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The Trans-Pacific Partnership Agreement and the ISDS Carve-out for Tobacco Control Measures

Published online by Cambridge University Press:  20 January 2017

Lukasz Gruszczynski
Lukasz Gruszczynski*
Affiliation:
Institute of Legal Studies, Polish Academy of Sciences and the European School of Law and Administration (Warsaw, Poland)
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Abstract

This report analyzes the tobacco carve-out clause (as well as the negotiations that led to its adoption) included in the final text of the Trans-Pacific Partnership Agreement, which permits the TPP Parties to deny investors that challenge their tobacco control measures access to the investor-state dispute settlement mechanism. The report also discusses the potential advantages and disadvantages of such a solution.

Type
Reports
Information
European Journal of Risk Regulation , Volume 6 , Issue 4 , December 2015 , pp. 652 - 658
Copyright
Copyright © Cambridge University Press 2015

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References

1 For the full text of the agreement see the official webpage of the New Zealand Ministry of Foreign Affairs & Trade: http://www.mfat.govt.nz/Treaties-and-International-Law/01-Treaties-for-which-NZ-is-Depositary/0-Trans-Pacific-Partnership-Text.php (last accessed 24 November 2015).

2 Stumberg, R., Safeguards for Tobacco Control: Options for the TPPA, 39 American Journal of Law & Medicine 382 (2013), p. 394 CrossRefGoogle ScholarPubMed (but note that most of applied rates on tobacco products (but not tobacco leafs) are already quite low).

3 E.g., K. Hirono, D. Gleeson, F. Haigh & P. Harris, The Trans Pacific Partnership Agreement Negotiations and the Health of Australians: A Policy Brief, Centre for Health Equity Training, Research and Evaluation, Centre for Primary Health Care and Equity, UNSW Australia: 2014.

4 Stumberg, supra note 2, p. 391.

5 Mitchell, A., Voon, T. & Whittle, D., Public Health and the Trans-Pacific Partnership Agreement, 5(2) Asian Journal of International Law 279 (2015)CrossRefGoogle Scholar.

6 Fooks, G. & Gilmore, A., International Trade Law, Plain Packaging and Tobacco Industry Political Activity: The Trans-Pacific Partnership, 23 Tobacco Control e1 (2014), pp. 4–5 Google ScholarPubMed. But see, Mercurio, B., International Investment Agreements and Public Health: Neutralizing a Threat through Treaty Drafting, 92 Bulletin of the World Health Organization 520 (2014)CrossRefGoogle ScholarPubMed (claiming, on the basis of the leaked investment chapter, that indirect expropriation was conceptualized narrowly).

7 Kelsey, J., The Trans-Pacific Partnership Agreement: A Gold- Plated Gift to the Global Tobacco Industry?, 39 American Journal of Law & Medicine 237 (2013), p. 245 CrossRefGoogle ScholarPubMed.

8 Fooks & Gilmore, supra note 6, p. 3. On the regulatory chilling effect resulting from international trade and investment rules, see Gruszczynski, L., Australian Plain Packaging Law, International Litigations and Regulatory Chilling Effect, 2 European Journal of Risk Regulation 242 (2014)Google Scholar.

9 Lin, T., Preventing Tobacco Companies’ Interference with Tobacco Control Through Investor-State Dispute Settlement under the TPP, 8(2) Asian Journal of WTO and International Health Policy & Law 565 (2013)Google Scholar. But see Mitchell et al, supra note 5, who claim that carefully drafted exception clauses can address most of the concerns raised by health advocates.

10 Notice of Arbitration under the Australia/Hong Kong Agreement for the Promotion and Protection of Investments (Philip Morris Asia Limited), 16 November 2011, available at: http://www.italaw.com/sites/default/files/case-documents/ita0665.pdf (last accessed 24 November 2014).

11 United States Trade Representative, Fact Sheet: TPP Tobacco Proposal, 18 May 2012, available at: https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2012/may/tpp-tobacco-proposal (last accessed 24 November 2015).

12 United States Trade Representative, Fact Sheet: New U.S. Proposal on Tobacco Regulation in the Trans-Pacific Partnership, 21 August 2013, available at: https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2013/august/fact-sheet-tobacco-and-tpp (last accessed 24 November 2015).

13 E.g., U. Jatkar, TPP Agreement Negotiations and Tobacco, paper available at the O’Neill Institute for National & Global Health Law webpage: http://www.oneillinstituteblog.org/tpp-agreement-negotiations-tobacco/ (last accessed 24 November 2015).

14 NC Agribusiness Council, National Foreign Trade Council, US Chamber of Commerce – US Council for International Business, A Letter to Jacob Lew, Chief of Staff of the White House, 28 June 2012, available at: http://www.ciclt.net/sn/new/n_detail.aspx?ClientCode=ncagbc&N_ID=45854 (last accessed 24 November 2015).

15 Mitchell et al., supra note 5.

16 E.g., SEATCA (Southeast Asia Tobacco Control Alliance), Crucial to Support Malaysia's Proposal on Tobacco at TPP Ministerial, statement, 22 February 2014, available at: http://seatca.org/?p=3557 (last accessed 24 November 2015).

17 The text of the Malaysia proposal is not publicly available.

18 US Department of Agriculture, Trans-Pacific Partnership. Benefits to U.S. Agriculture, 16 October 2015, available at: http://www.fas.usda.gov/sites/default/files/2015-10/tpp_details_tobacco_10-16-15_0.pdf (last accessed 24 November 2015).

19 Cf. Art. 17 of the 2012 U.S. Model Bilateral Investment Treaty, available at: https://ustr.gov/sites/default/files/BIT%20text%20for%20ACIEP%20Meeting.pdf (last accessed 24 November 2015).

20 For a historical review of the denial-of-benefits clause, see e.g., L.A. Mistelis & C.M. Baltag, Denial of Benefits and Article 17 of the Energy Charter Treaty, 113 Penn State Law Review 1301 (2009).

21 Sinclair, A. C., The Substance of Nationality Requirements in Investment Treaty Arbitration, 20(2) ICSID Review 357 (2005), p. 388 CrossRefGoogle Scholar.

22 E.g., Art. 41 of the ICSID Arbitration Rules provides that jurisdictional objections shall be made as early as possible, but not later than the expiration of the time limit fixed for the filing of the counter-memorial (available at: https://icsid.worldbank.org/apps/ICSIDWEB/icsiddocs/Pages/ICSID-Convention-Arbitration-Rules .aspx last accessed 24 November 2015).

23 H. Chang, Research Gaps Related to the Environmental Impacts of Electronic Cigarettes, 23(Suppl 2) Tobacco Control ii54 (2014), doi: 10.1136/tobaccocontrol-2013-051480.

24 L. K. Lempert, R. Grana & S. A. Glantz, The Importance of Product Definitions in US E-cigarette Law and Regulations, Tobacco Control 2014, doi:10.1136/tobaccocontrol-2014-051913, p. 6; see also, L. Bauld, There's no evidence e-cigarettes are as harmful as smoking, The Guardian, 23 February 2015, available at: http://www.theguardian.com/science/sifting-the-evidence/2015/feb/23/theres-no-evidence-e-cigarettes-are-as-harmful-as-smoking (last visited 24 November 2015). Overall, synthetic nicotine is currently used in industrial production (e.g. as an ingredient of certain pesticides).

25 K. Hughes, U.S. submits compromise on anti-tobacco laws under Pacific trade deal, Reuters, 1 October 2015, available at: http://www.reuters.com/article/2015/10/02/trade-tpp-investment-idUSL1N1211QY20151002#rHxevdoHDAH28t1a.97 (last accessed 24 November 2015).

26 E.g., Campaign for Tobacco-Free Kids, In Historic Step for Public Health, Trans-Pacific Partnership Protects Health Measures from Tobacco Industry Attack, 5 October 2015, available at http://global.tobaccofreekids.org/en/global_updates/detail/2015_10_05_TPP (last accessed 24 November 2015).

27 See e.g., Action on Smoking & Health, Tobacco Carve-Out in TPP, Major Victory for Public Health, 5 October 2015, available at: http://ash.org/breaking-tobacco-carve-out-in-tpp/ (last accessed 24 November 2015).

28 Ibidem.

29 Philip Morris International, PMI Comments on Trans-Pacific Partnership (TPP) Agreement, undated document, available at: http://www.pmi.com/eng/media_center/media_kit/Pages/PMI_Comments_on_Trans_Pacific_Partnership_Agreement.aspx (last accessed 24 November 2015).

30 S. Lester, Will Tobacco Kill the Trans-Pacific Partnership?, 14 October 2015, available at: http://www.cato.org/publications/commentary/will-tobacco-kill-trans-pacific-partnership (last accessed 24 November 2015).

31 Mitchel et al., supra note 5, p. 292. See also, Strawbridge, J., Cigarettes, TPP, and the Wisdom of Product-Specific Rules in Trade Deals, 9(5) Transnational Dispute Management (2012)Google Scholar.

32 W. S. Wan Jan, Exemptions will undermine trade pact, The Straits Times, 16 April 2014, available at: http://documents.nam.org/IEA/NATL_EDITION_StraitsTimes_Wan_Saiful_Wan_Jan.pdf (last accessed 24 November 2015); S. Hackbarth, No Exclusions! Why Carveouts Would Weaken the Trans-Pacific Partnership, US Chamber of Commerce webpage, available at: https://www.uschamber.com/above-the-fold/no-exclusions-why-carveouts-would-weaken-the-trans-pacific-partnership (last accessed 24 November 2015).

33 For these kinds of arguments, see NC Agribusiness Council et al., supra note 14; National Foreign Trade Council, A Letter to Michael Froman, United States Trade Representative, 22 August 2013, available at http://www.nftc.org/default/Publications/Trade_Policy/TPPLetter082213.pdf (last accessed 24 November 2015).

34 Consider, for example, various taxes on sugary drinks, health warnings (including pictorial ones, as are currently contemplated by Thailand) and comprehensive advertising bans on alcohol products. See also e.g., P. Stephens, Food should be regulated like tobacco, say campaigners, 14 May 2014, available at: http://www.bbc.com/news/health-27446958 (last accessed 24 November 2015).

35 Cf. e.g. with the statement made by the President Barack Obama in his State of Union Address (Remarks by the President in State of the Union Address, 20 January 2015, available at https://www.whitehouse.gov/the-press-office/2015/01/20/remarks-president-state-union-address-january-20-2015 (last accessed 24 November 2015).

36 National Association of Attorneys General, A Letter to Michael Froman, United States Trade Representative, 27 January 2014, available at: https://www.iowaattorneygeneral.gov/media/cms/TPP_Letter_5F298DB8F70E7.pdf (last accessed 24 November 2015).

37 See e.g., Leonard, K., Domestic Violence and Alcohol: What is Known and What Do We Need to Know to Encourage Environmental Interventions?, 6(4) Journal of Substance Use 235 (2001)CrossRefGoogle Scholar.

38 Cf., World Health Organization, Global Action Plan for the Prevention and Control of Noncommunicable Diseases 2013-2020, World Health Organization, Geneva: 2013, available at: http://apps.who.int/iris/bitstream/10665/94384/1/9789241506236_eng.pdf?ua=1 (last accessed 24 November 2015).