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Big tobacco bullies the global south. Trade deals are their biggest weapon

The industry has a long history of using trade to force their products into new markets. This has led to at least a 5% increase in cigarette deaths

Cigarette packets often carry the warning to “protect children: don’t make them breathe your smoke”. In 2014, the Kenyan government attempted to do just that – banning the sale of single cigarettes, banning smoking in vehicles with a child and keeping the tobacco industry out of initiatives aimed at children and young people.

But as the Guardian reported last week, British American Tobacco, in an effort to keep Kenyans breathing their smoke, fought the regulations on the grounds that they “constitute an unjustifiable barrier to international trade”.

In fact, big tobacco has a long history of using trade and investment rules to force their products on markets in the global south and attack laws and threaten lawmakers that attempt to control tobacco use.

Back in the 1980s, as cigarette consumption fell off in North America and western Europe, US trade officials worked aggressively to grant American companies access to markets in Asia, demanding not only the right to sell their products, but also the right to advertise, sponsor sports events and run free promotions. Smoking rates surged.

In the 1990s, World Trade Organisation agreements led to a liberalisation of the international tobacco trade, with countries reducing import tariffs on tobacco products. The impact, according to a joint study of the World Health Organisation and the World Bank, was a 5% increase in global cigarette consumption and accompanying mortality rates.

Big tobacco’s lawyers were quick to discover the value of “next generation” trade agreements. In the 1990s, Canada dropped a plain packaging initiative after US manufacturers threatened a suit using the first next-gen trade deal, the North American Free Trade Agreement (Nafta). A few years later, Philip Morris threatened Canada again after it prohibited terms such as “light” and “mild” cigarettes. Philip Morris argued it would be owed millions in compensation for damage to its brand identity.

Philip Morris was able to credibly wield this threat because of the extraordinary powers that Nafta grants international corporations: the right to sue governments in private tribunals over regulations that affect their profits.

A toxic combination of far-reaching and poorly defined “rights” for investors, eye-watering legal costs, and tribunals composed of corporate lawyers with the power to set limitless awards against governments makes investment arbitration and the modern “trade” agreement a formidable weapon to intimidate regulators.

And what big tobacco learned in the global north it has been replicating in the global south, where threats carry greater force against poorer countries that may lack the resources to see down a legal challenge.

In 2010, Philip Morris launched a $25m claim against Uruguay after it introduced graphic warnings on cigarette packs. Though Uruguay successfully defended the measure, it still faced millions in legal costs. And Philip Morris effectively won, as Costa Rica and Paraguay held off introducing similar measures.

Such are the fears around big tobacco’s aggressive use of trade and investment rules that the US-negotiated Trans-Pacific Partnership trade deal featured a carve-out excluding big tobacco from investment protections – an explicit admission of the problem.

But this does not go far enough. The important thing to realise is that the problem goes beyond big tobacco. Big oil, big pharma and big mining follow the same playbook, launching investment arbitration cases to defend their business models from governments that would regulate to protect public health, the local environment or the climate.

Rather than target individual companies or sectors, we must push our governments to reform trade and investment rules that grant such extraordinary powers to corporations. That means removing special investor rights and investment courts from trade agreements. It means removing limits on the freedom of governments to protect public health, labour and human rights and the environment.

Of course, this is easier said than done. Robert Lighthizer, US trade representative, served as deputy in a Reagan administration that pressured countries to open their tobacco markets to US exporters in the 1980s.

Vice-President Mike Pence’s record includes opposing smoking regulation, taking huge campaign donations from big tobacco, and denying the causal link between smoking and lung cancer. The EU commission, meanwhile, has been criticized for its meetings with big tobacco while it was negotiating EU-US trade talks.

The good news is that from Brazil to India to Ecuador, countries are stepping away from outdated trade and investment rules. In the UK, the Labour party manifesto opposes parallel courts for multinationals and proposes to review the UK’s investment treaties.

But until we scrap the powers that we grant big tobacco and others to frustrate and bypass our laws, efforts around the world to protect public health will continue to go up in smoke.

Big Tobacco’s controversial, ailing crusade against plain packaging

THREE years ago, the government of Togo, which has a gross domestic product of $4 billion, received a letter from Philip Morris International, a tobacco giant which last year earned revenues of $74 billion. The country had been mulling bringing in plain packaging for cigarette boxes. It would risk “violating the Togolese constitution”, the firm’s subsidiary explained, “providing tobacco manufacturers the right to significant compensation.” It then outlined how plain packaging would violate binding global and regional agreements. Togo was in no position to anger its international partners, it suggested.

For health advocates, such tactics are the last refuge of firms they have long denounced. But tobacco companies will do what they can to protect their packaging. They detest warnings with repulsive images of decaying body parts. In 2010 Philip Morris sued Uruguay, claiming that big warnings on boxes violated a trade deal. Then two years later Australia became the first country to go further, banishing iconic trademarks from tobacco packs. Its law mandates that brand names—such as Marlboro, Winfield or Dunhill—appear in grey type against a background of Pantone 448C, a putrid green deemed the world’s ugliest colour by a market-research firm.


So tobacco firms sued—in Australian courts, before a UN tribunal and by supporting countries that challenged the rule before the World Trade Organisation (WTO) on the ground that banning trademarks represents an expropriation of intellectual property (IP). Less formally, they and allies have lobbied against warnings and plain packaging in places ranging from Namibia to New Zealand. It has all been surprisingly effective. Until very recently, Australia has been the only country to ban tobacco trademarks from cigarette packs.

Such avenues may be closing. Although the WTO’s decision is still pending, firms lost their other suits against Australia. Last month arbitrators at the World Bank threw out the lawsuit against Uruguay. In May the European Court of Justice upheld a rule on big warnings and Britain’s High Court confirmed one for plain packaging. It seems likely that more governments will in future prioritise public health over IP. Canada, France and Ireland are already moving towards plain packs.

If so, ugly packaging could become the most damaging rule tobacco firms have faced in years. To date many laws have hurt firms in some ways but also, strangely, helped them in others. Bans on advertising lower their costs. Small competitors, unable to advertise, struggle to grow. High excise taxes can be another boon: when taxes are fixed and large, a big increase in the underlying price of a pack amounts to a relatively small rise in the pack’s total price. High prices have sustained tobacco firms, even as smoking rates decline. “They probably have the best pricing power of any industry,” says James Bushnell of Exane BNP Paribas, a broker.

But plain packaging clamps down on one of their last bits of advertising. The design of the box is where they must convey not only the name of the brand but abstract qualities, such as masculinity or the idea that a product is “premium”, and worth an extra outlay. If such traits are stripped from packs, consumers may choose cheaper brands. That is particularly worrisome in emerging markets, says Mr Bushnell, where standard packs would threaten the aspirational appeal of smoking. Other “sin” industries are worried. The International Trademark Association frets that governments might strip trademarks from junk food and liquor.

It may become pointless for cigarette firms to start legal proceedings. The Trans-Pacific Partnership (TPP), a pending free-trade agreement among 12 countries, shields governments from lawsuits over tobacco rules. It may unravel, but future pacts could have similar terms. Only America, where the right to free speech makes standard packs highly unlikely, may remain an anomaly (though it is a signatory to the TPP). In the past investors often viewed a new wave of rules on tobacco as a chance to buy tobacco stocks inexpensively, before they resumed their steady rise. This time may be different.

Is TPP a public health threat?

The Government should bar certain industries from exploiting the Trans-Pacific Partnership (TPP) lest they damage public health, health activists warned recently.

The historic free trade agreement is set to create a freer flow of commerce and win-win trade among its members by establishing a level playing field for all parties and investors.

Yet it might challenge the Government to implement measures to protect the public health when some industries, like tobacco and alcohol, take advantage of the TPP to expand their businesses, said Mary Sunta, a senior policy consultant of the Southeast Asia Tobacco Control Alliance.

She addressed the issue at a workshop on the impacts of TPP on public health held in Ha Noi yesterday.

“As far as I am concerned, there are seven chapters in the TPP vulnerable to any challengers of the tobacco industry,” Sunta said.

Those chapters include provisions regarding tariff removal, which could result in lower cigarette prices and a cigarette package without pictorial warnings.

“As a matter of fact, applying a higher tariff/tax on cigarettes and its selling prices is proven to be the most effective strategy to reduce the tobacco demand in the short-term,” Sunta said.

Statistics of the World Health Organisation (WHO) show that Viet Nam is ranked 15th in the world in terms of the number of smokers – about 40 per cent of men smoke.

About 72,800 people died of tobacco-caused diseases, equal to a loss of roughly US$78 million every year, according to the Tobacco Atlas.

TPP’s provisions are likely to cause a similar headache for the Government in another health-affected industry in Viet Nam that has shown remarkable growth in the last decade: the alcohol industry.

Member parties of the TPP committed to bring the tariffs of alcoholic beverages, from beer to wine and whiskies, down to zero over a 12-year span.

The TPP enactment is expected to open wide the door for foreign alcoholic beverage manufacturers, especially from the US, into the Vietnamese market, which has already been seeing a strong growth of demand averaging 10 per cent a year.

Efforts to force higher price tags on the beverages to reduce the alcohol consumption are deemed difficult for the Vietnamese Government due to the tariff removal commitment in the TPP, while criticism from other states and alcohol manufacturers might hurt Viet Nam in implementing other measures, like limiting advertisement and stamping health warnings on the products. Those measures are likely to be categorised as technical barriers to trade.

Dispute settlement

The TPP includes a legal mechanism to settle disputes between foreign investors and their host country, called the ISDS (Investor-State Dispute Settlement). Under the IDSD, foreign investors can legally challenge host state regulations outside that country’s courts.

The ISDS has been used several times since its introduction in international trade agreements, most notably by the tobacco industry.

Many countries like Thailand, Australia, Uruguay and Sri Lanka were sued by tobacco companies when they tried to pass a law on the cigarette packaging to raise public awareness of the dangers of smoking.

The ISDS is also available to claims by alcohol or asbestos producers.

“Asbestos was found to cause cancers since 2001. Any companies that import, distribute and use asbestos should be exempted from the IDSD provision,” said Tran Tuan from the Advocacy Network on Banning Asbestos Use in Viet Nam (VN-BAN).

Viet Nam is among the top 10 countries in the world using asbestos – a carcinogenic substance as categorised by the International Agency for Research on Cancer (IARC).

The historic TPP was signed on February 4, 2016 in Auckland by 12 states including Viet Nam, Brunei, Malaysia, Singapore, Chile, Peru, Canada, Japan, Australia, New Zealand, Mexico and the United States, after seven years of negotiations.

The trade agreement is awaiting ratification by each of its member countries before entering into force. Viet Nam expects to ratify the agreement late this year.

As an attorney general, I sued the tobacco companies. ExxonMobil is nothing like them.

I was one of 46 state attorneys general who signed the tobacco Master Settlement Agreement in November 1998. On behalf of New York’s taxpayers, I filed one of the suits that eventually pushed the cigarette makers to settle. I can tell you from experience that our fight against the tobacco industry has almost nothing in common with today’s campaign by several state attorneys general against ExxonMobil — despite what supporters of the effort would like you to believe.

In the case of tobacco, we made a powerful argument that decades of lying by the companies had led to intractable addiction of millions of Americans who suffered devastating illnesses and death, all of which cost the states billions every year in Medicaid expenses. In the current action, a group of Democratic attorneys general, acting as part of a campaign launched by well-heeled special interest groups and financial backers of alternative energy companies, have a different goal: using the power of state attorneys general to curb honest debate. (Disclosure: My law firm is representing two New York state municipalities that are challenging the siting of wind turbine projects on the shore of Lake Ontario.)

The tobacco campaign was highly successful. The settlement agreement included not only direct payments to the states (currently $9 billion a year) but also imposed severe marketing restrictions to limit outreach to young smokers. Largely as a result, the proportion of high school student smokers dropped from 36 percent in 1997 to just 16 percent in 2013; adult smokers, from 25 to 17 percent. I was proud to play a major role in holding tobacco companies responsible for the damage they caused and in setting America on a healthier path. We had a clear, convincing legal case and a noble cause. The same cannot be said for attorneys general involved in the current crusade.

It’s unlikely they will be successful in their legal actions, and their actions may have already chilled free speech in this country.

ExxonMobil was subpoenaed last fall by New York Attorney General Eric Schneiderman (D) in an effort to find out whether the company misled investors and the public on the impact of climate change. Massachusetts joined in. Then, in March, the Virgin Islands, a U.S. territory, started investigating ExxonMobil, as well as think tanks and other institutions that received the company’s support, under an anti-racketeering law. Later that month, 16 state attorneys general, all Democrats, held a news conference under the banner, “AGs United for Clean Power,” to announce they too will pursue energy companies that challenge the global-warming orthodoxy.

But increasingly, Schneiderman appears to be on his own. Last week, Claude Walker, the attorney general for the Virgin Islands who opened a racketeering probe of ExxonMobil, withdrew his subpoena. And Maura Healey, attorney general for Massachusetts, delayed action on her own subpoena of ExxonMobil, meaning that case has paused.

It is important to note that the fight against the tobacco industry was bipartisan and that never, during our battle to require the tobacco companies to meet their obligations, did we align ourselves with the industry’s business competitors. In the current campaign, the attorneys general have linked up with investors in renewable energy in an unseemly alliance that presents serious conflicts of interest. As a June 15 letter signed by 13 AGs critical of their colleagues noted, “The media event [in March] featured a senior partner of a venture capital firm that invests in renewable energy companies. If the [AGs’] focus is fraud, such alignment by law enforcement sends the dangerous signal that companies in certain segments of the energy market need not worry about their misrepresentations.”

Attorney General Schneiderman’s theory is apparently that ExxonMobil pulled the wool over America’s eyes by manipulating public opinion. “There is confusion,” he said, “sowed by those with an interest in profiting from the confusion and creating misperceptions in the eyes of the American public.” One could argue that the same confusion and misperception has been caused by alternative energy proponents. Causing confusion — if that’s what happened — is hardly a crime, but to hold one party to a national debate to a higher standard tilts the debate unfairly in the other direction.

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Notably, the attorney general is pursuing his investigation under the Martin Act, a sweeping New York law that I know well. It gives the attorney general broad subpoena power, and it allows charges to be filed even without evidence that the defendant intended to commit fraud. It is a powerful tool to protect investors but can have unintended negative implications to the very investors it seeks to protect.

In the case of tobacco, we found that the companies knew about the life-threatening, addictive nature of smoking but covered up that knowledge. In the case of global warming, ExxonMobil began research as early as the 1970s and was open about what it found in more than 50 papers published in scientific journals between 1983 and 2014, according to company documents. ExxonMobil’s scientists have participated in the U.N. Intergovernmental Panel on Climate Change since its inception and were involved in the National Academy of Sciences review of the third U.S. National Climate Assessment Report.

In its news pages, even the New York Times, a forceful environmental advocate, has drawn a clear line between the tobacco and energy industries. Reporters Justin Gillis and Clifford Krauss wrote in a Nov. 5 article, “In the 1950s and ’60s, tobacco companies financed internal research showing tobacco to be harmful and addictive, but mounted a public campaign that said otherwise. . . . The history at ExxonMobil appears to differ, in that the company published extensive research over decades that largely lined up with mainstream climatology.”

The tobacco companies were deceivers. ExxonMobil has been open. But that doesn’t seem to matter to the politicized attorneys general pursuing the company. A chilling impact on public debate is not in our collective interest.

Plain tobacco packaging likely early next year


Here’s how cigarette packs could soon look – a standard package with gruesome warning image.

The packaging was revealed at a smokefree event on Wellington’s waterfront and could be rolled out early next year.

The prop design at the event is not the final design – the Government will now consult on plain packaging, including design for packs.

Associate Health Minister Peseta Sam Lotu-Iiga has released draft regulations and a consultation document which aims to standardise the look of cigarette packs.

“The design and appearance of cigarette packets are powerful marketing tools for vendors. The Government is proposing to use the standard brown-green packaging which is similar to what is used in Australia,” Mr Lotu-Iiga said.

“We’re proposing that mandatory health warnings will cover at least 75 per cent of the front of the packs and all tobacco imagery will be removed. Brand names will be allowed but regulations will standardise how and where the printing is.”

Plain packaging is likely to be in place early next year – but officials need better information before deciding if e-cigarettes can be made legal, Prime Minister John Key says.

Tax on tobacco will be significantly hiked and the Government will forge ahead with plain packaging, despite a legal risk backed by tobacco giants.

“Nothing kills you with greater predictability than smoking,” Mr Key said of the plain-packaging change.

“It will take some time before you actually see it on the shelves [plain packaging]. My expectation would be early next year.”

Certain tobacco researchers are urging the removal of restrictions on buying e-cigarettes containing nicotine.

Nicotine patches and gum can be bought, but nicotine e-cigarette liquid must be bought from overseas. Other countries, like the UK, allow the products to be sold in supermarkets and dairies.

However, there are fears young people could use the devices. Mr Key said he had received advice on the usefulness of e-cigarettes and vaping.

“The advice I’m getting so far is that there may be a role for e-cigarettes in terms of people transitioning away from smoking. But I think the health impacts are very unknown at this point. So there is some concern, at least by officials, that there may be long-term health impacts.

“We don’t have enough good data at this point to make a call on that. In the short term, people certainly are using them to transition. That might be a helpful way of weaning off cigarettes, but long-term we’ll need to get better advice and data.”

Maori Party co-leader Marama Fox told the smokefree gathering that politicians should lead by example and make the Parliamentary precinct smokefree.

That led to a crack from Labour MP Rino Tirikatene, who tweeted that the Maori Party and their “mates” National were “slowly turning Aotearoa into a kuia state”.

Labour leader Andrew Little said he needed better information before making a call on whether e-cigarettes should be made available. Plain packaging was supported by Labour.

New Zealand had been keeping an eye on the outcome of legal challenges against Australia’s plain packaging, one from tobacco firm Philip Morris and another from tobacco-producing countries via the World Trade Organisation (WTO).

Australia won the case against Philip Morris in December.

The WTO challenge is ongoing, but Mr Key has said he received advice late last year that the Government was on a “firm footing” to progress plain packaging because several other countries, including the UK and Ireland, had introduced it.

These countries did not face a challenge under the WTO.

The Trans Pacific Partnership (TPP), signed on February 4, also allows tobacco-control measures, so New Zealand could advance anti-smoking policies without risking a legal challenge.

A pack of 20 cigarettes will increase from about $20 now to around $30 in 2020 after hefty excise increases were announced as part of last week’s Budget.

The tax on tobacco will rise by 10 per cent on January 1 each year for the next four years.

That is expected to bring in an extra $425 million in tax over that period.

It will affect the about 15 per cent of adult New Zealanders who smoke each day – about 550,000 people.

That rate increases to 35 per cent for Maori, and 22 per cent for Pacific people.

The tax hikes are part of measures designed to make New Zealand smoke-free by 2025, a key goal of the Maori Party.

Asked if that was realistic, Mr Key said his confidence was increasing, as there was increasing momentum behind the smokefree movement.

Doubts rise over TTIP as France threatens to block EU-US deal

French president rejects trade pact in current form as lead negotiator blames Washington for impasse a day after leak revealed ‘irreconcilable’ differences

Doubts about the controversial EU-US trade pact are mounting after the French president threatened to block the deal.

François Hollande said on Tuesday he would reject the Transatlantic Trade and Investment Partnership “at this stage” because France was opposed to unregulated free trade.

Earlier, France’s lead trade negotiator had warned that a halt in TTIP talks “is the most probable option”. Matthias Fekl, the minister responsible for representing France in TTIP talks, blamed Washington for the impasse. He said Europe had offered a lot but had received little in return. He added: “There cannot be an agreement without France and much less against France.”

All 28 EU member states and the European parliament will have to ratify TTIP before it comes into force. But that day seems further away than ever, with talks bogged down after 13 rounds of negotiations spread over nearly three years.

The gulf between the two sides was highlighted by a massive leak of documents on Monday, first reported by the Guardian, which revealed “irreconcilable” differences on consumer protection and animal welfare standards. The publication of 248 pages of negotiating texts and internal positions, obtained by Greenpeace and seen by the Guardian, showed that the two sides remain far apart on how to align regulations on environment and consumer protection. Greenpeace said the leak demonstrated that the EU and the US were in a race to the bottom on health and environmental standards, but negotiators on both sides rejected these claims.

The European commission, which leads negotiations on behalf of the EU, dismissed the “alarmist headlines” as “a storm in a teacup”.

But Tuesday’s comments from the heart of the French government reveal how difficult TTIP negotiations have become.

France has always had the biggest doubts about TTIP. In 2013 the French government secured an exemption for its film industry from TTIP talks to try to shelter French-language productions from Hollywood dominance.

Hollande, who is beset by dire poll ratings, indicated on Tuesday that the government has other concerns about TTIP. Speaking at a conference on the history of the left, Hollande said he would never accept “the undermining of the essential principles of our agriculture, our culture, of mutual access to public markets”.

Fekl told French radio that the agreement on the table is “a bad deal”. “Europe is offering a lot and we are getting very little in return. That is unacceptable,” he said.

The director of Greenpeace EU, Jorgo Riss, said the French president’s concern was “unsurprising given that the commission is clearly not following the mandate it was given by EU countries to protect European environmental and health standards”.

The question marks over TTIP are a setback for the British prime minister, David Cameron, who last year vowed to put “rocket boosters” under the talks as he described TTIP as “a deal we want”. But Barack Obama has made it clear that the UK would not get any special treatment if it left the EU and tried to negotiate a separate trade deal. On a visit to London last month, the US president said the UK would be at “the back of the queue” in any post-Brexit trade talks.

The most recent round of TTIP negotiations took place last week, where EU and US officials reiterated that they hoped to reach a deal in the second half of 2016, before Barack Obama leaves the White House next January.

Talks began in July 2013, but rapidly became bogged down amid widespread public concern on both sides of the Atlantic. Reducing tariffs is only a small element of the trade pact. The most contentious issues centre on aligning consumer and environmental standards and opening up markets to transatlantic rivals.

#TTIPLeaks and Bridging the gap between trade and public health

EPHA believes that greater transparency is vital to ensure proper democratic and public debate about the impact of trade policy on population health, following Greenpeace Netherlands’ release of classified TTIP negotiating documents

The following key public health aspects of the leaked texts merit further attention from EU trade negotiators:

Transparency is essential to ensure decisions about health standards are made democratically, particularly regarding policies such as TTIP which influence public health.

As Greenpeace has stated, there has been worldwide criticism, including from the European Ombudsman, about the ongoing refusal to reveal what is being negotiated under TTIP. Whilst some EU documents are disclosed, US negotiators disclose almost nothing at all.

While Commissioner Malmström has argued in her latest blog in reaction to the leak that the consolidated texts are not the final text in TTIP, EPHA still maintains its concerns regarding how those texts will be negotiated into the final, legally binding treaty. To allay public and civil society concerns, the documents need to be made freely available.

While the main focus is on non-tariff barriers and the right to regulate, there are still significant tariffs on some health-harmful goods including tobacco and processed foods high in salt, sugar and fats. We must not miss the point that removal of tariffs on health-harmful goods will also further accelerate the epidemic of chronic diseases in Europe, such as type-2 diabetes, cardiovascular diseases, respiratory diseases and cancers. So far the Commission has neglected to evaluate the health impact, but no doubt it would offset a significant portion of the purported economic benefits of TTIP.

Concerning the public health relevance of the 13 leaked documents, particular attention should be paid concerning the following sections:

• Regulatory cooperation: While the reference to public health impact assessment is welcome, the consolidated document maintains worrying elements such as ‘Transparent Development of Regulation’, ‘Trade effects’, ‘Retrospective Review of Regulations’, ‘Regulatory Impact Assessment’ which may delay, weaken or prevent further regulation. Greenpeace link –

• EU-US revised Tariff offers on products – such as tobacco, refined sugar, chocolate, meat and food preparations, where consumption is linked to the increase in Non-Communicable Diseases (NCD) – are particularly critical for health and are notably excluded from the EU-US offers. Greenpeace link –

• Government Procurement – It is problematic that the chapter would make local procurement more difficult for local providers while it is not clear if appropriate safeguards on health service providers (eg. Hospitals) will be built in in the text. Greenpeace link

• Cross Border Trade in Services – Public services essential for population health (social, healthcare, education, water and sanitation) are not generally excluded – like the film and music industry. To assess the impact on health systems the content of the Annexes is key. Greenpeace link –

• Investment Dispute Settlement – It is worrying that this does not appear to include appropriate safeguards for the right to regulate for public health in the proposal and interestingly, there is no general exception of tobacco control measures ( ‘tobacco carve out’). EPHA is calling for a public health carve out instead of a tobacco carve out.

Greenpeace link –

• Sanitary and Phytosanitary Measures – While the final safeguards should be checked, it is worrying that there is no recognition of the latest EU proposal on antimicrobial resistance (tackling drug resistant infections) in the text. Greenpeace link…

• Agriculture – As well as our concerns regarding the link between increased trade of agricultural products and diet-related chronic diseases, it is particularly worrying that the EU proposal on Wine and Spirits in this chapter does not mention either reducing alcohol related harm, health-specific aspects of labelling or health NGO involvement.

Greenpeace link

• Technical Barriers to Trade – While the incorporation of the WTO Agreement on Technical Barriers to Trade raises some questions, the impact of the chapter on public health regulations remains to be seen

Throughout EPHA’s campaign for a healthy trade agreement, we have highlighted seven key areas of concern for the ongoing negotiations:

1. TTIP should support the Sustainable Development Goals (SDG) – Today’s main public health challenges both in the EU and the US are chronic diseases, overweight and obesity, largely avoidable and linked to unhealthy food, tobacco and alcohol, as well as the rising threat of drug-resistant infections (antimicrobial resistance) which could undermine all the progress made against infectious diseases around the world in recent decades. TTIP cannot be sustainable if it fails to address the public health aspects of trade. We call for a Public Health Sustainable Development chapter in TTIP, to ensure that trade agreements actively support healthier societies.

2. TTIP must reinforce the global Framework Convention on Tobacco Control (FCTC) – Given the deadly impacts of tobacco consumption around the world, TTIP should not be neutral in relation to tobacco. It must not increase the availability, affordability or attractiveness of tobacco products. TTIP must be brought into line with the FCTC, meaning tobacco lobbyists must be actively excluded from influencing the trade negotiators in both the US and EU. Governments must be actively encouraged to introduce stricter tobacco control policies such as plain tobacco packaging.

3. TTIP must take a responsible stance on alcohol – Like tobacco, alcohol is a commodity where increased availability and lower prices are likely to have a negative impact on public health, society and economy. When negotiating the ’Wine and Spirits’ Chapter, which is a priority for the EU, negotiators should take into account the findings of a recent OECD report on alcohol related harm.

4. Consider health impacts of removing tariffs on unhealthy food – There are still significant tariffs on unhealthy processed foods from the US that TTIP may seek to remove. Increased consumption of unhealthy food (processed foods high in saturated fat, sugar and salt) is not beneficial for the consumer nor the country as a whole, as high rates of diseases related to malnutrition, overweight and obesity impose a threat to economic productivity. While public interest civil society organisations raised concerns about Agriculture as a sensitive issue, the European Commission has not yet assessed the significant health impacts of tariff reductions on unhealthy food or looked at measures to mitigate harm to health.

5. TTIP should aim to make medicines more affordable – While there is no discussion yet of ’Pricing and Reimbursement’ measures in TTIP which would undermine governments’ ability to make policy decisions, TTIP should tackle the different forms of abuses of patent protection which make essential medicines unaffordable for many.

The negotiations on regulatory cooperation on pharmaceuticals aiming at eliminating duplications in trials and testing, should aim to make medicines cheaper. Medicines price evolution should be monitored by the Commission to ensure this is the case.

6. Investment protection must not undermine public health legislation – Neither an Investor-to-State Dispute Settlement (ISDS) nor a parallel Investment Court System (ICS) are necessary in TTIP as both the US and the EU are stable democracies, with mature established Court systems and legislatures. Nevertheless, any investment protection system should not allow claims questioning public health legislation (eg. those tackling key causes of disease such as alcohol, tobacco or unhealthy food).

7. Horizontal chapters on Regulatory Cooperation and ’Good Regulatory Practices’ must not restrict future public health policy – Regulatory Cooperation should not limit the health policy space available for governments to protect and improve public health. Regulatory autonomy is required for governments to tackle today’s main public health challenges: chronic diseases, overweight and obesity, and drug-resistant infections.

Pressure grows for Commission President Juncker to end tobacco lobbying secrecy

Splits occur within European Commission, as European Parliament, Ombudsman and NGOs increase the pressure for implementing UN rules for contacts with tobacco industry lobbyists.

In February, European Commission President Juncker took many by surprise by flatly rejecting a European Ombudsman’s ruling recommending full transparency around tobacco industry lobbying. The previous autumn (after an investigation sparked by a complaint by Corporate Europe Observatory), Ombudsman Emily O’Reilly had slammed the Commission’s failure to comply with the World Health Organisation’s Framework Convention on Tobacco Control as ‘maladministration’. The ruling urged the Commission to publish details of all meetings with tobacco lobbyists online. Four months later Juncker responded by claiming that the Commission “complies in full” with the UN rules, repeating the unconvincing argument that its general rules in the field of transparency and ethics are sufficient.

In her speech “Combating tobacco industry tactics: State of play and a way forward” in the European Parliament a few weeks later, O’Reilly expressed strong regret “that the Commission declined to accept my recommendation to extend proactive tobacco lobbying transparency across all DGs and across all levels of the service.” “And, given the stated commitment of the EU to the Convention”, the Ombudsman added, “I confess to being puzzled as to why that is.” In the conclusions of her speech, O’Reilly offered at least a partial explanation, stating that “the sophistication of the tobacco industry’s global lobbying efforts is still seriously underestimated”.

The Ombudsman, fortunately, has far from given up. Within a few weeks, she will publish a final ruling on the case. O’Reilly is also organising an official hearing in the European Parliament on “Improving transparency in tobacco lobbying”. Among the speakers will be Vytenis Andriukaitis, European Commissioner for Health. Andriukaitis has recently voiced strong disagreement with Juncker’s rejection of the Ombudsman’s recommendations. Last month, Andriukaitis revealed at a conference in the European Parliament that Juncker’s response to the Ombudsman had not been discussed in the College for Commissioners. He reported that it was drafted by the Commission’s Legal Services, signed by Juncker and sent to the Ombudsman without consulting other commissioners.

In a resolution approved in a plenary vote last month, the European Parliament added to the pressure on the Commission, stating its concerns about the Ombudsman’s finding that the Commission was “not fully implementing UN WHO rules and guidelines governing transparency and tobacco lobbying”, adding that the Parliament “is of the opinion […] that the Commission’s credibility and seriousness have been endangered”. The Parliament’s resolution “urges all the relevant EU institutions to implement Article 5(3) of the WHO Framework Convention on Tobacco Control (FCTC) in accordance with the recommendations contained in the guidelines thereto”.

In his response to the Ombudsman, Juncker argued that tobacco lobbying transparency is not needed because the number of meetings between top officials and tobacco lobbyists has decreased since decision-making on the Tobacco Products Directive came to an end in 2014. This is a clear example of the European Commission seriously underestimating the lobbying efforts of the tobacco industry. Tobacco lobbyists are now targeting other issues, such as EU trade policy (TTIP and other trade negotiations), the renewal of the controversial agreements with four tobacco giants on combating illicit trade in tobacco, and the battle around the choice of technology for high-tech digital watermarks in tobacco packaging to prevent counterfeiting. New documents uncovered by CEO – see box below – show the tobacco industry is also making full use of the Commission’s flagship “Better Regulation” initiative in attempts to weaken tobacco control measures such as health warnings on cigarette packs. This has included attempts to bypass the health commissioner by lobbying the cabinet of Commission Vice-President Timmermans, who is responsible for ’Better Regulation’.

The European Parliament, the health commissioner and public health NGOs are calling on the Commission to accept the Ombudsman’s recommendations. So what is Juncker waiting for?

Tobacco industry lobbyists using the Commission’s “Better Regulation” agenda

After attending a BusinessEurope meeting with the Commission on the Commission’s “Better Regulation” package, Japan International Tobacco (JTI) requested a meeting with the cabinet of Commission Vice-President Timmermans to “discuss a number of specific areas”. When the meeting happened (November 25 2015), the JTI lobbyists only raised “a very specific issue” concerning “the placing of health warning on cigarette packs with bevelled sides”. JTI attempted to use the “Better Regulation” agenda in its lobbying on this issue and went to Timmermans’ cabinet to bypass the Commission’s health department. The cabinet member promised to contact the cabinet of the health commissioner “to hear their side of the story”, but the notes of the meeting also stress that “no further commitments were undertaken”. This meeting was disclosed because it involved a top Commission official, but how many more meetings like this are happening at lower levels?

The Australian TPP Experience – The Same but Different

Originally published by the Global Trade and Customs Journal

Volume 11, Issue 4, 2016 with permission of Kluwer Law International.

As in many of the other nations who are parties to the Trans-Pacific Partnership Agreement (TPP), the negotiations leading to agreement on the TPP and its subsequent announcement evinced some widely divergent views in Australia. These views ranged from the ‘fear and loathing’ position to the ‘welcome with open arms’ position between which is a large proportion of the population who have little idea on what the TPP means and generally do not care – as has been the case with all of Australia’s Free Trade Agreements (FTA). However, even within that largely disinterested group, there is an increasing level of concern in Australia with some elements of the TPP and the wider FTA agenda more generally which I will discuss in more detail below. The purpose of this article is to provide the briefest of summaries of the Australian FTA agenda generally, how the TPP fits into that agenda and how it will be endorsed and implemented in the Australian context, including how that implementation could be improved compared to what has happened with other Australian FTA.


In a number of instances, articles on trade and legal developments are written from an academic ‘distance’. In this case I thought it would be dishonest for me to do so. I am a director of the Export Council of Australia (ECA)1 with responsibility for Trade Policy as well as a director of the Food and Beverage Importers of Australia (FBIA)2 and both organizations have been active and vocal proponents of Australia’s Trade Policy and FTA agenda. In fact, in my ECA capacity I appeared in a number of TV and radiointerviews to discuss the TPP in which I was positive as to the opportunities arising from the TPP. I have expressed similar views in articles in the print media as well as in my own articles and in submissions and appeared before a number of Parliamentary Committees considering aspects of Australia’s FTA agenda. I am also a member of a number of consultative bodies established by government agencies to address legal, compliance and practical issues which touch on trade and our FTA agenda. This has brought me into contact with many from government responsible for negotiating the FTA who I respect and admire (and like!). Professionally, I act for a number ofclients who are importers, exporters and service providers in the supply chain who will benefit from the TPP.

Consequently, it would not be unexpected to surmise that I am a fan of the TPP. Any agreement between twelve trading nations to create a new regional trade deal is more admirable and the TPP needs to be seen as ‘TPP1.0’ which both provides benefits and also sets a framework for a wider and more comprehensive agreement as well as keeping up the pressure to encourage other FTA. Yes, the TPP could be better and every FTA could be better, however it needs to be recognized that, like most commercial deals, no one party gets everything they want and every deal requires the art of diplomatic compromise. I think that the esteemed Peterson Institute for International Economics best summarizes the TPP when it describes it as ‘a notable accomplishment “and” a substantial positive response to slowing world tradegrowth and rising trade barriers and a major contribution towards a rules-based global economy’.3

That said, I am by no means blind to the shortfalls in the TPP and other FTAs. I have been actively engaged in work to improve their implementation and defend those whose use of the FTAs may not have been perfect and whoare facing compliance and enforcement action by the border agencies. I have also been an opponent of the increase in legislation and practices adopted here in our anti-dumping and countervailing regime which have the appearance of being biased towards Australian industry against the legitimate interests of overseas exporters, their Australian importers and Australian consumers who pay more than would otherwise be the case for goods subject to those Trade Remedies.However, all things considered I believe the positives of the TPP far outweigh any negatives both for now and into the future. It is certainly the high watermark of Australia’s FTA agenda to date.So, I would now wish to turn to the Australian TPP experience.


The Australian Federation has been in place for 115 years, for about half of which time Australia adopted a largely protectionist approach to trade policy.It has only been of relatively recent time that we have embraced a more open trade policy. That has significantly escalated in the last few years.

Current FTA

Putting to one side, the TPP and a very old and rusty form of limited Trade Agreement with Canada, Australia has FTA in place with:

• New Zealand (ANZCERTA).4
• Singapore (SAFTA).5
• Thailand (TAFTA).6
• United States (AUSFTA).7
• Chile (CAFTA).8
• Japan (JAEPA).9
• Korea (KAFTA).10
• China (ChAFTA).11
• The Pacific Islands (PACER).12
• The ASEAN Nations (in conjunction with New Zealand) (AANZFTA).13

FTA under Negotiation

Australia is currently in negotiations or reportedly soon to commence negotiations with the following parties for the following FTA:

• Indonesia (IA – CEPA).14
• India (AI – CECA).15
• The ASEAN nations and those who have FTA with the ASEAN nations, including New Zealand, India and China (RCEP).16
• The Pacific Islands (a revised and improved version of the current FTA) (PACER Plus).17
• The EU.18


As I indicated above, there were some diametrically opposed views on the TPP in Australia during the negotiations. I was witness to a number of polite public protests conducted by small groups during consultations undertaken by the Department of Foreign Affairs (DFAT) as our lead negotiating agency. There were more protests conducted during the negotiating round which took place in Melbourne, where the police and security presence far outweighed the numbers of protestors. The concerns of the interest groups raising the protests and other objections in Australia seemed to mirror those who objected elsewhere in the TPP nations, although they were nowhere as strident as in the US. I was in Washington DC in June 2015 along with an Australian- American Chamber of Commerce delegation to talk on trade issues at much the same time as the Trade Promotion Authority passed through Congress and I was somewhat surprised at the vehemence of opposition to the TPP and the prominence of those objections including posters in bus stops and flags draped over buildings. During the course of negotiations, most of the objections to the TPP seemed to focus on the following allegations:

• That Australia would not secure many benefits through the TPP as a relatively minor trading nation compared to the other nations. That reflected some ongoing unhappiness over the perceived lack of gains under the AUSFTA, especially from those in the Australian agricultural industry.
• That the sheer complexity of the deal would detract from the ability to secure any potential benefits.
• The suspicion that the negotiations were deliberately being conducted in secret without the release of negotiating text meaning that there was something to hide. Those concerns escalated when agreement on the TPP was announced without the release of the text.
• The alleged absence of useful and effective consultations.
• That Australia was further relinquishing sovereignty to the other negotiating nations and to their corporations. This was especially framed around fears on the inclusion of an Investor State Dispute Settlement (ISDS) provision and the view that the whole TPP was largely aimed at entrenching the rights of multinationals. The concern on an ISDS provision was driven by examples from overseas jurisdiction and the ‘plain packaging’ arbitration being conducted in Hong Kong against the Australian government by the tobacco industry pursuant to a venerable Investment Agreement after the tobacco industry had lost its legal challenge in our High Court.19
• That the US would overwhelm the Australian opposition to the US position on intellectual property, especially in the pharmaceutical arena with the effect that US Biologics would be granted a longer term of IP protection than that which would otherwise be afforded in Australia, causing an increase in healthcare costs.
• It would allow the unrestricted sale of Australian property and other assets to corporations in other TPP nations with the effect that Australia would ‘no longer be for Australians’.
• It would seriously undermine the position of Australian workers by allowing lesser-paid skilled workers in other TPP nations to more readily secure visas come to Australia.

Many of these arguments and concerns had been expressed in the context of other proposed FTA, most particularly during the political and legal debates over ChAFTA.

The responses to these concerns were predictable yet also legitimate. Many of us pointed to the fact that there had, in fact, been extensive consultation on the TPP, that the absence of the negotiating text was consistent with past practice, that an ISDS provision was a legitimate concession to secure the TPP but would be carefully negotiated, that we would ‘hold the line’ on IP protection for Biologics and, importantly, that any decision to depart from negotiations would be a disaster for the remainder of our FTA agenda so that not being in the TPP would be far worse than being in a reasonable although modest TPP.


There was a degree of surprise when the final announcement on agreement on the TPP was made. There had been significant speculation that the deal would be struck and announced after the Ministerial meeting in Maui and the failure to reach agreement there was seen as a sign that the deal could not be done in any circumstances. The subsequent meeting was seen as adesperate measure by the opponents of the TPP and others held no optimism that it could be successful. In some ways, the announcement of a deal having been clinched blind – sided a number of parties – which could explain why the media resorted to dragging me in for comment.

The public announcement of the TPP and its ‘highlights’ received responses from Australian interests which followed their previous positions. The absence of a completed text attracted some adverse comment and fed into the conspiracy theories which swirled around the deal and was supported by the lengthy delay between announcement of ChAFTA and the eventual release of its text. My response to that particular conspiracy theory came from many years of legal practice – that given the last minute negotiations, the text was probably covered in hand – written amendments, yellow sticky notes and emoticons and it would take some time to reduce to proper and correct form.

In sweeping and general terms though, the positive outcomes for Australia significantly outweighed the allegedly negative outcomes and focussed on the following aspects:

• The mere completion of the TPP was cause for celebration as it included many of our major trading partners with whom we had FTAs and delivered improvements in our existing deals with those partners.
• The elimination of more than 98% of tariffs among the twelve countries to the TPP.20
• The elimination of USD 9 billion of Australia’s dutiable exports to TPP countries including USD 4.3 billion on Australian agricultural exports.21
• That it improved outcomes with countries with which Australia already had FTA.
• That it effectively delivered FTA with Mexico and Peru (with whom we did not have any deals) and significant new outcomes in our deal with Canada.
• The TPP was, in itself, an achievement and also set a framework for future improvements, such as the admission of other nations, potentially including South Korea and China.
• The regional nature of the deal would deliver real benefits in cumulation of work across the region and was not merely about the US. For example, significant outcomes had been negotiated to accelerate commitments to Australia by Japan and Korea under our JAEPA and KAFTA.
• The completion of the deal would place pressure on other nations outside of the deal to accelerate their own deals and further improve the trading environment.
• While some of the improvements in market access issues may have appeared to be relatively minor they were, in reality, significant. For example, our sugar industry did not get the significant increase in benefits for which it had hoped but ultimately the TPP delivered a doubling in market access which brought us up to and equal to the rights of any other country including Brazil.
• The concession on the ISDS was subject to valid limits and a rigorous regime which should assist against abuse or the types of ‘compensation’ actions which concerned many parties. Particularly there was a specific ‘carve out’ which protected against ‘tobacco litigation’.
• The inclusion of a provision to advance the interests of Small and Medium Sized Enterprises (SME) for the first time in an FTA.
• Significant advances in the chapters aiming to protect against the adverse competition effects of State – Owned Enterprises and on e-commerce which supported many contemporary trade initiatives.
• New opportunities for the energy and resources sector including in oil and gas exploration and the export of Mining Equipment, Technologies and Services.
• Enhancement of the markets for services exports across the TPP countries.
• Introducing consistency and reducing regulations across the countries.
• Significant new commitments on government procurement and environmental protection.
• Improved transparency on customs procedures and new measures to address non-tariff barriers which become so much more important as duty rates are reduced.

The recent release of a review of the TPP by the World Bank has led to some adverse comment especially in the headline comment that it would ‘only’ deliver a 0.7% improvement to Australia’s GDP by 2030.22 However, even then, there are some recognized limits to that review and it also discloses more significant benefits to other participants which, of themselves are invaluable to the region. In any event, “only” a 0.7% increase is still significant. Ultimately, being in the TPP is a superior outcome than being outside the TPP and the advantages will only increase over time.


Unlike some other TPP countries, the Australian Parliament does not need to ratify the TPP itself. However, there is still a process which does involvepublic and Parliamentary scrutiny:

• Following signing in New Zealand on 4 February 2016, the TPP has been submitted to the Joint Standing Committee on Treaties (JSCOT) for review together with a National Interest Analysis.23 JSCOT only reviews and does not ‘pass’ the TPP but its views and recommendations will be watched carefully as a positive report will assist the approval process.
• The TPP will no doubt be subject to review by other Parliamentary Committees in particular those in the Senate dealing with defence, economics and law.
• Legislation and regulation needed to implement the TPP will need to be passed by Parliament. Usually this includes changes to tariff rates and documentary requirements for the claim of preference under an FTA, the increase in investment thresholds before approval is required and, potentially, changes to our migration regime.

This process does permit extensive scrutiny and comment by interested parties and the public more widely. It also allows for extensive political engagement and pressure as that legislation needed to pass Parliament needs to pass both Houses of Parliament and where the government of the day may not control the Senate (our upper house of Parliament). This often requires some sort of political ‘deal’ to ensure the legislation is passed as was the case with our recent ChAFTA where controversy over the labour market provisions required passage of changes to our migration regime to ‘protect’ local skilled employment.

Now that the process has started and hearings have started at JSCOT, we are beginning to get a better view of the compromises which which may be required in Australia to secure public and political approval for the ratification of the TPP. I have already drafted submissions for the ECA and the FBIA and representatives of the service providers in the supply chain will be makingsubmissions. I look forward to that process including appearing in person before many Parliamentary committees of inquiry. There is no set time frame for this Australian process but I would anticipate about six months.

Of course, we then need to await the ratifications of the other TPP parties which may prove to be the more difficult task. The delay and uncertainty can also have the ‘knock on’ effect that those in the supply chain may not take the time to prepare for the TPP until late in the international process which would trigger commencement of the TPP. The busy Australian FTA agenda with a number of deals likely to be completed in the first half of 2016 may well turn attention (and preparation) away from the TPP.


From the perspective of the ECA, the FBIA and those in the supply chain (including my clients), the implementation of FTA often poses the most problems, especially at commencement. The recent commencement of the ChAFTA has created all manner of practical issues as information was not available on practical border issues until shortly before commencement and there has been evidence of differences of opinion on rules of origin andcertificates of origin. This has not been assisted by comments from the Australian border agencies that they expect a higher level of strict compliance with the ChAFTA and border legislation requirements than may be reasonable to expect, especially in the short term when compared to the actual provisions of the ChAFTA which suggest a more ‘forgiving’ approach to compliance with ChAFTA. Which is why I would reiterate, again, what Ihave included in submissions on other FTA that there be comprehensive engagement on TPP implementation as early as possible to allow for those in the supply chain to properly prepare for implementation matched with asympathetic approach to compliance which does not penalize or prosecute inadvertent breaches of border law.

In fact, I would strongly recommend a moratorium on penalties for inadvertent breach of the law for a six-month period as we had with the AUSFTA.We live in interesting times and I seriously hope that the potential FTA ‘fatigue’ and lack of resources to agencies in implementing the TPP do not detract from its significant benefits.

Time for a Tobacco Act, says MCTC

Council chief Cheah says Putrajaya must have the political will to control tobacco use.

PETALING JAYA: The Malaysian Council for Tobacco Control (MCTC) has alleged that the government lacks the political will to control tobacco use to ensure that young Malaysians don’t develop the smoking habit.

Speaking to FMT, MTMC President Molly Cheah said she hoped Putrajaya would use the time allocated under the Trans-Pacific Partnership Agreement (TPPA) to finally come up with a Tobacco Act.

Countries committed to signing the TPPA are given two years to amend existing laws or enact new ones before the agreement comes into effect.

“Malaysia is backward compared to other countries who are signing on to the TPPA,” she said. “It still doesn’t have a proper act in place to control the use of tobacco.”

Instead, she said, the government seemed content to control tobacco use through what she called an “archaic” provision of the Food Act 1983.

However, Cheah commended the Ministry of Health for planning to implement a rule requiring plain packaging of tobacco products, saying the measure had shown positive results in other countries.

“We are fully supporting the move and hope that the government will implement plain packaging as soon as possible as it’s shown to be a very effective means to control the use of tobacco.”

She dismissed the notion that the move would have repercussions on intellectual property rights, noting that Australia, one of the TPP partners, was already successful in implementing it.