Global Trends by Martin Khor

Monday 10 February 2014

A strange but welcome thing happened on the TPPA front last week. 

The Attorneys-General of 42 States of the United States have come out in support of the proposal by Malaysia to fully “carve out” tobacco from the Trans-Pacific Partnership Agreement.


In a letter to the US Trade Representative, the Attorneys-General attacked the tobacco proposal put forward by the USTR, as it would not adequately protect state and local regulation from legal challenge by tobacco companies.

In particular, the US proposal would still allow tobacco companies to use the investor-state arbitration system to sue governments that seek to control tobacco marketing.

Thus the Attorneys-General support the Malaysian proposal, put forward in Brunei last August, that exempts tobacco control measures from all disciplines of the TPPA.

In fact when Malaysia put forward its proposal, it was warmly congratulated by health NGOs around the world.  It earned bouquets also from the New York Times and other newspapers.

But it is rare that top government lawyers in the US come out to support a foreign government (in this case Malaysia) against their own government in a trade negotiation, or in any other negotiations.

However, the USTR is likely to stick to its weak proposal instead of coming over to Malaysia’s side, as it is influenced by the powerful; tobacco lobby.

Health groups are concerned that the TPP provisions will prevent governments from regulating cigarette sales, for example by requiring that cigarette packages highlight the dangers of smoking, and that they minimise the use of the company’s logo and name.

Tobacco companies have been suing countries like Australia and Uruguay for their “plain packaging” laws.

Smoking is still the major killer.  The attorneys general mentioned that 440,000 Americans are killed every year by tobacco.  The companies are also shifting their marketing to developing countries where the majority of deaths will take place in future.

Thus this is a life and death issue in the TPPA.  It was thus morally courageous of Malaysia to demand the maximum exemption for tobacco control measures, something which the Health Ministry and important NGOs have fought for.

However it is not clear whether the Malaysian proposal, considered a “red line” at least by NGOs, and hopefully also by the Health Ministry and the Cabinet) will win the day with regard to all the other TPP countries.

The support by the US attorneys general was about the only positive news on the TPPA coming from the US.

The US President in his state of the union address put forward a less than strong case for renewal of the trade fast track authority, without which the country has little credibility that its proposals or acceptance of others’ proposals will be carried, because of probable opposition (as a whole or in part) by Congress.

Hardly a few days after his speech, the leading Democrat (the party’s majority leader) in the Senate Harry Reid voiced opposition to fast track, which was a major blow to President Obama.

There is almost no hope that a fast track bill will be passed, since a majority of Democrat Congress members and a sizable minority of Republicans (who want to oppose anything put forward by Obama) are known to oppose the bill.

Without this fast track authority, any trade deal agreed to by the Administration, can be altered by Congress.  Fast track mandates that Congress can only approve or reject a deal.

There is thus little confidence that negotiators of other TPP countries can have that what is agreed to by the USTR will be passed by Congress.     

Several Ministers have already proclaimed that it is hard for them to make concessions in the TPP negotiations, because what the USTR accepts may later be challenged by Congress.

The other TPP countries may thus be asked to make even more concessions.  Why then make the final concessions now?

The next Ministerial meeting of the TPP will be held in Singapore at the end of this month.

Before that, the chief negotiators will also meet in Singapore.  The US is trying to wrap up the talks as soon as possible, to avoid the pressures of the Congress mid-term elections in November over-influencing the talks.

But those elections are already casting a shadow.  The public in the US is known to be against more free trade agreements.  This public pressure is what caused Senator Reid to voice opposition to the fast track.

The TPP thus hangs in the balance, not least because of the US situation.