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July 20th, 2015:

Perils Of Trans Pacific Partnership (And Other FTAs)

Why Free Trade

The total output of a group of countries is greatest when the output of each good is produced by the country that has the lowest opportunity cost (i.e., comparative advantage). Conversely, if a good is produced by a country that can be produced by another country at a lower opportunity cost, the first country is giving up more than necessary.

Even if any one country can produce more of every good with the same resources than the other countries (i.e., absolute advantage), all countries can still gain from reallocation of resources, specialisation and trade provided the relative cost of producing the goods differs among the countries.

Specialisation and freer trade are supposed to lead to lower prices and higher consumption.

So why has the World Trade Organisation not been able to conclude negotiations on the Doha Development Round after more than a decade? Nor 12 Asia-Pacific countries[1] on the Trans-Pacific Partnership (“TPP”)?


Many countries want to protect their domestic agricultural sector for political or food security reasons. (Singapore seemingly ignores the perils of not producing enough food domestically, believing that diversifying its sources of food is good enough even in extreme shortage.)

Structural Unemployment

When countries reorganise production based on comparative advantage, workers are supposed to move from higher opportunity cost sectors to lower opportunity cost sectors. However, the reality is that displaced workers typically find it challenging, if not outright daunting, to gain employment in another sector in which their skills are not right and they cannot easily learn new skills.

Thus, in the debate over whether to give the US president “fast track approval” to negotiate the TPP and other FTAs, many Democrats in the US Congress wanted an extension of the Trade Adjustment Assistance programme so as to soften the impact on workers who may be displaced by the FTAs by providing them with income support and training.

FTA Winners And Losers

The main winners from FTAs are the large businesses and their shareholders.

The main losers from FTAs are the unskilled and lower skilled people. FTAs add to downward pressure on wages and exacerbate income inequality. This is why the AFL-CIO, the umbrella federation for US unions, is fiercely opposed to the TPP.


Recent FTAs have moved beyond the basic goal of increasing cross-border trade.

The TPP is being negotiated as a single undertaking that covers all key trade and trade-related areas. In addition to updating traditional approaches to issues covered by previous FTAs, it includes new and emerging trade issues and “cross-cutting” issues, according to the Office of the US Trade Representative[2].

Foreign Nationals = Citizens

Under the US-Singapore FTA, Singapore must accord the nationals of the US similar tax treatment as Singapore citizens when they purchase residential properties in Singapore.

Under the Singapore-European Free Trade Association FTA, Singapore must accord the nationals and permanent residents of Switzerland, Norway, Liechtenstein and Iceland similar tax treatment as Singapore citizens when they purchase residential properties in Singapore.

In the period from 8 Dec 2011 to 31 Jul 2013, 252 property transactions by foreign individuals were granted Additional Buyer Stamp Duty remission because of these FTAs, costing the Singapore Government $81.2 million.

Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnum says that the Singapore Government “will continue to seek a balanced package in our FTA negotiations to ensure that the FTAs provide meaningful benefits for Singapore, while taking into account the costs”[1].

Why was it necessary for the Singapore Government to accord the nationals of the US, and the nationals and permanent residents of Switzerland, Norway, Liechtenstein and Iceland similar tax treatment as Singapore citizens in the purchase of residential properties in Singapore? Was it an oversight or a lack of foresight?

Singapore citizens and permanent residents who purchase residential properties in the US, Switzerland, Norway, Liechtenstein and Iceland would also benefit, but not the vast majority of Singaporeans.

It is unclear if there will be a similar provision in the TPP.

Helping SMEs

The Singapore Government has programmes such as the Productivity and Innovation Credit Scheme to help Singapore’s small and medium-sized businesses.

However, businesses in FTA partner countries may allege that such programmes unfairly subsidise Singapore companies.

When this concern was raised in Parliament by Non-Constituency Member of Parliament Lina Chiam, Senior Minister of State for Finance Josephine Teo did not appear to address it[5].

Helping Singapore Companies

Singapore’s obligations under the World Trade Organisation’s Agreement on Government Procurement and various FTAs are legislated in the Government Procurement Act and its subsidiary legislation.

Any procurement by the Singapore Government that meets prescribed criteria is subject to these agreements and must be conducted in accordance with the Government Procurement Act and Regulations, which includes allowing foreign or domestic suppliers to compete freely.

Although the US is pushing for countries to limit their support for state-owned enterprises under the TPP, Singapore companies will likely not be put at much greater disadvantage because the Singapore Government already mostly procures goods and services through open tenders, even when the procurement is not covered by its international agreements.

Intellectual Property Protection

The US pharmaceutical industry is lobbying for strong intellectual property provisions to be included in the TPP. Such provisions could likely limit access to cheaper generic drugs in the TPP countries.

Companies Versus Governments

The TPP will likely allow companies in one country to sue governments of other countries if such governments violate TPP rules, and have the cases judged by partially privatised tribunals.

According to a New York Times report[6], the US tobacco lobby has requested the US Chamber of Commerce (“AmCham”) for help in the face of mounting anti-smoking legislation, including a World Health Organization global treaty which mandates anti-smoking measures and seeks to curb the influence of the tobacco industry in policy making. The treaty has been ratified by 179 countries, but not the US.

Tobacco lobbying by AmCham has been visible in the TPP negotiations[7].

AmCham maintains that while it does not support tobacco use, it believes that foreign governments should uphold intellectual property rights, adhere to international commitments, and promulgate rules that are sensible and effective. Such concerns have been the focus of its advocacy efforts on behalf of the tobacco and other industries. Public health policy aimed at curbing smoking can yield positive results, while still upholding intellectual property protection, honouring international agreements, and not singling out any specific industry for discriminatory treatment or destruction of company brands[8].

In the light of the challenge to the Australian government’s legislation on plain packaging for tobacco products, Member of Parliament Janil Puthucheary asked whether the TPP might place Singapore’s tobacco control measures at risk. Minister for Trade and Industry Lim Hng Kiang answered[9]:

Singapore’s current tobacco control measures do not contain such plain packaging requirements.… [They] include a comprehensive ban on tobacco advertising and the prohibition of misleading labels … to protect public health and are in line with World Health Organization standards … [and] have been implemented with full consideration of our international obligations.

Australia is the first country in the world to introduce such plain packaging requirements which have been challenged by tobacco firms on grounds of trademark rights infringement.… Negotiations for the [TPP] are currently ongoing. As with all FTA negotiations, MTI will continue to consult closely with all relevant agencies to ensure that Singapore’s interests, including the protection of public health, are secure.

[C]urrently, tobacco does not feature significantly in the TPP negotiations. As with many of the FTAs with the high levels of ambition, one with as complete a coverage of products as possible, it is unlikely that tobacco will be excluded.

Dr Puthucheary raised his concerns again the following year[10]:

I am aware that, in many of these agreements, health is an exception. And then there is an exception to the exception which does not cover investments in intellectual property, and trade interests use that as a way of challenging these types of regulatory decisions made by governments.

Minister for Health Gan Kim Yong replied[11]:

We are very mindful of our international obligations with regards to our obligation to WTO as well as our bilateral trade agreements. In crafting these tobacco control measures [relating to the removal of retail display], we have also been very careful with regard to the legal implications. Even in our negotiations of bilateral agreements, we are mindful of our own internal interests to protect the health of our citizens. These are all taken into account. As we roll out this tobacco controls, we are quite confident that we are on strong grounds, to introduce these measures, particularly in the interest of population health.

Not quite reassuring, in my view.

Human Rights And Environment

According to the White House, the TPP “is one that is not only good for American workers, good for the American economy, but is one that includes the strongest, boldest human rights protections, labor protections and environmental protections we’ve seen in a trade deal.”[12]

Can the Singapore Government stand up against US liberal activism?


The US-Singapore FTA provides for the contracting parties to allow temporary entry to business visitors, traders and investors, intra-company transfers of managers, executives and specialists, and professionals, without requiring prior approval procedures, petitions, labour certification tests, etc. and generally without any numerical restriction.

It is not clear whether the TPP will have similar provisions.

According to the Office of the US Trade Representative, “TPP countries have substantially concluded the general provisions of the chapter [on Temporary Entry], which are designed to promote transparency and efficiency in the processing of applications for temporary entry, and ongoing technical cooperation between TPP authorities. Specific obligations related to individual categories of business person are under discussion.”[13]


The US and Japan are the dominant nations — economically and politically — in the 12-member TPP. The remaining countries have little bargaining power when negotiating the TPP.

Japan’s Minister for Economic and Fiscal Policy Akira Amari declared that a broad agreement on the TPP could be concluded at the ministerial-level meetings later this month; countries that were unwilling to reach an agreement (apparently Canada has not put forward any plans to lower its barriers to agricultural trade) could join the TPP later[13].

In the US-Singapore FTA negotiations, the Singapore Government capitulated after fierce lobbying by Wm Wrigley Jr Co and allowed the importation and sale of chewing gum with therapeutic value. Inasmuch as the value of chewing gum exports to Singapore was minuscule, it appears that the US simply wanted to make the point that it called the shots.

What has Singapore conceded in its desire to be part of the TPP?

What has Singapore conceded that it did not even know it has conceded in its desire to be part of the TPP?

Unfortunately, we will not know until it is too late.


1. The 12 countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.


3. Broad TPP Deal ‘Still Possible Without Unanimous Agreement’ TODAY 15 Jul 2015.



6. DANNY HAKIM U.S. Chamber of Commerce Works Globally to Fight Antismoking Measures The New York Times 30 Jun 2015.

7. Ibid.

8. US CHAMBER OF COMMERCE Clearing The Smoke Around The Chamber’s ‘Tobacco Related’ Advocacy 1 July 2015.



11. Ibid.

12. PETER BAKER As Obama Visits, Nike Links Trade Accord To New Hiring New York Times 8 May 2015.


Assessing the Use of Agent-Based Models for Tobacco Regulation

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Morecambe’s illegal tobacco trade busted by test shoppers

morecambeAn investigation is under way after test shoppers found tobacco was being illegally sold in Morecambe.

A global cigarette firm bought non-duty paid tobacco at locations across Morecambe and then handed the evidence to Trading Standards.

The tobacco haul is thought to include counterfeit versions of genuine tobacco brands and products made specifically to be smuggled into the UK to avoid paying tax and sold on illegally, also known as illicit whites.

David Morris, MP for Morecambe and Lunesdale, also saw the evidence for himself and said he was “extremely shocked” at the extent of the illegal tobacco trade.

The test purchases were carried out by Japan Tobacco International (JTI) whose brands include Benson & Hedges and Silk Cut.

A JTI spokesman said: “The impact of the illicit trade in tobacco on society is far reaching and members of the public, retailers, suppliers and the Government all have a role to play to combat the issue. Criminals who deal in illegal tobacco will sell to all-comers, including children. JTI fully supports any efforts to rid our streets of illegal tobacco and stop criminals infiltrating our communities.

“Law enforcement agencies across the world have identified links between tobacco smuggling and globalised crime. The man or woman in the street who sells illegal cigarettes could be the front for a criminal supply chain that can span the globe. The £5 spent by a smoker on illegal cigarettes in Morecambe today can potentially fund major global criminals and terrorist organisations tomorrow.”

The evidence gathered can be used to secure convictions with penalties of up to a seven year custodial sentence.

Her Majesty’s Revenue and Customs (HMRC)’s mid-point estimates show that, in 2013/14, £2.1bn in tax revenue was lost because of tobacco smuggling.

A recent report called ‘Project Sun’ estimated that 20% of cigarettes smoked in the North West of England were non-UK duty paid, in line with the UK average of 21%.

Anybody with information about illegal tobacco in Morecambe and Lunesdale should contact Crimestoppers, anonymously, on 0800 555111 or at

Doctors testified against dying cancer patients for tobacco companies

A new study reveals that a group of physicians have testified for the tobacco industry against patients dying of cancer on multiple occasions, repeatedly stating that their smoking habits did not cause cancer.

According to the study conducted by a researcher from Stanford University, a pool of six experts would testify as expert witnesses that a combination of environmental factors such as the use of mouthwash or the consumption of salted fish were more likely to have caused a patient’s head and neck cancers than heavy smoking.

“I was shocked by the degree to which these physicians were willing to testify, in my opinion in an unscientific way, to deny a dying plaintiff – suffering the aftermath of a lifetime of smoking – of a fair trial,” says study author Dr. Robert Jackler, professor and chair of otolaryngology-head and neck surgery.

For the study, Dr. Jackler analyzed cases occurring between 2009 and 2014 in which patients were suing tobacco companies for damages. The patients were all long-term, heavy smokers with cancer in sites such as the larynx, mouth and esophagus.

In these lawsuits, the matter being debated was whether or not smoking caused each plaintiff’s cancer. Dr. Jackler consulted expert witness depositions and trial testimonies for each case before reviewing scientific literature to see whether the expert witnesses were supported by evidence.

“The study found they used scientifically invalid methods to support their testimony,” Dr. Jackler states.

Tobacco companies R.J. Reynolds, Philip Morris and Lorillard paid the six board-certified otolaryngologists – physicians specializing in diseases of the ear, nose, throat and related structures – to testify on behalf of the tobacco industry in over 50 cases.

The testimony provided by these expert witnesses was found to be remarkably similar across different cases, the study reports, and part of a cohesive strategy to dissuade the jury from ruling against smoking:

“By highlighting an exhaustive list of potential risk factors, such as alcohol, diesel fumes, machinery fluid, salted fish, reflux of stomach acid, mouthwash and even urban living, they created doubt in the minds of the jurors as to the role of smoking in the plaintiff’s cancer.”

Dr. Jackler points out that this tactical narrative is greatly flawed in that billions of nonsmokers are regularly exposed to these environmental factors.

“Were these causative factors for head and neck cancer, with even a minute fraction of the potency of tobacco, the rate of head and neck cancer among nonsmokers would be much greater than what has been observed,” he argues.

Otolaryngologists ‘recruited and trained’ by the tobacco industry

The study suggests that the tobacco companies were willing to go to great lengths to obtain strong testimonies. One physician states that tobacco company lawyers wrote an opinion for her that she then had to approve while another refused to acknowledge reports from the Surgeon General as authoritative sources.

Providing a testimony for the tobacco companies was also found to be a lucrative move. One of the physicians reported they were paid $100,000 to testify in one single case.

In cases concerned with whether or not smoking caused a plaintiff’s cancer, the legal standard is a probability of greater than 50%. Dr. Jackler says current scientific literature holds that tobacco directly contributes to head and neck cancer at a greater than 50% likelihood.

He dismisses the repeatedly expressed opinion of the six experts in the study that tobacco did not cause the plaintiffs’ cancer as “not credible.”

“The tobacco industry identifies the best experts that money can buy, trains them in their well-honed narrative to manufacture doubt in the minds of the jury and makes use of them over and over in case after case,” the study concludes.

Dr. Jackler’s study appears in the journal Laryngoscope and was supported by Stanford University School of Medicine’s Department of Otolaryngology-Head and Neck Surgery.

In 2012, tobacco companies – including R.J. Reynolds, Philip Morris and Lorillard – were ordered by a judge to inform in product warnings that they deceived consumers regarding the risks of smoking and deliberately manufactured cigarettes to make them more addictive.

Written by James McIntosh

Global conference pushes plain cigarette packaging

Paris – Ministers from 10 countries gathered in Paris Monday to launch a common drive to introduce plain cigarette packaging with the aim of stubbing out high smoking rates among young people.

Representatives from nations as far afield as New Zealand, Australia, South Africa and Uruguay issued a joint statement saying that significant scientific proof justified plain cigarette packaging”.

The ministers said plain packaging had been shown to “reduce the attractiveness of the product for consumers, especially amongst women and young people” as well as increase the effectiveness of health warnings on packets. Hosting the conference, French Health Minister Marisol Touraine said the aim was “a world without tobacco” and that “the generation that is born today should be a generation without tobacco”.

She told French radio that smoking killed 78,000 people each year in France and that eight million smokers worldwide would die each year by 2030 if nothing were done. According to the World Health Organization, one person currently dies every six seconds due to tobacco nearly six million people each year. “My target, with plain packaging, is not long-term smokers but preventing young people from starting to smoke and for these people the plain packaging has an impact,” said the minister. Several countries have recently passed legislation to introduce plain cigarette packaging laws that have met with fierce opposition from the powerful tobacco lobby. Australia was the first to introduce plain packaging legislation in 2012 with Ireland, France and Britain following shortly afterwards. In Australia, some studies have shown that the rate of young smokers has dropped following the introduction of plain packaging. The tobacco industry counters that high tobacco excise duty is the reason for the decline. Britain and France are poised to introduce plain packaging from next year.

France has one of the highest rates of under-16 smokers in Europe and, in addition to the plain packaging measures, Touraine also announced last year that smoking would be banned in playgrounds and in cars with passengers under 12. Tobacconists in France staged protests in several regions against the measures.


The Darker Side of the TTIP Agreements

The Transatlantic Trade and Investment Partnership (TTIP) is a bi-lateral free trade agreement which is currently under negotiations between the US and EU. As an intergovernmental organisation, the treaty aims to eliminate barriers to trade and open government procurement markets to delivery from foreign competitors. Studies by the Centre for Economic Policy Research (CEPR) claim:

“Estimated potential gains for the EU are circa £85bn a year and £68bn for the US. The UK is expected to benefit by an increase in annual national income of up to £10bn, leaving the average household £400 better off per year.”

However independent analysis of key documents surrounding this agreement are in actual fact antithetical to the above reports. Research conducted by Dr. Gabriel Siles-Brügge from The University of Manchester claim that:

“An impartial reading of these key documents show quite clearly that these huge figures are vastly overblown and deeply flawed”

These conflicting studies quite clearly demonstrate the need for further independent research into the potential benefits of TTIP to fully ascertain whether it would be beneficial for both the EU and UK.


Despite lobbyists citing the myriad of economic benefits to host nations, critics have displayed their disapproval over the covert and surreptitious nature of the talks. They claim that democracy would be undermined, regulatory standards will be diminished, and lastly governments would ultimately be forced to a ‘race to the bottom’ through the controversial ‘Investor State Dispute Settlement (ISDS)’, one of the key features of TTIP.

Democratic deficit

Many opponents have asserted that the highly controversial ISDS inherent in TTIP represents a major attack on democracy. This feature enables multinational corporations to sue foreign governments over claims of unfair treatment, or for any government policies that cause losses in profit. In short, national governments are heavily undermined and the demands of citizens are subservient to those of unelected corporations. In the past, Tobacco giant Phillip Morris sued the Australian government over a new rule making plain packaging mandatory for cigarettes. Despite this legislation being passed by the government, under the bilateral investment treaty Phillip Morris invoked the Investor State Dispute Settlement clause requesting compensation for losses in intellectual property. The harsh reality is that this case is not isolated; in actual fact there have been multiple cases pertaining to corporations suing nationally elected legitimate governments. Recently, Germany was sued $6bn for damages by a Swedish state-owned power company Vattenfall for the government’s decision to close two nuclear power stations for the safety of its citizens. The list of corporations suing governments seems endless. From Argentina being sued by international utility companies to Canada being sued by American drug corporations. The list goes on and on. This is perhaps why many authors have labelled the:

“This transatlantic trade deal a full-frontal assault on democracy.”

In the UK the most obvious threat is the National Health Service, which may be susceptible to US companies and Wall Street Investors – a form of privatisation the public have been vehemently against. However, despite this scaremongering from TTIP opponents, the European commission have elucidated that public services will be strictly kept out of TTIP. Question marks still remain though whether the NHS would or would not be included in the deal with the current Tory government appearing to privatise by stealth:

“Tories sign largest privatisation deal with 11 private firms worth £780m”

In short, whether the NHS will be included remains to be a grey area.

Regulatory standards

TTIP proposes for a convergence of EU and UK regulatory standards towards US standards. A convergence of such may see an influx of genetically modified foods products enter the EU markets. Opening the market to cheaper products with lower standards can undermine the UK’s welfare and regulatory standards on food quality. Critics moot the TTIP agreement succumbs EU and UK markets into a race to the bottom in terms of food standards. The same rhetoric can be applied to animal welfare, financial regulation, labour standards and trade unions. On balance, there is a general consensus that the harmonisation of standards will lead to a reduction in standards.

Timetable of events

A report issued by the European Council last December called for EU and US leaders to conclude negotiations by the end of 2015. However, this seems challenging given the growing opposition and technical arrangements of the deal. There has been growing concern in other EU states including Germany and France who fear for their privacy and culture respectively. Instead the deal is likely to be concluded in early 2016 with the agreement then having to be ratified by the European Council and the European Parliament.

Final remarks

TTIP is clearly a highly controversial topic and it appears that the negatives outweigh the strengths. Perhaps the most mooted area surrounding this prospective agreement is that of democracy. States are meant to create a communal identity in which they derive their legitimacy through us who vote for them to be an actor in our name. However through arrangements such as TTIP, does that undermine their legitimacy? Since states are no longer acting in our name but instead in the name of unelected multinational corporations, what derives the states legitimacy over us?

Chamber of death: America’s top business group promotes smoking

By the Editorial Board

American business has always been the business of the U.S. Chamber of Commerce. But why does the chamber go out of its way around the globe to advocate the dirty, unhealthful business of cigarette smoking?

The nation’s premier business association, which officials in other countries sometimes mistake for an arm of the U.S. government, has become the chief promoter of the tobacco industry’s agenda, according to a recent report in The New York Times. The chamber uses a country-by-country strategy to block, delay or kill initiatives meant to steer people in developing countries away from tobacco use.

Efforts that have been opposed by the chamber or its agents include: raising cigarette taxes in the Philippines, restricting smoking in public places in Moldova, barring cigarettes from display by retailers in Uruguay and putting explicit health warnings on cigarette packs in Jamaica and Nepal. By attacking the kind of progressive measures that are commonplace in the United States, the chamber is trying to inflict on foreign consumers the outdated, dangerous mindset of the early 1960s. In 2015, Americans know well the perils of smoking. The U.S. Chamber of Commerce, chillingly, wants to keep the rest of the world in the dark.

The chamber also is lobbying to enable tobacco companies to sue under new international treaties, such as the Trans-Pacific Partnership, when nations enact statutes, even health laws, that could have a negative impact on the tobacco business. Talk about the ugly American.

In its defense, the Chamber of Commerce says it is just looking out for the interests of one of its member industries. But what about the views of other chamber members? What about health care businesses that have preached for decades about the ills of tobacco use? CVS Health resigned from the chamber in protest.

A respectable U.S. Chamber would stop shilling for cigarettes, smoking, lung cancer and emphysema before vulnerable foreign populations. America already has enough merchants of death.