — from its origin as the European Coal and Steel Community to the Common Market to the European Community to, finally, the EU — this subversive mutational process has been referred to as “broadening and deepening.” Broadening (or “widening”) refers to the constant expansion through addition of new member-states; deepening refers to the constant creation of new supranational institutional structures and continuous expansion and usurpation by regional authorities of powers and jurisdiction that previously were exercised by national, state, and local governments. The “living,” “evolving” treaties and agreements of the EU have eviscerated the national sovereignty of the EU member-states and increasingly subjugated them to unaccountable rulers in Brussels under the rubric of “integration,” “harmonization,” “an ever closer union,” “convergence,” “pooled sovereignty,” “interdependence,” and “comprehensive cooperation.”

Of course, the most relevant and revealing question is why would negotiators — corporate and government — continue trying so hard to conceal the content of their negotiations if the deal were good for Americans?

In his exposé, Jasper points out that that “transparency” deception isn’t confined to the European politicians:

The Obama administration has audaciously claimed that the TPP and TTIP processes are “completely transparent,” and President Obama has publicly claimed to be peeved by charges (false charges, he says) that there is any secrecy involved. But the president is talking utter nonsense, if facts mean anything. It is a fact that after more than three years of (secret) negotiations, the administration still has not made the draft texts of either of the agreements available to the public.

When it comes to keeping Americans in the dark about multinational, unconstitutional trade deals, Obama has proven himself quite capable of cooking up some whoppers:

In a press conference attended by this reporter in December 2013, it was admitted that in the official document outlining the deal, the Obama administration makes clear that an agreement will not be chiefly focused on matters related to international trade, but rather “behind-the-border” (read: domestic) policies such as health, environmental, and monetary policy. As with so many of the other panoply of recent trade deals, multinational corporations operating within the United States and the EU are achieving quasi-governmental power and using that authority to limit the ability of U.S. and EU courts to enforce domestic laws, particularly those that the corporate interests deem detrimental to their bottom line.

If the globalist and corporate interests in the United States and Europe successfully silence the outrage of the opposition on both sides of the Atlantic and achieve adoption of the agreements, then the integration of the United States with regional blocs in the Pacific and Atlantic will rush headlong toward completion and the ultimate surrender of sovereignty will ride up rapidly on its heels.

As it stands today, despite the redactions, it appears that the right of Americans to elect those empowered to make laws is being repealed by corporate lobbyists meeting safely behind a thick veil of secrecy.


Could Tobacco Carveout Kill TPP?

By Matthew Fleming and Niels Lesniewski

The Trans-Pacific Partnership’s rocky road in Congress faces a fresh threat from tobacco-state senators.

A brief trip down memory lane: Trade Promotion Authority passed with 62 votes in June, paving the way for a simple-majority threshold for the 12-nation trade deal.

But to get there, TPA required legislative jujitsu packaged with other bills, complex vote sequences and a ping-pong with the House to draw enough votes.

TPA endured one Democratic filibuster. It dealt with a messy human trafficking provision as well as language combating currency manipulation. It sustained vociferous opposition from most Democrats and unions and Republican opposition to the relinquishment of Congressional power.

And despite all of that, it’s tobacco’s status as a significant cash crop in Kentucky that could snuff out TPP in the end.

Reuters reported the administration had been considering allowing tobacco to be carved out of the investor-state dispute settlement, which, among other things, would give tobacco companies little protection against stiff regulation by trade partners, like Australia’s ban on branded cigarette packs.

Senate Majority Leader Mitch McConnell of Kentucky, along with Republican Sens. Richard M. Burr and Thom Tillis of North Carolina, have repeatedly protested even the vague notion of a provision targeting tobacco.

Both in person and through correspondence, McConnell has pressed U.S. Trade Representative Michael Froman throughout the negotiations to ensure there is no provision targeting tobacco, even citing the crop’s role in “important biomedical research.”

“As you know, I am very optimistic about the potential for Kentucky’s manufacturing workers and farmers — including its thousands of tobacco growers — to benefit from new export opportunities facilitated by a completed TPP agreement,” McConnell wrote in a July 30 letter to Froman. “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.”

Needless to say, not many things happen in the Senate if the majority leader doesn’t want them to happen, and he’s calling tobacco protections “essential.”

It’s unclear where Kentucky’s junior senator stands: Rand Paul, a Republican running for reelection as well as the GOP presidential nomination. His office did not respond to multiple requests for comment.

Burr, who sits on the Finance Committee, which includes trade in its jurisdiction, told CQ Roll Call he’d received assurances from Froman that tobacco would not be excluded from protections in the deal.

Burr, who took the strongest position out of the three senators, asked again from Froman for reassurance that tobacco would be treated differently and vowed to do everything possible to derail the trade legislation if tobacco isn’t protected.

“I was told it wouldn’t be in there, that I didn’t need to worry about it,” Burr told CQ Roll Call. “And that was before I cast a crucial vote on TPA, which changed the [vote threshold] from 60 to 51. I made a promise to him before that if it was in there I’d do everything in my power to kill the TPP. And I will.”

Tillis argued in a letter to Froman in early August that a tobacco carveout would set a dangerous precedent for future trade deals and could scare away would-be supporters of the deal.

“A number of my colleagues share my view that the TPP can be a net positive in the long run,” Tillis wrote. “I am confident, however, that the path toward ratification will be significantly endangered if the administration or one of our trading partners impose their biases by targeting specific industries for exclusion.”

A spokesperson for the U.S. Trade Representative wouldn’t speak directly to the carveout in a statement to CQ Roll Call, saying only that “We are working proactively to promote the interests of American farmers and preventing discrimination against them, while ensuring that the FDA and health authorities of other countries can implement tobacco regulations to protect public health.”

Blocking other countries’ anti-smoking efforts is wrong

The United States should not stand in the way of other countries trying to protect themselves from the No. 1 cause of preventable death.

But that’s just what Senate Majority Leader Mitch McConnell and the U.S. Chamber of Commerce are demanding as the Obama administration negotiates the Trans-Pacific Partnership.

Kentuckian McConnell and others in Congress are defending the continued use of trade agreements to block anti-smoking measures — and brandishing one of their all-time favorite political props: the American tobacco farmer.

It’s safe to assume, however, that their larger concern is the cigarette makers that pour millions of dollars into politics and have made McConnell the Senate’s leading recipient of tobacco-industry money.

McConnell and his allies insist that tobacco should be treated in trade deals like any other agricultural commodity and warn that allowing tobacco to be singled out will put other commodities and industries at risk in the future.

This logic has one big problem: Tobacco is not like any other agricultural commodity or, for that matter, any other legal product. Tobacco stands alone because, used as directed, it will kill you.

If current trends hold, in 15 years, a whopping 85 percent of the projected 8 million people who will die annually from tobacco-related diseases will be in poor or low-income countries, according to the World Health Organization.

The tobacco industry has moved aggressively into the developing world as Americans and Europeans shun smoking.

Luring customers with massive advertising campaigns, the industry also uses trade and investment agreements to beat back public health and education measures, such as warning labels and higher taxes, that have reduced smoking here.

Under past agreements, anti-smoking measures can be challenged and struck down as barriers to free trade.

The expensive prospect of tangling with the industry was enough to back down poor countries such as Togo and Namibia.

Even New Zealand and Canada retreated from tobacco regulations after trade litigation threats. And Australia is embroiled in defending its cigarette-packaging requirements in a legal dispute brought by Philip Morris International.

No wonder at least some of the 11 other TPP countries want an exclusion protecting their anti-smoking efforts from challenge under the trade agreement’s dispute-resolution clause.

McConnell, a TPP booster, has been successfully pushing against a tobacco exclusion and renewed his objections in a July 30 letter to U.S. Trade Representative Michael Froman.

Like most trade deals, the TPP is being negotiated in secret, so the U.S. position is unclear. Politico has reported that the U.S. is open to a provision protecting antismoking regulations.

Let’s be clear: No one’s talking about limiting trade or tobacco exports, in leaf or cigarette form. Other countries seek only autonomy to combat smoking’s health and financial costs through widely accepted public health policies.

Kentucky exports about $300 million worth of tobacco leaf annually.

The 15 percent of Kentucky growers who stayed in the business have long been aware of the market risks. After receiving $5 billion through the tobacco settlement and $10 billion as compensation for the end of quotas, American farmers who decided to keep growing tobacco did so with their eyes wide open.

The 1998 tobacco settlement also compensated states for caring for sick smokers. Kentucky has invested half of its settlement in agriculture diversification, to help free farmers from having to financially depend on poisoning other people’s children.

The Trans-Pacific Partnership Agreement and Implications for Access to Essential Medicines

Jing Luo, MD1; Aaron S. Kesselheim, MD, JD, MPH1

1Program on Regulation, Therapeutics, and Law, Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital and Harvard Medical School, Boston, Massachusetts
JAMA. Published online August 20, 2015. doi:10.1001/jama.2015.10872

After a difficult legislative battle, President Obama signed into law Trade Promotion Authority on June 29, 2015. The legislation allows for an up-or-down vote with no amendments in Congress for international trade agreements such as the Trans-Pacific Partnership (TPP) Agreement. The TPP Agreement includes 12 Asia-Pacific countries (United States, Canada, Mexico, Peru, Chile, Japan, Vietnam, Malaysia, Singapore, Brunei, Australia, and New Zealand) with a collective trading power amounting to 40% of the global gross domestic product. The TPP Agreement is still being negotiated; recently, in a meeting of trade ministers in Maui, Hawaii, negotiators failed to finalize the text of the Agreement due in large part to disagreement regarding intellectual property protections for pharmaceutical products.1

Intellectual property rights, including patents, are central to the business model of brand-name pharmaceutical manufacturers. Manufacturers can charge high prices during patent-protected periods without fear of competition, earning profits that are intended to provide incentives for investment in drug innovation. However, low-income patients frequently lack access to expensive drugs, and excessive spending on pharmaceuticals can strain government budgets, leading to reductions in other health services. In addition to addressing barriers to trade, the TPP will affect the pharmaceutical market in member countries due to its intellectual property provisions.
It is critical to ensure that patents protect only innovative pharmaceutical products and for governments to balance grants of market exclusivity with other competing interests, such as the widespread availability and affordability of certain drugs. In the United States, for example, patents are supposed to be issued only to novel products that are an innovative step beyond what already exists, and patents along with a variety of regulatory and other exclusivities permit conventional drugs to receive an average time of about 13 years of market exclusivity before competing generic versions are approved.2

The 1994 Trade Related Aspects of Intellectual Property (TRIPS) Agreement, which countries must agree to as a criterion for membership into the World Trade Organization, standardized basic intellectual property protections for pharmaceutical products around the world. Before TRIPS many lower-income countries had chosen not to grant patents for pharmaceutical products, emphasizing low-cost access over contributing to incentivizing innovation; however, the TRIPS Agreement required all signatory countries to change their policies and grant pharmaceutical patents.

In the years since, countries have implemented this requirement in different ways. Indian law, for example, required new forms of existing drugs to show significant improvements in efficacy before they can be granted a patent. This controversial provision was recently upheld in an Indian Supreme Court decision related to a new formulation of imatinib (Gleevec), a tyrosine-kinase inhibitor used to treat chronic myelogenous leukemia.3 In that decision, the Indian Supreme Court stated that the beta crystalline form of imatinib was not patentable in part because it was too similar to an older formulation discovered prior to India’s enforcement of patents for pharmaceutical products under TRIPS.

The TPP may end such flexible approaches to granting patents and add a number of new requirements related to intellectual property in addition to the TRIPS measures. Even though the exact details of the TPP are not known, negotiating drafts have been leaked, with the most recent intellectual property chapter dating from May 11, 2015.4 This chapter includes 8 sections covering a wide range of topics including patents, trademarks, copyright, industrial designs, and geographical indications.

In the case of pharmaceuticals, the text of the draft seeks to bring international intellectual property law into closer alignment with current US standards regarding the scope of what may be patented. For example, US negotiators favor allowing patents to cover inventions in all fields of technology (including inventions derived from plants and microorganisms), despite legal systems in other countries that include a more limited scope of patentable subject matter.

The TPP also could allow new uses of a known product to be granted additional monopoly protection. This may reduce TPP countries’ abilities to create patent laws that seek, as India’s does, to ensure that only truly innovative and clinically important pharmaceutical products are patentable. Seeking patents for the new methods of using existing drugs is a common tactic that pharmaceutical manufacturers in the United States use to delay the generic competition. For example, Eli Lilly sued Canada for $500 million dollars over its decision to invalidate 2 pharmaceutical use patents: the use of olanzapine (Zyprexa) in schizophrenia and atomoxetine (Strattera) in attention-deficit/hyperactivity disorder.5 Both drugs were previously patented in Canada for other uses, and a generic manufacturer (Novopharm) successfully challenged the validity of these patents by showing that there was insufficient evidence to support the claims at the time of filing. In the case of olanzapine, Lilly attempted to secure additional monopoly protection by restating the claims from an earlier patent while simultaneously failing to demonstrate substantial advantage over other antipsychotics for this new use, which is the current standard required under Canadian law. Under the TPP, a multinational pharmaceutical company could use the investor-state dispute settlement mechanism to challenge domestic laws like the one in Canada, which are intended to promote timely availability of generic drugs.6

The TPP also contains provisions that could make it more difficult to successfully challenge patents after they have been issued by shifting the burden of proof onto the challengers. This would ensure that potential generic market entrants must expend substantial resources to clear the numerous interrelated patents that innovator companies obtain on their products, increasing the cost and time of generic entry. The TPP draft could also impose substantial civil and criminal penalties on potential generic manufacturers found to have infringed patents, increasing the business risk for these companies. Moreover, language requiring the seizure and destruction of in-transit goods for “confusingly similar” products may expand the geographic scope of the TPP to affect countries not part of the direct agreement, such as India or Brazil, which may find it more complicated to ship generic medicines that are legal under their patent regimes through TPP member states.

In addition to forcing TPP member states to adopt patent laws that closely align with that of the United States, the TPP could also require member states to adopt the US Food and Drug Administration’s approach to preventing generic manufacturers from reaching the market for a minimum of 5 to 7 years after the approval of a new small-molecule drug, 3 years for new indications, and 12 years after approval of a new biologic drug.7 Nine TPP countries provide no guaranteed exclusivity periods for safety and efficacy data associated with biologic drugs because the complex manufacturing processes required to create these medicines naturally makes for fewer follow-on biologic competitors and fewer cost reductions arising from that competition. Notably, in the United States, the Federal Trade Commission similarly recommended no guaranteed exclusivity periods for biologics, and the Obama administration has repeatedly proposed to reduce the period of biologic exclusivity from 12 to 7 years for these same reasons. The TPP may reduce the flexibility of US policymakers to change the period of guaranteed biologic data exclusivity in the future, maintaining high biologic drug prices.

Thus, in its current form, the TPP could lower the bar for the patenting of pharmaceutical innovations and make it substantially more difficult for generic manufacturers to enter the market in TPP member countries. In addition, legal generic products could become seized during international transit. The overall effect of the TPP could be to extend the effective patent life of drugs and to decrease the availability of generic drugs or biosimilar medicines available to patients around the world.

Some economists have suggested that the intellectual property chapter of the TPP should be abandoned, because it could result in higher drug prices for patients.8 By contrast, industry representatives suggest that strong intellectual property protections are necessary for costly research and development, although this assertion has been disputed.9

It is likely that a balance between these competing objectives has not been struck by the TPP agreement in its most current form. The recent breakdown in negotiations suggest that some countries are taking a hard-liner on pharmaceutical-related provisions, so there remains hope that an agreement could be negotiated. If the United States continues down the path exposed in the leaked draft and expects other TPP countries to accept new standards for pharmaceutical intellectual property protections, it should also allow concessions that would encourage low-cost and high-quality generic drugs competition once market exclusivity ends. For example, data exclusivity for medicines should not be redundant or geographically transportable, meaning that if a 5-year exclusivity period has already expired in the United States, no additional exclusivity would be granted by regulatory authorities in other TPP member countries. In addition, meaningful technology transfer could be incorporated to promote local pharmaceutical manufacturing capacity. An innovative financing instrument, such as a nominal levy on top of existing tariffs for nonpharmaceutical trade (eg, goods and services), could also be created to help less-wealthy, signatory countries procure medicines that will inevitably be made more expensive by the agreement.

US Chamber of Commerce is in Big Tobacco’s thrall

A flurry of news articles, opinion pieces and blog posts have followed a June 30 New York Times investigation detailing how the U.S. Chamber of Commerce uses its clout to undermine public health measures that restrict tobacco use, sale and uptake, as mandated by the World Health Organization’s global tobacco treaty, the Framework Convention on Tobacco Control. While the coverage has highlighted the Chamber’s faculty for undermining tobacco control internationally, it has largely omitted the organization’s political interference in the United States on behalf of Big Tobacco.

One of the clearest ways the Chamber of Commerce has peddled the tobacco industry’s interests at home is through trade negotiations. The U.S. is on the verge of completing what would be the world’s largest trade and investment treaty, the Trans-Pacific Partnership (TPP). Many critics have opposed this deal, among the U.S. and 11 other Pacific Rim countries, over concerns about its possible effects on public health, the environment and workers’ rights.

This month trade ministers from the participating countries are heading to Hawaii to negotiate the last politically contentious issues in the treaty text, including policies that concern tobacco control. Over the years-long process, the Chamber has sent representatives to most TPP negotiations, advocating for Big Tobacco’s interests while enabling the tobacco industry to remain largely silent on the TPP.

In 2012, in response to an outcry from the public health community, the U.S. trade representative at the time, Ron Kirk, proposed a safe harbor provision, which would have provided stronger legal defenses against industry litigation fighting tobacco controls (though it would not have completely prevented such litigation). Since then, the Chamber has opposed any language singling out tobacco control measures for protection in the TPP. It has used every policy avenue available, from sending threatening letters to Barack Obama’s administration to aggressively pushing for private meetings with Kirk. In 2013 the U.S. caved to the Chamber’s pressure and abandoned its safe harbor approach to tobacco control, proposing instead weakened language that paid only lip service to public health. In response, dozens of members of Congress expressed to Obama their concern over the United States’ weakened tobacco proposal. In 2014 the National Association of Attorneys General sent a letter to the Obama administration calling for complete protection for tobacco-related public health measures in the TPP.

One of the key elements of the TPP — and the one most sought after by Big Tobacco — is an investor-state dispute settlement (ISDS) mechanism. ISDS allows corporations to sue governments in foreign trade courts over regulations the corporations deem harmful to future profits. These trade courts operate largely in secret, their decisions cannot be appealed, and their judges are often lawyers for giant multinational corporations.

Allowing Big Tobacco to sue governments for passing tobacco control measures would threaten not only tobacco regulations abroad but also those at federal, state and local levels in the U.S.
Philip Morris International, the world’s largest tobacco company, is already using ISDS mechanisms in two bilateral investment treaties to sue Australia and Uruguay for their lifesaving tobacco regulations, which require tobacco to be sold in packages with large graphic health warnings. Because Big Tobacco’s vast coffers dwarf those of many countries, the $8 million average litigation cost intimidates many countries from enacting lifesaving policies. For example, Uruguay said that it would have been forced to back down from Philip Morris’ lawsuit because of its prohibitive cost, had former New York City Mayor Michael Bloomberg not stepped forward with financial support. Though Big Tobacco has yet to win any of its cases against countries, its success is measured through nations’ delaying or backing down from advancing lifesaving tobacco regulations — as New Zealand and Togo have — for fear of facing similar suits from the tobacco industry.

By allowing Big Tobacco to sue governments for passing tobacco control measures, an ISDS mechanism in the TPP would threaten not only tobacco regulations abroad but also those at federal, state and local levels in the U.S. While the federal government can likely afford to defend its regulations, many state, city and county governments — which are responsible for the vast majority of tobacco control measures in the country — are understandably nervous about deciding between people’s health and a massive legal bill.

The global community is on course to curb the tobacco epidemic, in large part because of the World Health Organization’s global tobacco treaty. The U.S. Chamber of Commerce should be ashamed to do Big Tobacco’s dirty work, and governments, including ours, would be wise to reject its lobbying on any issue.

Now that the Chamber’s relationship with Big Tobacco has been exposed, the U.S. must look skeptically on the rest of the organization’s agenda. With the tobacco industry responsible for the loss of more than 6 million lives every year, there appear to be few, if any, ethical boundaries to the Chamber’s operations.

Chris Bostic is the deputy director for policy at Action on Smoking and Health.

John Stewart is the deputy campaigns director at Corporate Accountability International. Follow him on Twitter: @jms255.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera America’s editorial policy.