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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?

TTIP: EU offered 97% cut on US tariffs, secret papers show

The TTIP negotiations entered a decisive phase on 15 October 2015. That’s when US and EU negotiators laid their cards on the table, exchanging offers for tariff reductions. Up until then, the US had only broached hypothetical reductions; now they were openly offering to reduce 87.5 percent of all tariffs to zero.

That was more than the EU expected. European negotiators had to come up with a better offer or risk derailing the deal. A week later, they came up with a new deal: cutting 97 percent of tariffs to zero.

The EU’s secret offer, which website Correctiv has seen in its entirety, is made up of 181 pages of densely-printed text. It’s got almost 8,000 categories: every species of fish, every chemical has its own tariff category. Importing a parka? Its tariff will depend on whether it’s wool, or polyester for example.

Trade deals are like poker games. Europe’s big offer comes with a big hope: that the US will open up its public bidding process to European firms. That way, European construction companies like Hochtief could bid on contracts to build US highways, or BMW could sell cop cars to American sheriffs.

Meat is ‘underdog’

For the first time, the tariff offer makes clear what TTIP might do for consumers. Remove duties, and prices tend to drop. With tariffs on parts gone, cars could get cheaper. Per part, tariffs add just a few cents on the euro, but altogether European car manufacturers could save a billion euros each year, according to German Association of the Automotive Industry calculations. Manufacturers could then pass the savings on to consumers.

Some duties are levied on foodstuffs. Right now, peppers from the US have an import tariff of up to 14 percent. Fish caught on US coastlines are charged up to 25 percent; raspberries 9 percent. Take those away, and it could make economic sense for American food producers to export to the EU – putting domestic farmers under pressure.

Grain and meat, on the other hand, are largely left out of the reductions for now. “The meat industry is definitely an underdog,” says Pekka Pesonen, general secretary of the European Farmers Association (COPA-COGECA). Animal feed is produced much more cheaply in the US than in the EU. And for products like meat, “there are a lot of reasons it’s complicated to fully liberalise trade,” Pesonen says – animal welfare is more regulated in Europe, and using growth hormones is forbidden.

Opening the agricultural market completely would be difficult for Europe’s small family farms in particular, as they already struggle to compete against industrial-scale farms. That means the back-and-forth over grain and meat is likely to continue.

But the EU has to make a few offers here, too, because the US is eager to see the European agricultural market open up a bit. Pork or seed corn, for example, could be offered up for tariff cuts. The EU has yet to decide when the tariff cuts come into effect. The process is alarming for farmers, who aren’t eager to have their products used as negotiation tools.

Privileged industries

Both sides have placed conditions on their offers. There are 19 pages of tariffs on clothing, for everything from parkas to shoes, overalls and yarn. Tariffs hover between 9 and 12 percent, but the EU is offering total cuts, with an “R” for “reciprocity”. In other words, we’ll cut ours only if you cut yours. The US, on the other hand, has made clear that cuts on textiles depend on opening a discussion over country-of-origin labels.

For example, if a shirt is sewn in Vietnam but packaged in the US, is it “Made in Vietnam” or “Made in the USA”? Once that’s worked out, it’ll be possible to discuss whether the new duties apply to that shirt or not.

Take a look at the EU’s confidential offer and it’s clear some industries have been privileged. Next to the many zeroes on the list are phase-in periods of three or seven years. Some aluminium products, for example, won’t be allowed into the EU duty-free for seven years.

Hydraulic motors, too, have a grace period. Duties on LCD monitors won’t go down immediately; consumers will have to wait seven years for import duties to drop. That, in theory, will give these industries time to adjust to competition. But these measures are still being negotiated.

Thus far, access to the specifics of the TTIP deal was limited to a small circle: Negotiators, government officials, the US Congress, the EU Parliament and 600-odd “trade advisers” in the US.

Public procurement promise

The tariff offer is a milestone for TTIP. Without concrete tariff reductions, concluding a trade deal would be impossible. In theory, such arrangements have to be handled by the World Trade Organisation (WTO); bilateral deals are, technically, forbidden by the WTO. Other states could file to have the deal overturned.

But there’s an exception in the WTO rules: Article 24 of the General Agreement on Trade and Tariffs (GATT) states that a deal like TTIP is allowed when both sides drop their tariffs substantially and show that they’re making trade easier. Both the EU and the US have just done that.

The EU is now waiting for the US to offer a substantial deal on public procurement. In a 15 September report obtained by Correctiv, the EU Commission says “it definitely expects that the US will offer to open public procurement at a future point in time, in exchange for the revised tariff offer”.

That report also indicated that the US “promised to make a proposal regarding public procurement for the first time” when the EU and US put forth their symmetrical tariff reductions, eliminating 97 percent of all tariffs.

Public bids are a major TTIP sticking point. The EU wants the US to finally open its markets to allow firms like Hochtief or BMW to compete when cities put out a call for bids on a new building or fleet of cars. The US is less than eager, because that would subject domestic companies – which are already allowed to bid on projects in the EU – to increased competition.

The 12th round of negotiations started on Monday in Brussels. However, last Thursday the EU Commission indicated that it did not expect a comprehensive offer from the US, and other sources suggested the US would not propose anything concrete before the end of the week.

Justus von Daniels and Marta Orosz are reporters with the non-profit newsroom This text is published in cooperation with

Malaysia’s lower house of parliament passes contentious Trans-Pacific Partnership bill

The lower house of Malaysia’s parliament passed a bill allowing the country to participate in the Trans-Pacific Partnership on Wednesday, clearing a crucial hurdle for the government to sign the free trade pact next month.

In the chamber in which the ruling National Front coalition controls nearly two-thirds of the 222 seats, the bill was approved after two days of heated debate, with 127 legislators voting for versus 84 against.

International Trade and Industry Minister Mustapa Mohamad, who tabled the motion on Tuesday seeking approval from the lower house to allow the government to sign and ratify the deal, assured the legislators that Malaysian social agendas will not be compromised.

“The TPP will not change our economic model,” he said in a speech before voting began.

In reference to the mix of capitalism and socialism that Malaysia practices, he said: “We will continue to have the ‘bumiputera’ policy, social enterprises.”

“Bumiputera” or “prince of soil” refers mainly to the ethnic Malays, who make up some 60 per cent of the country’s 29 million population and who enjoy special privileges through the state’s affirmative-action policy due to the perception that they are still weak economically compared to the minority ethnic Chinese.

The “bumiputera” issue is particularly sensitive to Prime Minister Najib Abdul Razak, whose party, the United Malays National Organisation, depends heavily on the Malay voting bloc.

The opposition’s main arguments revolved around fear of the government losing sovereignty especially over the investor-state dispute settlement chapter and the “bumiputera” policy, which comes under the government procurement and state-owned enterprise chapters. They also spoke out over concern that the price of medicine will rise as a result of a longer patent-protection period under the intellectual property rights chapter.

But Mustapa said the TPP recognised the “bumiputera” policy and the country is given a longer transition period and higher thresholds in certain sectors in order to allow the Malays to play catch up.

Outside parliament, a dozen or so activists bearing placards with slogans such as “Malaysia Is Not For Sale” and “TPP Agenda Amerika” camped out overnight in a show of protest against the TPP.

Nashita Md Noor, a 50-year-old social activist, believed Malaysia is not ready for the TPP.

“It is the big companies that will benefit, not the people. Also, the TPP will open the door for big multinational companies to come in and our local small businesses will lose out,” she said.

Although aware she is fighting a futile battle to thwart the deal, Nashita said, “It’s symbolic that there are people brave enough to fight the current government who are not doing anything good.”

According to a World Bank report released earlier this month, Malaysia, Vietnam and Japan will reap significant double-digit bumps in their exports by joining the TPP.

The TPP will open the door for big multinational companies to come in and our local small businesses will lose out

Social activist

It said the TPP will boost Malaysia’s exports by 20 per cent in 2030 while its gross domestic product will rise by 8 per cent. This is in sharp contrast to the United States, the largest economy in the 12-member bloc, which it said will see a gain of only 0.4 per cent in its GDP.

The TPP negotiations were concluded last October after five years of intense wrangling.

Besides Malaysia and the United States, others in the pact are Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore and Vietnam, which together account for about one-third of global economic output.

With the passage of the deal in the lower house, it will be brought for deliberation and voting in the Senate on Thursday, where it is expected to be easily passed since the National Front also dominates the upper chamber.

The 12 member countries are scheduled to sign the trade pact on February 4 in Auckland, New Zealand. After which, the government has two year to ratify the pact.

Mustapa has said Malaysia still needs to amend 17 laws involving customs, intellectual property rights, labour, among others, to ensure “best practices” under the TPP.

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Australia tobacco clash reverberates in EU trade talks

Tribunal decision could undermine opposition to TTIP.

The end of a complex court case on the other side of the world could wreak havoc on a campaign in Europe against a proposed trade deal between the EU and the United States.

An international arbitration tribunal in December 2015 wound up a four-year dispute between the Australian government and tobacco company Philip Morris by announcing it was unable to rule on the matter — effectively siding with Australia’s position in the dispute.

The case has resonated in Europe, where for some time opponents of the proposed Transatlantic Trade and Investment Partnership (TTIP) have used the legal challenge as a cautionary tale against signing investment deals.

Philip Morris used an obscure investment agreement which Australia signed with Hong Kong in 1993 in an attempt to scuttle Australia’s “plain packaging” tobacco legislation, which has removed all branding from cigarette packets sold in the country.

But Australia’s ability to fend off the legal challenge could undermine the argument that legal provisions contained in international investment agreements leave legitimate legislative reform vulnerable to big corporations.

“It will be back to the drawing board for anti-TTIP campaigners,” said Hosuk Lee-Makiyama, director of the European Center for International Political Economy, adding that the parallels between Australia’s deal with Hong Kong and TTIP had always been overstated.

“Philip Morris was only able to sue Australia because of a technicality,” Lee-Makiyama said. “In free-trade agreements you always include an exception for public health, which Australia forgot to do. This entire case was the result of a drafting error by Australian negotiators.”

However, anti-tobacco campaigners in Brussels say the decision by the Permanent Court of Arbitration in Singapore does nothing for TTIP’s credibility.

“The arbitration court declined to hear the case on the grounds that it was not competent, as Philip Morris had shifted its commercial identity during the course of the case,” said Catherine Hartmann, vice president of the European Public Health Alliance.

“There is nothing in the outcomes of the arbitration attempt that validates or questions plain packaging in Australia or anywhere else,” Hartmann said.

Tobacco wars

The clash between Philip Morris and the Australian federal government began in 2011, when health authorities in Canberra drafted legislation to remove all branding from tobacco packets. The laws, designed to discourage people from taking up smoking, were implemented at the end of 2012.

The legislation was a world first and Philip Morris Asia Limited, a Hong Kong-based subsidiary of the tobacco company, launched a legal challenge. The company argued that the laws “forced removal of trademarks and other valuable intellectual property.”

The legal action was possible because the agreement between Australia and Hong Kong contained an “investor-state dispute settlement” provision (ISDS), an arbitration mechanism which enables investors to take legal action if they feel their interests have been harmed by government policy.

In 2012 the High Court of Australia, the country’s supreme court, found against Philip Morris, arguing the plain packaging legislation was not in violation of the constitution. The tobacco company then took its concerns to the international arbitrator, which effectively ruled against Philip Morris.

Yet Nina Renshaw, the secretary general of the European Public Health Alliance, is adamant the risks of industry using ISDS to challenge health reforms remain.

“The inclusion of an ISDS … in an EU agreement could raise the likelihood of such cases being brought against all kinds of public interest and health protecting policies in the future,” Renshaw said.

In an unusual alliance, Philip Morris agreed with anti-tobacco campaigners. Company vice president Marc Firestone argued that the Australian government’s win was “entirely procedural” with no bearing on either the merits of plain packaging legislation or the ISDS itself.

However, Lee-Makiyama said opposition in Europe to both ISDS and TTIP is based not on fact but misconceptions about American corporate culture.

“This is coming from business interests that are concerned with American market share and from outdated ideas of multinational corporations which may have been OK in the 1920s but are meaningless today,” Lee-Makiyama said.

“Opposition to the ISDS in Europe is also coming from national governments like Germany, which do not want a legal mechanism to stop them discriminating against foreign investors,” he said.

Packaging problems

The controversy has fed into a broader lobbying clash between the tobacco industry and anti-smoking campaigners in Europe, where plain packaging legislation is being hotly contested.

The EU’s revised Tobacco Products Directive, which entered into force in 2014, steered clear of plain packaging reforms after the European Commission came under pressure from the tobacco industry. However, the directive allowed EU member countries to adopt national plain packaging laws.

A number of EU governments have now done so. In December 2015, France passed tobacco legislation and will start to introduce plain packaging in May 2016.

However, the tobacco industry is maintaining its opposition to such laws. Australia’s legislation is also being challenged by a number of tobacco-producing countries at the World Trade Organization.

Meanwhile, on the other side of the Atlantic the EU’s soul-searching over the implications of an ISDS is being observed with interest by those opposing the inclusion of an arbitration mechanism in TTIP on the grounds that it is unnecessary.

“A company entering into a contract with a foreign government can accomplish the same objectives as an ISDS simply by insisting on including an arbitration clause,” said Dan Pearson from the Washington-based Cato Institute, a libertarian think-tank.

“Business associations in the U.S. would support TTIP without an ISDS because the reality is that they don’t need it,” Pearson said. “It mystifies me that the Obama administration has placed so much emphasis on an ISDS.”

This article was corrected to clarify details of the 2012 Australian High Court finding.

How can Philip Morris sue Uruguay over its tobacco laws?

The investor-state dispute settlement puts companies’ rights ahead of human rights. Its effects are devastating for developing nations – we must abolish it

Protesters attend a rally against the proposed Transatlantic Trade and Investment Partnership (TTIP) in Berlin, October 2015. Photograph: Gregor Fischer/AFP/Getty Images

Protesters attend a rally against the proposed Transatlantic Trade and Investment Partnership (TTIP) in Berlin, October 2015. Photograph: Gregor Fischer/AFP/Getty Images

When the architects of the international order that took shape after the second world war created the United Nations, they gave the organisation a lofty goal: “Save succeeding generations from the scourge of war.” Through the UN charter – akin to a world constitution – solemnly adopted in 1945 in San Francisco, they also said they were “determined to establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained”.

Since then and in line with that vow, the UN has put on the world stage not only the Universal Declaration of Human Rights, but also legally binding instruments, including 10 core human rights conventions and countless declarations and resolutions.

But now more than ever, one single mechanism – the little-known investor-state dispute settlement (ISDS) – threatens the existing system of justice, the concept of checks and balances, the very core of the rule of law. Its implications for the respect of human rights around the world are devastating. If it is allowed to continue to exist, it will hijack the dreams of a just international order born out of the second world war. It must be abolished because it undermines fundamental principles of the UN, state sovereignty, democracy and the rule of law. Far from contributing to human rights and development, the international investment regime and ISDS have resulted in growing inequality among states and within them.

Article 103 of the UN charter is clear: in case of conflict between the charter and any other agreements, including ISDS, it is the UN charter that prevails.

The ISDS mechanism is a unique privatised system of arbitration, often buried in bilateral investment treaties and multilateral trade agreements (such as Nafta and TTIP). It grants an investor the right to use private dispute settlement proceedings against a foreign government, yet governments cannot sue the investors. The system is neither transparent nor accountable and often results in aberrant judgments without the possibility of appeal. Over the years, it has led to inconsistent, unpredictable and arbitrary awards contrary to national and international public order.

In 1993, a waste management business, Metalclad, sued Mexico for indirect expropriation after Mexico had adopted an ecological decree declaring the area where the company was doing business and seeking to develop a landfill to be a natural reserve. The ISDS tribunal found that the government had taken a measure tantamount to expropriation and ordered Mexico to pay $16.7m (£11m) in compensation – later reduced to $15.6m. One commentator suggested that such broad interpretations of expropriation provisions could reverse the established tenet of environmental policy that the polluters should bear the cost of their pollution rather than be paid not to pollute.

More recently, Philip Morris sued Uruguay after it adopted a number of anti-tobacco regulations with a view to implementing the 2003 World Health Organisation’s framework convention on tobacco control, aimed at tackling the health dangers posed by tobacco. A decision from the International Centre for Settlement of Investment Disputes is expected later in 2015, but the figures are telling: Philip Morris is claiming $25m in compensation from Uruguay. This is not only absurd: it gives me moral vertigo.

The last 25 years have delivered numerous examples of abuse of rights by investors and unconscionable ISDS arbitral awards, which have not only led to violations of human rights, but have had a chilling effect, deterring states from adopting necessary regulations on waste disposal or tobacco control.

There is no justification for the existence of a privatised system of dispute settlement that is neither transparent nor accountable. Investors can have their day in court before national jurisdictions, often with multiple opportunities for appeal. Investors can also rely on diplomatic protection and ISDS procedures.

The ISDS cannot be reformed. It must be abolished

The ISDS cannot be reformed. It must be abolished. A peaceful, just, stable and sustainable international order cannot be ensured by the private sector, whose driving force is short-term profit.

No one should underestimate the adverse human rights impacts of free trade and investment agreements on human rights, development and democratic governance. Respect for human rights must prevail over commercial laws.

It is time for the UN general assembly to convene a world conference to put human rights at the centre of the international investment regime. In this context, a binding treaty on business and human rights is long overdue.

Big Tobacco Eyes Easing Restrictions Via TTIP

Written by Joe Wolverton, II, J.D.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Again, Jasper’s analysis is noteworthy:

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

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

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

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

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

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

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

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


EU-Tobacco industry redaction revelations must not go unchallenged, warns health NGO

Written by Florence Berteletti on 1 September 2015 in Opinion

The row over the European Commission’s release of heavily redacted documents documenting its relationship with the tobacco industry is just ‘another dirty drop in an already murky pool’, argues Florence Berteletti.

The adoption of the EU’s revised Tobacco Products Directive should be considered a victory for public health.

However, it also marked the end of five years of controversial lobbying practices by the tobacco industry, which included a multitude of well-documented unsavoury events.

One would have hoped that in the aftermath of these events, the European Commission would have learnt some lessons and would now be dealing with the tobacco industry in a different manner.

But no, even when confronted with the worst lobbying practices, the Commission remains resolute in continuing to deal with the tobacco industry as if it were any other, despite Article 5.3 of the WHO Framework Convention on Tobacco Control (FCTC) which states that “… Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry …”

The EU and its member states have all ratified the framework convention which entered into force almost ten years ago. Being party to the convention, the EU has an obligation to protect its policy setting and law making from the tobacco industry’s commercial and other vested interests.

Instead, when the Commission’s Secretary General, Catherine Day, was asked to release documents related to a series of meetings between her team and the tobacco industry during negotiations over the proposed Transatlantic Trade and Investment Partnership (TTIP), she stated: “Whilst I fully recognise the importance of transparency in enabling citizens to follow trade negotiations, I take the view that this public interest does neither outweigh the public interest in protecting the Commission’s international relations and decision-making process, nor the commercial interests of the companies in question in this case.”

Let us not forget that through the framework convention, the world’s governments and the EU have, with the backing of the WHO, agreed that the tobacco industry should be judged separately from other industries. One-size-fits-all no longer works; the tobacco industry is different!

The fiasco related to the cover-up of the documents between Commission officials and the tobacco industry during the negotiations over the proposed TTIP treaty is another dirty drop in an already murky pool.

The lack of transparency illustrated by the heavily redacted documents provided to Corporate Europe Observatory is shocking.

How long will we, citizens and MEPs, continue to be duped in this way? Even if I am aware that the EU is the biggest trading bloc in the world and that the commission is interested in keeping it that way during the TTIP negotiations, it should not be done at any cost.

Over the years, Europe has been at the forefront of efforts to end the tobacco pandemic. We have made important strides to establish good policy and law which has helped reduce the burden tobacco places on our societies. In this, we should not be let down by today’s commission.

The EU bears a special responsibility with regards to tobacco control. Why? Because the tobacco pandemic was created by us and much of ‘Big Tobacco’ is still headquartered in Europe.

We need to recognise that we need to do better. I hope that the Europe will not let the current state of affairs go unchallenged and will continue to demand full transparency of meetings between the tobacco industry and the commission. This is the least we can do.

About the author
Florence Berteletti is director of Smoke free partnership, the Brussels-based tobacco control and policy research group

The promised ‘transparency’ around TTIP has been a sham

Sven Giegold

The most important documents about the TTIP talks are unavailable to us MEPs as well as the public – and it suits big business to keep it that way.

Are you concerned about the implication of the Transatlantic Trade and Investment Partnership (TTIP)? Don’t worry! Only this month, the EU trade commissioner Cecilia Malmström promised another offensive on TTIP transparency: even more documents from the negotiations would be made available.

Her promise was put to the test only a few days later: the corporate transparency nerds of Corporate Europe Observatory finally received documents on exchanges between the tobacco lobby and the Brussels institution concerning TTIP and the EU-Japan trade talks. The punchline of the story? Most of the documents were redacted. An exercise in black humour, in the most literal sense possible. A picture of the blackened documents received thousands of shares and likes on social media since.

This rather amusing episode demonstrates the secrecy that still pervades the trade deals. Certainly, the EU commission has responded to the wave of criticism by civil society organisations against TTIP. A long list of documents, which they had previously kept secret, was published on its website. But the most important TTIP documents are still unavailable. No one knows what the US government is really asking from Europe. This is why many positive as well as negative claims cannot be substantiated, and exaggerations from supporters and adversaries of TTIP dominate the debate. Wikileaks’s offer of a €100,000 reward for the first person to leak the most secret documents is therefore highly welcome.

We shouldn’t make the mistake of focusing too much on TTIP alone, though: not even the EU’s negotiation mandates for most ongoing bilateral trade negotiations are public.

Wikileaks’s offer of a €100,000 reward for the first person to leak the most secret documents is welcome.

Unfortunately, most politicians in the European parliament are as much in the dark as ordinary citizens. We MEPs may get access to a few more documents in the parliament’s reading room than those searching the EU commission’s website. Nevertheless, the most important ones containing the demands of the US government are kept secret, even from MEPs. Even worse, although there are thousands of pages of documents, readers are not allowed to take any notes. Non-native English-speaking MEPs are further deterred by highly technical trade-law jargon. And while we could employ staff who are better trained to read the documents, they are not allowed to access the reading rooms. Therefore, the right of access to documents for MEPs is largely a sham. A real understanding of what is going on is only achieved through the actual publication of documents.

Green MEPs have consistently demanded that full transparency of trade negotiation should be made a precondition for their progress. I simply do not understand that – in particular – conservative, liberal and socialist colleagues applaud the continuation of negotiations that they cannot effectively control.

In order to regain credibility and public trust, the European Commission should end secrecy in trade negotiations and publish all important documents and in particular all negotiation mandates.

As tempting as it may be to assume that this lack of transparency is solely an EU phenomenon, it is not. International deals have always been negotiated in darkness. This is why not even Europhobic governments such as the Conservatives in the UK have complained credibly about the lack of TTIP transparency. Otherwise it would become too evident that their own international negotiations are hidden behind the same veil of opacity. The European parliament continues to be the only important political space where representatives from different countries negotiate international law under the eyes of the public. This is a historic achievement in building international democracy, of which Europe can be truly proud.

Beyond the lack of transparency, the real trouble with TTIP and the EU’s multitude of bilateral trade deals is not in the method, but in substance. Europe should put its weight behind a multilateral trading system based on open markets, fairness, sustainability and democracy. An equitable reform of the World Trade Organisation rules is clearly better for business and ethics than lots of bilateral trade and investment treaties. It is a myth that the WTO will never progress. The WTO trade talks could succeed if EU member states were ready to end unfair privileges, such as unsustainable agricultural subsidies and an obsession with intellectual property rights even in the poorest countries.

TTIP, CETA and other bilaterals are much more than traditional trade agreements. They are deals aimed at harmonising or mutually recognising regulations and standards for goods and services. This touches the very heart of our democracies in Europe. Certainly international harmonisation of technical standards can enhance efficiency and cut red tape. A TTIP limited to technical standards and their application only could be positive.

But when it comes to values-based choices, democracies must be free to change the level of regulation. Unfortunately, TTIP and co are about the most valuable standards in our societies, such healthy food, stable financial markets or chemical safety. European democracy should be able to increase environmental, social and consumer rights without having to find agreement with trading partners or to put its own businesses into a competitive disadvantage.

Europe must remain free to develop the common market into a space of high standards for consumers, workers and the environment. Blocking this is likely to be the real motive behind the big business lobby’s obsession with TTIP and co. Europe is big enough to sustain a high level of social, consumer, health and consumer rights even in a globalising world. No transnational company wants to stop selling to the European common market. Therefore, Europeans hold in their hand a powerful tool for greening global business. This democratic tool we must not give up for the small potential benefits of bilateral trade deals negotiated behind a veil of secrecy.