Tobacco excluded from trade dispute system

| October 6, 2015

The tobacco industry has been excluded from participation in the Trans-Pacific Partnership’s (TPP) dispute system that allows foreign corporations to challenge governments’ health policies, according to a story in The New York Times relayed by the TMA.

After eight years of negotiations, including five days of just-concluded talks in the US, 12 Pacific Rim nations yesterday agreed to be part of the TPP.

The TPP includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam; and it is set to affect 40 percent of the world’s economy.

The Times said that its implementation would mean the phasing-out of thousands of import tariffs and other trade barriers, the establishment of uniform rules on corporations’ intellectual property, a new code of conduct governing lawyers selected for Investor-State Dispute Settlement (ISDS) panels, and the tobacco “carve-out” from the investment dispute system that allows foreign corporations to challenge governments’ health policy decisions.

ISDS provisions of the TPP previously proved to be some of the most controversial of the agreement and it is unlikely that the concessions outlined by the Times will assuage some of those opposed.

The TPP has been negotiated in secret between corporations and trade representatives of the countries concerned, but, as far as is known, ISDS provisions would allow a company that invested in a country to sue that country if regulations were enacted that harmed its business, even in the event that those regulations were designed to improve the health of the nation. Such actions are possible now, but, in the main, they have to be conducted before a court of law in the country concerned.

Under ISDS, such actions would be brought before tribunals operating in secret outside of the country’s judicial system. None of the tribunal’s deliberations would be made public despite the fact that taxpayers would have to foot the bill for the defense and, if the company were to prevail, whatever judgement were made against the country. Many believe such provisions are anti-democratic.

The Times said that even though President Obama had ‘fast track’ trade promotion authority ensuring that trade pacts get expedited consideration in Congress with a yes-or-no vote without amendments or filibusters, the TPP could face months of debate.

TPP, the largest regional trade deal in history, could set a precedent for global commerce and worker standards, and could be the capstone for Obama’s foreign policy.

The president has argued that the TPP would build a “bulwark” against China’s economic influence and allow the US to set standards for Pacific commerce.

Though the full 30-chapter text is unlikely to be available for a month, labor unions, environmentalists and liberal activists are expected to argue that TPP favors big business over workers and the environment.

Category: Breaking News

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