The TPP And The Tobacco Carve-out Bring Together Strange Bedfellows… While Highlighting The Problems Of The TPP

from the not-a-good-idea dept

It’s been rumored for years, but reports out of Atlanta suggest that it’s now confirmed that in order to finalize the Trans Pacific Partnership (TPP) agreement, everyone agreed to carve tobacco out of the corporate sovereignty system, better known as ISDS (investor state dispute settlement). These systems allow companies to sue countries for passing regulations that the companies feel harm their ability to profit — and tobacco companies have already filed ISDS complaints in a few countries that have pushed to put health warnings on cigarette packages.

While some health activists have cheered on this carve out — it appears that almost everyone else is pissed off. Not because they think that Big Tobacco should be shaking down countries that pass anti-smoking laws (though, there may be some of that), but because they recognize the problems that occur when governments can start to set up trade deals that “carve out” certain industries. It’s opening up a huge can of worms. Even some supporters of corporate sovereignty/ISDS are worried about what it means when one particular industry can just be excluded entirely from the process. Two of the biggest supporters of ISDS and TPP in Congress, Senators Mitch McConnell and Orrin Hatch, have both warned that the US should not carve out tobacco. Here’s McConnell a few months ago, standing up for those poor, poor tobacco farmers:

?It is essential as you work to finalize the TPP, you allow Kentucky tobacco to realize the same economic benefits and export potential other U.S. agricultural commodities will enjoy with a successful agreement.?

And here’s Hatch actually making a fairly salient point about the carve out:

?Although I don?t support tobacco at all, I still think it was essential,? Hatch said. ?It?ll cost us some votes. And every vote is essential. And there are other things I am very concerned about. I?ve committed to read the bill, and I will read it, but right now I?m leaning against it.?

That doesn’t bode well for the agreement, given that Hatch was a huge supporter of the TPP. Another Senator, Thom Tillis, has pointed out that carving out one industry opens up the possibility of carving out others:

?I?ll not only vote against it, I?ll work hard to have it defeated if it goes in the final agreement…. Once you carve out someone from dispute settlement agreements, then who?s next??

And the tobacco carve-out, believe it or not, seems to be one thing that both big business and big labor agree on, though for entirely different reasons. The US Chamber of Commerce and the National Association of Manufacturers are totally against it:

we ask all of the TPP governments to reject the exclusion of products from the coverage of the TPP and its enforcement mechanism…. Such exclusions are unnecessary and would be highly damaging to the international rules based trading system and the prospects for the TPP.

And here was the AFL-CIO opposing the entire ISDS mechanism, and noting that the tobacco carve-out just highlights the problems of ISDS. Whereas Senator Tillis worried about “who’s next” to get carved out, the AFL-CIO is pointing out that maybe there should be a lot more.

Any industry-specific carve-out will not address the serious structural problems inherent in the system itself. Issues of broad public interest should not be viewed through the narrow lens of trade and investment at all, let alone decided by unaccountable private panels. Systems of justice should be transparent and accessible on an equal basis. ISDS is anything but: Only foreign investors can use it and there are no requirements that affected communities be allowed to participate or even have their view considered. In many cases, there often are not even requirements that hearings or decisions be made available to the public at all! Even in the case of clear legal error, it is almost impossible to reverse a decision.

Indeed, as Sean Flynn pointed out just last week, carving out tobacco really just enforces how dangerous corporate sovereignty really is:

The new exception validates, rather than assuages, the concerns of those who have been criticizing ISDS systems for many years. Without express carve outs, ISDS provisions do threaten common health and safety regulations.

The carve out does nothing to halt the disturbing recent trend of companies using ISDS provisions in trade agreements to enforce international intellectual property norms through ISDS tribunals. This is, indeed, the claim at the heart of the tobacco cases now being litigated in ISDS systems. The claim is that tobacco regulations requiring plain packaging violate the trademark rights of tobacco companies protected by the World Trade Organization agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The pharmaceutical company Eli Lilly has also claimed that the denial of a new use patent on an old (off-patent) medicine violates rights granted by TRIPS and the North Atlantic Free Trade Agreement (NAFTA).

Meanwhile, US trade officials are, of course, trying to tap dance around the fact that basically everyone absolutely hates this. The USTR has tried to pretend this isn’t a big deal because tobacco is “unique.”

The U.S. Government seeks to include this language because tobacco is a unique product ? it is highly addictive, always harmful to human health, and the single most preventable cause of death in the world. Recognizing these facts about tobacco through the TPP will represent an important step forward for public health in the international trade community.

It’s true that tobacco can be a serious health concern, but shouldn’t we be raising questions about why this procedure is no good for tobacco companies, but just dandy for every other industry — including some that produce harmful products? Or those like pharmaceutical companies who are jacking up prices to keep necessary medicines out of the hands of the poor?

Oh, and then there are those who are in complete denial, who are insisting that there really isn’t a carve-out for tobacco, even though there almost certainly is (we can’t say for sure, of course, because the documents are secret):

?TPP will not discriminate against any agricultural commodity nor will it exclude tobacco. On the contrary, TPP will provide protections to ensure that governments can implement tobacco control measures, while guaranteeing that tobacco has the same legal status as any other product,? a U.S. official told CQ Roll Call last week.

In short, the whole tobacco carve-out situation is a microcosm of the problems with the TPP. You have a terrible idea (corporate sovereignty) mixed with a weak attempt to appease health activists (carve out tobacco), that basically fixes nothing and satisfies no one. And, now, the same Senators in Congress who demanded the fast track authority be granted, which ties their own arms behind their backs in terms of changing the agreement, are threatening to force this change, even though they’ve already given up the power to do so.

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Comments on “The TPP And The Tobacco Carve-out Bring Together Strange Bedfellows… While Highlighting The Problems Of The TPP”

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TruthHurts (profile) says:

I wonder if the corporations know this...

If the corporations pushing TPP for Corporate Sovereignty understand that if they get it, they no longer hold any copyrights or patents in the United States.

As sovereign entities, they can only own their embassies and the land the embassies sit on.

All patents and copyrights that they held prior to gaining sovereignty will immediately enter the public domain.

Can’t wait… 🙂

Glenn says:

Tobacco isn’t a significant health issue. Cigarettes are. The tobacco in cigarettes is loaded with toxic and addictive substances (to keep a cigarette burning after lit and to get the smoker to keep buying more and more cigarettes) that don’t exist in almost all cigar and pipe tobacco. The tobacco industry screwed itself.

Anonymous Coward says:

Australia + New Zealand

Some more research on the matter would have shown you that Australia and New Zealand are in the process of introducing plain packaging for tobacco, i:e no trade names or colours just large health warnings and gruesome photos of damaged lungs, teeth and limbs. Australia is already on it’s way to court with the matter and New Zealand is waiting to see what happens.

Anonymous Coward says:

Re: Australia + New Zealand

Australia has paid for the right to have plain packaging in court costs and litigation. There’s a number of countries that can’t afford to do that. Just like US courts, the one with the deepest pockets wins. What a lovely ideal to export.

JMT says:

Re: Australia + New Zealand

“Some more research on the matter would have shown you that Australia and New Zealand are in the process of introducing plain packaging for tobacco…”

Some research on the matter would have shown you this has been discussed several times on Techdirt.

Be careful with snark, it can bite you in the ass.

Anonymous Coward says:

This can not be allowed to pass. Very few people know about corporate sovereignty or that the ISDS system exists. I’ve tried to explain it briefly and the response is that it’s another conspiracy theory, i.e. too extreme to believe. News coverage isn’t touching the subject.

I didn’t read that companies would need to give up rights to patents.

Anonymous Coward says:

Non combustionable tobacco is much safer, 95% safer. There’s an element of common sensen since it’s combustion that harbors tar and cancer causing agents. Not nicotine itself. The wiki page is in flux since this is a controversial politicized topic with billions at stake for various industries. It’s also a topic that might not be necessary to discuss right now.

How the tpp tobacco exception will impact pending FDA regulations over ecigs is curious. I can’t figure it out.

US tobacco makers aren’t big in the industry but the FDA would like to turn the industry over to them. Didn’t RJR use Ukraine to sue Australia? The biggest names are Chinese but they are not signers. Would this impact the sale of liquid nicotine? Then we have India and China as the largest sources. None of the nicotine supplers are “tobacco companies”, they are labs.

“Foreign investor” is a strange requirement. Why were domestic investors excluded?

This idea of “global government” via trade and corporations stinks. Most of the tpp is not about trade but public policy and an end run around democracy.

Anonymous Coward says:

Oil and gas industries should be carved out of corporate sovereignty. That way these harmful industries can’t sue when kicked out of neighborhoods for poisoning drinking water due to fracking and causing rising sea levels from global warming.

I would say these industries are more harmful than tobacco. Oil and gas industries effect everyone in the world! Not just smokers.

Ninja (profile) says:

And, now, the same Senators in Congress who demanded the fast track authority be granted, which ties their own arms behind their backs in terms of changing the agreement, are threatening to force this change, even though they’ve already given up the power to do so.

sweet. I hope it moves forward in the face of the idiots that decided to give up their own power and passes with all the bad, effectively causing economic damage to the US as well. Maybe this will make the idiots in power think twice before building secret trade deals that benefit the biggest buyers.

AI says:

The feeling I get (along with some TPP articles from around the world) is that TPP isn’t actually finished. The trade officials and Obama might be celebrating, but like anything done at the last minute, there are always outstanding issues and problems left to be resolved. It’s only a matter of time before they surface.

I am sure some officials are expressing support just to keep Obama and USTR happy. You never know what they do once they return to their country.

Anon says:


The problem isn’t that tobacco is a harmful product, so should not be able to sue governments for restricting it. The problem is that the fact that it is necessary to exclude a product in obvious need of strong regulation – simply demonstrates that the other “carved-in” products will very likely enjoy excessive rights to challenge and override normal government restrictions; enough so that the tobacco carve-out was deemed necessary.

“If we promise no to let Big Tobacco grab you by the throat, will you allow any other big business to do so?”

It’ll be fun to see when the USA gets a taste of its own medicine. They have happily ignored international agreements and tribunals whenever it suited them. I wonder how that will play with TPP? (Look up Canadian Softwood Lumber dispute under NAFTA and IATT…)

Andrew D. Todd (user link) says:

How About Coal Mining?

The Investor-State Dispute Resolution Process would presumably apply to Don Blankenship, former CEO of the Massey Energy Company, whose conspiracy to violate mining safety laws led to the Big Branch Mine Disaster, on April 5, 2010, in which 29 miners were killed. Blankenship is on trial, and facing up to thirty years in prison. Stringent regulation has gotten fatal accidents in American coal mining down to about twenty or thirty a year. That, of course, does not include the long-term effects of silicosis, which results from inhaling small quantities of coal and rock dust for years on end. The Chinese coal mining industry is much more poorly regulated than the American coal mining indusry, and thousands of Chinese miners are killed every year. One suspects that by de-facto Chinese standards, Blankenship would be considered to have a right to kill 29 American miners. Doubtless, Blankenship will produce numerous Chinese expert witnesses to prove that this, that, and the other practice is perfectly acceptable in Chinese mines. It sounds as though the Trans Pacific Pact might be a “get out of jail free” card for Blankenship.

The official Chinese figures will be on the low side. There will be large numbers of accidents only involving one person which were covered up. That is the situation in general for Chinese industrial accidents and illnesses.

When these facts are appreciated, West Virginia’s congressional delegation would be well-advised to vote against the treaty if they want to be re-elected to office.

Andrew D. Todd (user link) says:

And How About Milk?

Does this mean that food regulations are forbidden? The Chinese Milk Scandal was a case in which 300,000 Chinese children were harmed, to some degree or other, by a few businessmen who added plastic resin to milk which was used to make various prepared foodstuffs. Some of the tainted milk reached the United States in the form of specialty candies, and the Food and Drug Administration did what it had to do, punishing all Chinese importers out of an abundance of caution. The Chinese shot the two most guilty culprits, and sent others to prison for long terms.

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