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No Exclusions! Why Carveouts Would Weaken the Trans-Pacific Partnership

The goal of the Trans-Pacific Partnership (TPP) is to craft a high-standard free trade agreement for the 21st Century that will create jobs and economic growth by reducing tariffs and trade barriers on all goods and services.

In an op-ed in the Singapore Straits Times [subscription required], Wan Saiful Wan Jan, head of the Institute for Democracy and Economic Affairs, explains why excluding even politically unpopular products like tobacco would prevent that goal from being achieved:

There is no debating that cigarettes are harmful. But if this exemption becomes law, it would establish a frightening precedent for other types of exemptions.

The TPP agreement is supposed to represent a trade framework suitable to the hyper-integrated, fluid global economy of the 21st century.

Singling out tobacco is unnecessary because TPP, like other trade agreements, won’t limit the ability of member countries from crafting public health regulations.

Furthermore, singling out one product will open a Pandora’s Box as other governments go after their particular bête noirs. Under the guise of public health regulations, countries could erect protectionist barriers to alcoholic beverages, sugary soft drinks, genetically-modified foods, and other products.

Wan Jan writes:

If a nation is charged with violating a free-trade pact by sheltering a favoured industry, it could then cite the tobacco exemption to legally justify targeted protectionism. Special interests would be fully empowered to warp global trade channels.

Instead of a trade agreement fit for a modern, global economy, we’d end up with something that will impede trade, Wan Jan notes:

A warped TPP that arbitrarily diminishes trade protection for one specific product category would reset the international trading system back to the 19th century, when global trade was plagued with costly and inefficient barriers to commerce.

Because TPP will set the standard for free trade agreements in the decades ahead, it’s crucial that it be a comprehensive, high-standard agreement.

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