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Health groups welcome tobacco exclusion from trade agreement

| October 6, 2015

The United States, Japan and 10 other Pacific Rim nations on Oct. 5 reached a final agreement on the Trans-Pacific Partnership (TPP) after eight years of negotiations, and a provision that excludes the tobacco industry from participation in the TTP’s dispute system has been welcomed by advocates of public health.

The TPP—which is the largest regional trade accord in history—includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam, bringing together countries representing two-fifths of the world’s economy.

Included in the TPP is a provision that protects the right of participating nations to adopt public health measures that aim to reduce tobacco use. The provision also prevents tobacco companies from using the TPP to launch legal attacks on such measures, according to the Campaign for Tobacco-Free Kids.

This tobacco “carve-out” from the TPP’s investment dispute system—which would bar tobacco companies from challenging governments’ health policies and threatening lawsuits for the passage of anti-tobacco regulations—has received pushback for its potential to hurt the American tobacco industry but represents a victory for public health advocates.

The provision is viewed by health groups as a critical step toward ending the tobacco industry’s efforts to challenge tobacco control measures—Philip Morris International and British American Tobacco sued the British government in May for the introduction of plain-packaging laws—and it sets an important precedent for future trade agreements.

Tobacco companies have been permitted to challenge governments in the past thanks to investor-state dispute settlement provisions that allow them to sue countries for implementing legislation or regulation that could hurt their profits; however, the tobacco carve-out under the TPP would permit signatory countries to exclude tobacco products from industry protection provided under trade agreements.

The conclusion of the TPP negotiations marks an important first step to developing a set of common rules that govern trans-Pacific commerce, but President Barack Obama now faces the challenge of securing approval of the deal from the U.S. Congress.

“U.S. retreats from tobacco regulations in trade deal”

| August 16, 2013

FairWarning reports that the Obama administration appears to have retreated from efforts to include, in the Trans-Pacific Partnership agreement, language enabling countries to uniquely attack the tobacco industry and adopt tough anti-tobacco regulations.

The online publication, which provides public-interest journalism on issues of health, safety and corporate conduct, says the Office of the U.S. Trade Representative put the protective language on hold last year following protests from the U.S. Chamber of Commerce and other business groups. Eight negotiating rounds passed since then without U.S. officials enabling the targeting of the industry through such language.

Cigarette makers in recent years have invoked trade agreements to challenge anti-smoking rules like large graphic warning and plain packaging requirements. The National Association of Manufacturers, the American Farm Bureau Federation and a group of former U.S. trade representatives, including three employed by law firms with tobacco industry clients, also spoke up against language protecting countries’ authority to adopt anti-smoking regulations.

Health advocates have said trade rules should not “inhibit any nation from exercising its sovereign authority to protect the health of its citizens,” and tobacco products “should not be treated as other consumer goods” in international trade.


‘Exclude tobacco from trade pact’

| August 14, 2013

The Malaysian Medical Association (MMA) has urged for tobacco to be excluded from the Trans-Pacific Partnership Agreement (TPPA), according to a report in The Star.

According to MMA President Datuk N.K.S. Tharmaseelan, the overall objective of the TPPA was to increase and facilitate free trade of goods and services, but it should not apply to tobacco.

“Tobacco is the only product that kills half its users prematurely, causes numerous diseases and reduces productivity.

“There is simply no justification for tobacco to enjoy the privileges of free trade,” he said in a statement.

The TPPA is a U.S.-sponsored trade agreement that is being negotiated by 12 countries—Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Japan, Singapore, Vietnam and the United States.

Trade boost

| March 1, 2011

Members of the Association of Southeast Asian Nations are selling and buying more cigarettes among themselves.


By John Parker


The 10 countries of the Association of Southeast Asian Nations (Asean) have a combined population of about 600 million. Cigarette imports reported by these countries increased to a combined total of more than 111 billion pieces in 2009. A major part of that trade flow was the shipment of nearly 30 billion pieces from Indonesia to Cambodia. This clearly portrayedCambodiaas the leading cigarette importer in the area andIndonesiaas the top exporter.


During the 1980s the United States and the United Kingdom were significant suppliers of cigarettes to Singapore, but in 2010 they were only token suppliers. The large exporter from this region wasSingaporein the past, andSingaporehas increased shipments recently. Exports from Singapore were still large at about 26 billion pieces in 2009. Philippine exports advanced recently with the help of Asean duty-free trade. Vietnam became a larger cigarette exporter in the past decade and began to increase exports recently to other Asean members.


Asean members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.


Indonesia benefits from Asean trade policies


The economy of scale for cigarette factories in Indonesia is greater than that found in some countries with a smaller market and less well-established manufacturing.Indonesiahas found expanding markets in other Asean markets. The dramatic gains for Indonesian exports to Cambodia from 21.5 billion pieces in 2007 to 29.4 billion pieces in 2009 portrays the most conspicuous result of Asean free trade for cigarettes. Exports to borderingMalaysiaaveraged about 9 billion pieces annually. Deliveries to Philippines were 532 million in 2008, before declining slightly afterward.Indonesia’s shipments toVietnamincreased to a peak of 651 million pieces in 2008, before declining a third in 2009.


Increased competition in some Asean markets other than Cambodia apparently caused Indonesian cigarette exporters to explore more prospects for sales in farther away destinations.Turkeywas the leading market for Indonesian cigarette exports outside Asean in recent years, and shipments toTurkeywere 1.7 billion pieces in 2009.The four busy duty-free ports ofTurkeyhave busy transit traders with arrangements for sales of consumer goods to customers inIraq, including cigarettes. Indonesia’s cigarette exports to Saudi Arabia advanced to 216 million pieces in 2009. Shipments toLebanonmoved up to 271 million pieces in 2009.Russiawas the destination for 216 million cigarettes in 2009.


Indonesian factories producing white blended cigarettes by multinationals provide some of the popular brands available for export from many countries. Most of the output of tobacco products in Indonesia consists of kreteks and smaller-type cigarettes offered to customers at relatively low prices.


Exports are an important part of the business for multinationals operating inIndonesia. The search for markets beyond Asean has been enhanced by the economy of scale assisted by large exports to customers inSoutheast Asia.


Exporters in a number of countries seek to make cigarette exports toIndonesia, despite the problems they encounter in their endeavor. Some exporters find a chance to make sales to traders in the duty-free area of Battam Island, just south of Singapore. The demand for certain brands from other countries inIndonesiacontributed to significant sales recently by exporters in some countries.Singaporeexported 739 million cigarettes toIndonesiain 2008 and 593 million pieces in 2009. The location of islands just south ofSingaporewith specialty importers may have contributed to some of this trade. Total cigarette imports intoIndonesiaare apparently about 2 billion pieces annually.


China is the leading supplier of Indonesia’s leaf tobacco imports of more than 70,000 tons annually. MoreU.S.tobacco was imported in recent years for preparing the blend of certain quality brands. China exported 432 million cigarettes to Indonesia in 2009.


Singapore increases exports to Asean countries


Cigarette exports from Singapore drifted downward from 30.7 billion in 1999 to a low of 14 billion in 2003 but began to move back up in 2006 with greater shipments to Asean partners. By 2009, exports fromSingaporewere up to 26.6 billion pieces. The leading destination wasVietnamwith shipments of 6.3 billion pieces in 2009. Malaysia was the second-leading customer with the delivery of 5.35 billion pieces in 2009.


Exports toPhilippineswere up to 1.8 billion pieces in 2009.Thailandwas a customer for 1 billion pieces in 2009.


Business connections helped keep Singapore’s cigarette exports to Hong Kong at 4.36 billion pieces in 2009, when U.S. and U.K. shipments to this market for premium brands had a marked change in market share for suppliers of imported cigarettes.Taiwanwas a market for 2.8 billion pieces forSingaporeexporters.


Exports fromSingaporetoUnited Statesmoved up to 105 million pieces in 2009. Some traders in the Netherlands import cigarettes for distribution within the EU in addition to sales in the local market. Singapore exported 248 million cigarettes to the Netherlands in 2009.


Thailand’s imports remain steady


Thailandimported about 12 billion cigarettes annually during the last three years. The surprising fact aboutThailand’s cigarette imports is that Philippine exporters provided 8.3 billion pieces in 2009, compared with 1 billion forSingapore. The Thai Tobacco Monopoly has a modern factory nearBangkokand the quality brands provide most of the sales in the country. Thai cigarette exports advanced to 1.3 billion pieces in 2009. BorderingCambodiaandLaosare markets with expansion potential.


Vietnam importing more cigarettes


Vietnam imported about 14 billion cigarettes valued at about $300 million annually during the last three years. Singapore delivered 6.3 billion pieces.IndonesiaandPhilippineseach exported over 400 million cigarettes in 2009 toVietnam.


Hong Kong maintains significant shipments to Asean


While cigarette exports from theUnited Statesand EU toSoutheast Asiahave fallen to token levels,Hong Kongremains an important supplier. The second-leading destination for Hong Kong’s cigarette exports in 2009 after China was Singapore with the shipment of 5.2 billion pieces.


Hong Kongexported 3.26 billion cigarettes toVietnamin 2009. Exports of 2.68 billion cigarettes from Hong Kong to Philippines were reported in 2009. The customs officials inManilaAirportsometimes look through baggage for passengers coming fromHong Kongto inspect for consumer goods purchased while on a shopping trip. The customs officials will waive American or European passengers on through, as they focus on returning Philippine residents.


Myanmar importing more cigarettes


Chinaincreased exports of cigarettes toMyanmarto 873 million pieces in 2009, compared with 658 million pieces in 2008. More small traders selling beans and other pulses toChinahave contact with Chinese importers. The barter trade between the traders fromMyanmarandChinamay include cigarettes not recorded in official trade numbers. China has a long border with Myanmar and significant trade in a wide range of items.


Malaysia’s cigarettes show upward trend


Malaysiaimported about 17 billion cigarettes annually during the last three years compared with 1.8 billion pieces in 2001. Indonesia shipped 9.3 billion cigarettes to Malaysia in 2009. A comparatively small river physically separates Singapore and Malaysia. China exported 1 billion cigarettes toMalaysiain 2009.


Singapore shifts to Asian suppliers for cigarette imports


After Cambodia, the second major importer among Asean is Singapore, with the arrival of about 18 billion pieces annually. A shift in the source of Singapore’s imports to Asean partners and Hong Kong has meant a loss of sales for exporters in the U.K. and United States from important deliveries two decades ago.


Search for expansion may bring focus on Myanmar


Myanmarmay be a market for potential gains for imports of cigarettes in the future. This is because of the way trade in other commodities expanded recently, and indications that officials are more open to improving international relations than during the hard line propelled earlier. As a member of Asean,Myanmarmay become more open to a number of factors to enhance economic development and attract foreign investors.


Chinawas the leading supplier of imported cigarettes inMyanmarin recent years, and most of those deliveries went to northernMyanmar.