Clear The Air News Tobacco Blog Rotating Header Image

February, 2016:

Tobacco Illicit Trade Protocol

Download (PDF, 363KB)

Tobacco Control in Hong Kong = build more hospitals

http://www.budget.gov.hk/2016/eng/budget35.html

Investing in Healthcare

129. Recurrent expenditure on medical and health in 2016-17 is $57 billion, accounting for 16.5 per cent of recurrent government expenditure. This represents an increase of more than 90 per cent when compared with a decade ago. To cope with an ageing population, Government has set aside a dedicated provision of $200 billion for a ten-year hospital development plan to enable the Hospital Authority (HA) to expand and upgrade healthcare facilities in a more flexible and long-term manner.

130. The development plan is a vast investment. It will provide 5 000 additional hospital beds, representing an increase of 18 per cent. Operating theatres will increase by 40 per cent to 320. Specialist outpatient service capacity will increase substantially by 40 per cent from 6.8 million to 10 million attendances a year. At the district level, community health centres will be set up in Mong Kok, Shek Kip Mei and North District. Additional services for 410 000 attendances will be provided at the general outpatient clinics each year.

131. The development plan will cover the redevelopment and expansion of a number of hospitals including Kwong Wah Hospital, United Christian Hospital, Queen Mary Hospital, Kwai Chung Hospital, Prince of Wales Hospital, Haven of Hope Hospital, Our Lady of Maryknoll Hospital, Operating Theatre Block of Tuen Mun Hospital, North District Hospital, Lai King Building of Princess Margaret Hospital and Grantham Hospital.

132. As for new hospital projects, an acute general hospital will be built in the Kai Tak Development Area. The two-phased project will be commissioned in ten years and will provide 2 400 beds and facilities such as an oncology centre and the first neuroscience centre in Hong Kong.

133. Government will allocate $10 billion to HA to set up an endowment fund to generate investment returns for enhancing public-private partnership programmes. Government will also provide a loan of $4 billion to the Chinese University of Hong Kong for developing a non-profit making private hospital.

Anti-Contraband and Anti-Counterfeit Agreement

Download (PDF, 2.22MB)

EU questions ‘continued relevance’ of tobacco deal

https://euobserver.com/economic/132442

A long-awaited report assessing an agreement between tobacco multinational Philip Morris International (PMI), the European Union and its member states says the deal “effectively met its objective”, but may not be fit for the future.

“The evidence suggests, even if no direct causality can be established, that the PMI Agreement has effectively met its objective of reducing the prevalence of PMI contraband on the illicit EU tobacco market, as shown by a drop of around 85% in the volume of genuine PMI cigarettes seized by Member States between 2006 and 2014,” the commission said in the report, published on Wednesday (24 February).

The agreement is due to expire in July, and the commission has promised to take the assessment into account in its decision over whether or not to attempt to renew it.

While the “technical assessment” published on Wednesday does not contain a decision in favour or against renewal, it questions “the continued relevance” of the deal.

The EU executive has assessed the costs and benefits of the tobacco agreement, which made the EU and PMI partners in the fight against cigarette smuggling and counterfeiting, and whose benefits have included payments from PMI to national budgets and the EU budget of around €1 billion, in total. The EU budget received 9.7 percent of this amount.

The report says that PMI used the agreement “on multiple occasions” to give national and EU anti-fraud authorities “information of direct investigative value”.

“This information has regularly led to seizures by Member States’ enforcement authorities, and in many cases to arrests and criminal indictments,” the report says, without quantifying what constitutes regularly.

“Transnational criminal organisations were dismantled and potential losses to Member States’ and the EU budget of several million euros were prevented,” the authors write. Elsewhere in the report, they say that cigarette smuggling is costing national and EU budgets more than €10 billion annually, in lost public revenue.

They also add “it can also be argued that PMI’s incentives in this type of assistance to enforcement might as well be independent from the existence of the PMI Agreement”.

Costs

There was little cost involved on the side of the EU, the report notes, but that is also because in the first ten years of the PMI-EU deal, the EU could have made better use of the investigative powers it was granted under the agreement.

“Low administrative costs were also partly due to the fact that the Commission has in the past underinvested in the full implementation of the PMI Agreement including the auditing of the compliance by PMI with the obligations under the Agreement, to which only limited resources were dedicated,” the report says.

“The Commission has in recent years brought improvements to the way how the PMI Agreement is managed in practice, even if resources remain stretched,” it adds.

In its assessment, the commission also says that while the deal may have worked well in the past, the world has changed since it was signed in 2004.

“The market and legislative framework has changed significantly since the entry into force of the Agreement,” it said. Many of the rules in the agreement are now EU law, and some parts of the deal contradict international obligations that are expected to come into force soon.

The report also acknowledges criticism that the deal allows too cozy a relationship between tobacco companies and the EU, but says this is “essentially a matter of political appreciation and falls outside the scope and mandate of this technical assessment”.

It does state dryly “that the tobacco industry has launched a legal challenge against the 2014 Tobacco Product Directive (TPD), which prompts some to question whether it is opportune for the EU to enter into a contract with an entity on policy issues related to the ones legally challenged”.

MEPs

The assessment has been long-awaited by several members of the European Parliament, who have been critical of the deal.

The EU commissioner Kristalina Georgieva responsible for the deal is due to appear in front of the plenary session of the European Parliament on Thursday (25 February).

Last December, EUobserver published a four-part series of articles about the EU’s agreement with tobacco company PMI

Part one: Will EU renew $1.25bn deal with tobacco firm PMI?

Part two: EU sleuths ignore special powers on tobacco smuggling

Part three: Scant evidence EU tobacco deal curbed smuggling

Part four: How did the EU spend its €110 million in tobacco money?

Report

  1. Technical assessment of the experience made with the Anti-Contraband and Anti-Counterfeit Agreement

Malaysia Gov’t plans to introduce plain packaging for tobacco

http://www.freemalaysiatoday.com/category/nation/2016/02/24/govt-plans-to-introduce-plain-packaging-for-tobacco/

PETALING JAYA: The Health Ministry plans to introduce generic packaging for tobacco products with the aim of reducing brand recognition and ultimately reducing overall consumption, Malay Mail Online reported today.

According to the report, the Health Ministry’s director for the disease control division Dr Chong Chee Keong, said plain packaging would greatly impact the prevalence of smoking among new and light smokers.

Chong said there were plans to introduce the plain packaging using standardised colours and fonts in stages but that no specific date had been set as yet.

When asked if the Trans-Pacific Partnership Agreement (TPPA) would affect the plan, Chong said the treaty had yet to be tested.

In 2012, Australia became the first nation to mandate plain packaging for cigarettes, in a bid to reduce smoking rates among its citizens.

Other nations that adopted the move later were France and Britain, much to the unhappiness of big tobacco firms including Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco International.

These firms have since launched legal challenges against such laws, arguing the move had impinged on their trademark intellectual property.

In Australia, four tobacco firms including Philip Morris lost their legal challenges against the law.

Parliamentary committee delivers 20 recommendations on e-cigarettes

http://www.adelaidenow.com.au/news/south-australia/parliamentary-committee-delivers-20-recommendations-on-ecigarettes/news-story/3801de5dc4984fcad271524f7a81116b?nk=0611f97db29bbf0213b82364550de3fc-1456352062

E-CIGARETTES should be banned in non-smoking areas and retailers should not be allowed to sell the vaporisers to children, a parliamentary committee recommends.

Vaporisers also should feature health warnings and should not be decorated with “child-like aspects such as diamantés and cartoon characters” which may encourage young people to take up the habit of “vaping”.

For the same reason, the committee also urges against selling “sweet and confectionery flavoured e-liquids” to be used in the vaporisers.

It is believed about 20,100 South Australians use e-cigarettes — or about 1.2 per cent of the population — and the devices are growing in popularity.

The battery-operated devices vaporise a refillable cartridge of nicotine solution to create a vapour that the user inhales, simulating the action of smoking.

Some use flavoured liquids without nicotine.

E-cigarettes have been sold in Australia for about four years but legislation governing their sale and use varies around the nation.

Concerned at the confusion around the relatively new products, and the potential long-term health risks, Labor MP Annabel Digance moved in May to establish a Select Committee into E-Cigarettes.

The final report of the committee, tabled in Parliament today, makes 20 recommendations including:

BANNING e-cigarettes in areas where tobacco smoking is banned.
PREVENTING the sale of e-cigarettes to people aged under 18.
REQUIRING health warnings on e-cigarette devices and full lists of ingredients on e-liquid packaging.
REQUIRING childproof packaging on e-liquid containers.
BANNING advertising of e-cigarettes or offering pricing specials or promotions.
CALLING for more research on the effects of e-cigarettes on users, including pregnant women and foetuses, infants and children and people with respiratory illness or chronic illness.

Health Minister Jack Snelling has pledged to consider the recommendations in any future regulation of e-cigarettes.

There is strong debate over whether vaporisers encourage the habit of smoking or help people to quit by simulating the action without delivering the chemicals.

“We just don’t know whether e-cigarettes are effective in helping people to quit smoking without causing potentially new damaging health effects,” Ms Digance said.

She added that it was “unclear whether e-cigarettes could act as a gateway into smoking and nicotine dependence for our young people”.

“The younger a person starts smoking the more difficult it can be to quit later on,” Ms Digance said.

“While studies are under way to explore the health effects of e-cigarettes, it will be some time, possibly decades, before we really understand how they affect a person’s health.

“The World Health Organisation is calling on governments to regulate e-cigarettes until the safety of the devices and their peripheral components, such as the vaporised solution contained within them, are established.”

Opposition committee member Vincent Tarzia raised concerns that some of the recommendations would diminish the potential harm minimisation benefits of e-cigarettes.

“The research is clear that e-cigarettes are far less dangerous than smoking tobacco and there is a public health benefit if people choose to use e-cigarettes instead of smoking tobacco,” Mr Tarzia said.

“As a consequence there is a public health benefit if tobacco smokers are switching to e-cigarettes and any new regulations should not hinder that movement.

“The report’s recommendation that e-cigarettes shouldn’t be sold alongside tobacco products has the potential to undercut this public health benefit.”

Mr Tarzia supported calls for more research on the long-term health impacts of using the vaporisers.

The committee received 142 submissions and took evidence from 11 people, including from tobacco companies, e-cigarette retailers and users, and tobacco smokers.

Growing number of female smokers is a worrying trend

http://www.chinadailyasia.com/opinion/2016-02/23/content_15389267.html

The anti-smoking battle in Hong Kong isn’t over yet.

John Tsang Chun-wah, the city’s financial secretary, will unveil the government’s Budget for the year ending March 31, 2017, today (Wednesday). He is strongly advised to raise tobacco tax again to discourage people, particularly women, from smoking.

The number of female smokers is small, but the growing trend is worrying. The number of female smokers rose to 3.2 percent in 2015 from 3.1 percent a year earlier. Just imagine the damage done to young people if they smoke at home with children playing in the same room.

The percentage of people who smoke in Hong Kong has fallen, according to government figures. It dropped to 10.5 percent in 2015 from 11.8 percent in 2009. The decline, however, did not look impressive. Joining hands, the government and the community can do a better job in reducing the population of smokers in the city.

The government’s Hospital Authority statistics show that 75,870 young people under the age of 18 were admitted to hospital between 2004 and 2012 (the latest numbers available) due to diseases caused by lower respiratory tract infections. They included serious complaints such as empyema, pleural effusions and abscesses in the lung. Of those admitted to hospital, 80 percent were pre-schoolers of five years old or younger. Many of the diseases were smoking-related.

The government should enact new laws to prohibit smoking in any common areas of any residential premises or buildings (e.g. common corridors, staircases); any covered or underground pedestrian walkways; any pedestrian overhead bridges; any bus interchanges (not just bus stops), including any area within a certain radius of bus shelters; and hospital outdoor compounds.

More importantly, the government should also ban smoking in public areas with a queue of three or more people. Hong Kong people love to queue. We queue for cinema tickets, we queue in front of a sushi shop or cha chaan teng (Cantonese-style restaurants) and we queue for application forms for our children to enter favored kindergartens. The second-hand smoke that people inhale, in case there is a smoker in the queue, can cause cancer or other serious — even fatal — diseases.

The government and NGOs in the city can expand publicity campaigns (NGOs can raise funds from wealthy tycoons in the city) to call on people to quit smoking and discourage others, particularly young people, from contracting this unhealthy habit. We should spread the message that smoking isn’t “cool.”

More than 60 percent of school-age children could avoid chest infections if there were more no-smoking areas in Hong Kong, University of Hong Kong (HKU) medical and public health academics advocated recently. They said youngsters under the age of 18 are susceptible to pollutants produced by smokers, so the risk of infection could be reduced if the government extended prohibition on smoking.

In a study, the HKU academics deduced that the effect of second-hand smoke on children aged 6 to 18 will be more apparent as they tend to spend more time outside the home and are therefore more exposed to pollutants. And of course, parents with minor children are strongly advised not to smoke at home.

Smoking in local universities is banned. Some university authorities have placed rubbish bins on the roads linking the campuses with neighboring residential districts. Scores of young students can always be seen smoking around these bins and extinguishing the cigarette butts on the dustbins. People often describe such scenes as dabinlo (eating around a hotpot). It is a good practice to keep the streets clean but, more importantly, university authorities are well-advised to dispatch volunteering teams (composed of teachers and students) to these gathering sites to talk to the smokers, trying to convince them to quit smoking and keep the campuses smoke-free. Students are society’s future leaders and they must set a good example.

This is a small step but it is a major step in the battle to rid campuses, and Hong Kong at large, of smokers.

The author is a veteran journalist and an adjunct professor at Shue Yan University.

EU tobacco control policy must separate foxes from chickens

https://euobserver.com/opinion/132402

Imagine you are a farmer and that your chickens are disappearing. Imagine that you are approached by a fox, who offers help including a hi-tech tracking system so that you can trace the chickens and find out who is stealing them. After all, he says, this is an issue that unites foxes and farmers.

Do you accept this, or do you reflect that foxes are known to have a taste for chicken? Is it wise to put a fox in charge of a hen house?

Last week, EUobserver carried a piece by Alvise Giustiniani, who heads Philip Morris International’s (PMI) anti-illicit trade department.

The article contained a number of extraordinary statements, for example the suggestion that the tobacco industry shares a “common agreement” on the Framework Convention on Tobacco Control’s (FCTC) Anti-Illicit Trade Protocol to eliminate illicit trade in tobacco products. The Protocol “contains many of the measures” that feature in a PMI agreement with the European Union (EU), and “shares our commitment to tackle this problem in every part of the world,” the company said.

Let’s pause for a moment and establish a couple of facts.

Fact 1: The tobacco industry is behind a concerted worldwide effort to prevent countries and organisations joining the Protocol.

Fact 2: PMI’s “commitment” is the result of legal action by the EU in 2004 which detailed the tobacco industry’s involvement in the illicit trade. As a consequence, PMI has since paid about $1.25 billion to the EU. This is not an act of charity, it’s a legal settlement.

Fact 3: Both the FCTC and its Protocol are crystal clear that the tobacco industry is part of the problem, not part of the solution. What we share is a battlefield – with the industry on one side and the Convention on the other. Article 8.12 of the Protocol states that “obligations assigned to a party shall not be performed by or delegated to the tobacco industry”. And Article 5.3 of the Convention states that “parties shall act to protect these policies from commercial and other vested interests of the tobacco industry”.

PMI’s black box

It’s easy to understand why the tobacco industry hopes to muddy the waters. Its 2004 agreement with the EU is ending and it’s desperate for a renewal. It seeks to argue that the PMI-EU agreement is in accordance with the EU’s treaty obligations as a party to the FCTC.

But the two really aren’t the same and – let’s be clear about this – the EU risks a breach of its treaty obligations if it renews.

Such a settlement also has detrimental international implications. It is well known that the tobacco industry uses it as an example and argument to promote other agreements around the world. Since the EU settlement, more than 100 parties to the Convention have engaged in voluntary agreements with the industry, seriously compromising the entering into force of the Protocol.

There is another important issue – the tracking-and-tracing systems required by the Protocol and by regulations including the EU’s Tobacco Products Directive.

The current PMI-EU anti-illicit trade agreement uses a system invented by PMI called Codentify, which is the tobacco industry’s supply chain control system. While PMI claims that Codentify can track and trace tobacco products, and in turn reduce illicit trade and counterfeiting, the technology is more accurately described as merely a code generator system, which offers no effective tracking and tracing services of contraband tobacco products.

There are other major problems with Codentify. It’s essentially a “black box” that is protected by a tobacco industry patent. We don’t know what’s inside, but we do know that it’s managed and controlled by the tobacco industry.

This industry solution does not meet the requirements of Article 8.12 of the Protocol and it should be rejected.

So too should a multitude of measures proposed by the tobacco industry. The 180 Parties that have ratified the FCTC did so in order to end tobacco usage and should be alert to the industry’s often-underhand behaviour.

Invitations from tobacco industry front organisations should be refused and so-called memorandums of understanding with the industry should be rejected. These are simply designed to ensure that countries do not become parties to the Protocol.

The tobacco industry likes to portray itself as a responsible party, on a par with governments or non-governmental organisations in tobacco-control policy. It suggests that we’re all in it together, but we’re not all in it together.

Farmers and foxes have different interests.

Dr Vera Luiza da Costa e Silva is Head of Secretariat at the World Health Organization’s Framework Convention on Tobacco Control

EU tobacco control policy must separate foxes from chickens

https://euobserver.com/opinion/132402

Imagine you are a farmer and that your chickens are disappearing. Imagine that you are approached by a fox, who offers help including a hi-tech tracking system so that you can trace the chickens and find out who is stealing them. After all, he says, this is an issue that unites foxes and farmers.

Do you accept this, or do you reflect that foxes are known to have a taste for chicken? Is it wise to put a fox in charge of a hen house?

Last week, EUobserver carried a piece by Alvise Giustiniani, who heads Philip Morris International’s (PMI) anti-illicit trade department.

The article contained a number of extraordinary statements, for example the suggestion that the tobacco industry shares a “common agreement” on the Framework Convention on Tobacco Control’s (FCTC) Anti-Illicit Trade Protocol to eliminate illicit trade in tobacco products. The Protocol “contains many of the measures” that feature in a PMI agreement with the European Union (EU), and “shares our commitment to tackle this problem in every part of the world,” the company said.

Let’s pause for a moment and establish a couple of facts.

Fact 1: The tobacco industry is behind a concerted worldwide effort to prevent countries and organisations joining the Protocol.

Fact 2: PMI’s “commitment” is the result of legal action by the EU in 2004 which detailed the tobacco industry’s involvement in the illicit trade. As a consequence, PMI has since paid about $1.25 billion to the EU. This is not an act of charity, it’s a legal settlement.

Fact 3: Both the FCTC and its Protocol are crystal clear that the tobacco industry is part of the problem, not part of the solution. What we share is a battlefield – with the industry on one side and the Convention on the other. Article 8.12 of the Protocol states that “obligations assigned to a party shall not be performed by or delegated to the tobacco industry”. And Article 5.3 of the Convention states that “parties shall act to protect these policies from commercial and other vested interests of the tobacco industry”.

PMI’s black box

It’s easy to understand why the tobacco industry hopes to muddy the waters. Its 2004 agreement with the EU is ending and it’s desperate for a renewal. It seeks to argue that the PMI-EU agreement is in accordance with the EU’s treaty obligations as a party to the FCTC.

But the two really aren’t the same and – let’s be clear about this – the EU risks a breach of its treaty obligations if it renews.

Such a settlement also has detrimental international implications. It is well known that the tobacco industry uses it as an example and argument to promote other agreements around the world. Since the EU settlement, more than 100 parties to the Convention have engaged in voluntary agreements with the industry, seriously compromising the entering into force of the Protocol.

There is another important issue – the tracking-and-tracing systems required by the Protocol and by regulations including the EU’s Tobacco Products Directive.

The current PMI-EU anti-illicit trade agreement uses a system invented by PMI called Codentify, which is the tobacco industry’s supply chain control system. While PMI claims that Codentify can track and trace tobacco products, and in turn reduce illicit trade and counterfeiting, the technology is more accurately described as merely a code generator system, which offers no effective tracking and tracing services of contraband tobacco products.

There are other major problems with Codentify. It’s essentially a “black box” that is protected by a tobacco industry patent. We don’t know what’s inside, but we do know that it’s managed and controlled by the tobacco industry.

This industry solution does not meet the requirements of Article 8.12 of the Protocol and it should be rejected.

So too should a multitude of measures proposed by the tobacco industry. The 180 Parties that have ratified the FCTC did so in order to end tobacco usage and should be alert to the industry’s often-underhand behaviour.

Invitations from tobacco industry front organisations should be refused and so-called memorandums of understanding with the industry should be rejected. These are simply designed to ensure that countries do not become parties to the Protocol.

The tobacco industry likes to portray itself as a responsible party, on a par with governments or non-governmental organisations in tobacco-control policy. It suggests that we’re all in it together, but we’re not all in it together.

Farmers and foxes have different interests.

Dr Vera Luiza da Costa e Silva is Head of Secretariat at the World Health Organization’s Framework Convention on Tobacco Control

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

https://euobserver.com/economic/132376

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 correctiv.org. This text is published in cooperation with correctiv.org