How Industry Might Use Free Trade and Investment Agreements to Oppose Smokefree 2025

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1 How Industry Might Use Free Trade and Investment Agreements to Oppose Smokefree 2025 Professor Jane Kelsey, School of Law, The University of Auckland, NZ, 8 November 2012

2 Focus of this presentation 1. What are free trade and investment agreements (FTIAs) and impacts on Smokefree NZ? 2. What new issues arise in the Trans-Pacific Partnership Agreement negotiations 3. What can the tobacco control community do? 8 November 2012

3 Invisibility of the issues Maori Affairs Committee 2010 FTIA issues invisible Cabinet papers & RIA minimal FTIA content redacted Tobacco industry pressure has raised profile of issues Complex and secretive area Turanga Report International Trade Law & Tobacco Control aims to identify legal pressure points, legal risks and chilling effect from current and proposed FTIAs 9 August 2012

4 NZ s free trade & investment treaties NZ is obliged to comply with rules under The World Trade Organisation Bilateral and regional free trade agreements (Australia, ASEAN, Brunei, Chile, China, Hong Kong, Malaysia, Singapore, Thailand) Investment treaties (Hong Kong & the FTAs ) More are being negotiated, Notably Trans-Pacific Partnership agreement (TPP) with 10 other countries, including USA 8 November 2012

5 Key rules that affect tobacco policies Goods not restricting or discriminating against imported tobacco products Technical Barriers to Trade - labelling, technical standards (eg tar levels) must be evidence based & least restrictive to achieve goals Intellectual Property Rights protect trademarks and geographical indicators Services not restrict wholesale & retailers, advertising, duty free stores, etc or use monopolies where government has made commitments Investment not discriminate or regulate in ways that significantly affect value of investment (including factories & trademarks) Mutual recognition with Australia

6 Impact on domestic policy decisions Enforcement: states can require consultations and take disputes in private ad hoc tribunals; investors can sue states in a private international tribunal for compensation TPP will add Regulatory Coherence chapter: Mandatory central agencies to ensure best practice regulatory impact assessments support least restrictive option, scientific proof of effectiveness, cost-benefit analysis, etc Transparency: mandatory consultation, response to submissions, appeal, review, ammunition for disputes

7 Chilling effect on tobacco policy decisions The tobacco industry wants to influence policies. Legal costs of disputes average $8 million, average time 6 years A chilling effect on government is preferable to an actual dispute: States threaten to lodge complaints or do so; Commercial interests threaten to lodge complaints or do so; Pressure from industry during regulatory impact assessments and obligatory consultations; Pressure on health officials from trade ministries & Treasury Health ministries caution to avoid pressure.

8 Public health exceptions WTO: Very unreliable, though that is improving FTIAs: totally unpredictable cos ad hoc tribunals Exception in TPP won t apply for investment chapters; New TPP exception discussed for tobacco, won t apply to investment, mutual recognition, transparency, regulatory coherence

9 Final observations Governments have the right to regulate tobacco as they see fit in the public interest But potential collisions with FTIAs Compatibility issues with Australia No tidy solution to competing priorities FTIA rules trump FCTC in trade & investment arena Enormous pressure & public campaigns by industry 8 November 2012

10 Smokefree by 2025 will require Awareness and assessment of arguments Commitment to policies Strategic decisions about which fights to pick Political will following Australia s example 8 November 2012

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