WASHINGTON, D.C. — Negotiations for one of the largest trade deals in recent history were completed earlier this month, as leaders from the United States and 11 other nations completed talks for the Trans-Pacific Partnership (TTP).
The deal, if approved, would join 40 percent of the world’s economy in what would be the globe’s biggest trade deal in the past 20 years, since the World Trade Organization was created in 1995. TPP primarily seeks to lower trade barriers among the 12 countries, establish a common framework for intellectual property and enforce standards for labor and environmental laws.
"We can promote growth through trade that meets a higher standard," said President Barack Obama to the U.N. General Assembly. "That’s what we’re doing through the Trans-Pacific Partnership – an agreement that will open markets while protecting the rights of workers and protecting the environment that enables development to be sustained."
Trade with the countries involved accounted for 42 percent of U.S. agriculture exports in 2014 and contributed $63 billion to the U.S. economy. American agriculture supports about 1 in 11 domestic jobs, while agricultural trade supports more than 1 million U.S. jobs.
"An agreement on the Trans-Pacific Partnership negotiations provides a more level playing field in trade for American farmers," said USDA Secretary Tom Vilsack. "Thanks to this agreement and its removal of unfair trade barriers, American agriculture exports will expand even further. Increased demand for American agricultural products and expanded agricultural exports as a result of this agreement will support stronger commodity prices and increase farm income."
This sentiment is not shared by all of the tobacco industry. While TPP will remove tariffs for tobacco to Japan and Vietnam, under the deal, foreign governments will be allowed to block tobacco companies from suing over anti-smoking measures in their respective nations. Because of this provision, TPP has received pushback from some in Congress. "I’ll not only vote against it, I’ll work hard to have it defeated if it goes in the final agreement," Sen. Thom Tillis (R-N.C.) told The New York Times. "Once you carve out someone from dispute settlement agreements, then who’s next?"
Many in the tobacco industry echo that statement. "Tobacco is looked at as a bad omen and this administration is not a big fan of our industry", said Pat Raines, president of the Burley Tobacco Growers Cooperative Assoc. "However, my biggest concern is what they would carve out later."
Companies have the ability to take other nations to trial for legislation, which would hurt their respective businesses thanks to investor-state dispute settlement provisions (ISDS). Provisions for ISDS are contained in numerous trade agreements such as the North American Free Trade Agreement.
If two nations have agreed to ISDS, and one violates the rights granted to another under public international law, then that respective industry or investor may bring the matter before an arbitral tribunal. An example of this was a claim filed by Philip Morris International and British American Tobacco in May, which sued the British government for a law requiring plain packaging for cigarettes in lieu of branded packaging.
Philip Morris is currently in litigation with Australia and Uruguay for similar measures regarding the plain packaging of cigarettes. Although still in the early "jurisdictional" phase, the Australian government has reportedly spent more than $50 million in legal fees.
Under TPP, tobacco companies would not be able to pursue litigation through the tribunals, but would instead be forced to go through domestic courts when bringing a grievance against a host state.
"The tobacco industry and its political allies claim this provision would harm to-bacco farmers," a Campaign for Tobacco-Free Kids release said. "This provision would not impact trade of tobacco leaf in any way and includes language specifically exempting tobacco leaf.
"It is focused on preventing tobacco manufacturers’ abuse of the international trade system and addresses the actions of these manufacturers, not growers."
Final text of the TPP is not expected to be released until late October.