Tobacco ‘carve-out’ sparks bid to sink TPP

Lawmakers from tobacco-producing states and business groups are aiming to torpedo a sweeping Asia-Pacific deal over a provision they believe will severely damage the U.S. industry. 

Delegates from North Carolina, where the majority of the nation’s tobacco is grown, says language unveiled this week in the Trans-Pacific Partnership (TPP) unfairly targets the Tar Heel State’s prized crop.

{mosads}North Carolina Republican Sens. Thom Tillis and Richard Burr supported legislation handing President Obama fast-track authority, which leaves Congress without a chance to amend the TPP, though they warned the White House not to heed calls to exempt tobacco from protections allowed for other agricultural sectors.

The final deal between the United States and 11 other nations, however, removes legal protections for tobacco interests, giving the participating countries more power to deliver potent health messages. 

“Breaking the long-standing tradition of not picking winners and losers in trade agreements, the Obama Administration has decided to use the TPP as a laboratory for partisan politics by discriminating against specific agricultural commodities,” Tillis said in a statement. 

“This sets a dangerous precedent for future trade agreements, and I will not only vote against the TPP, but actively work to help defeat its ratification in the Senate.”

Obama is already facing a slim margin of support in each chamber, and he will need a large contingent of congressional Republicans to win approval because a majority of House and Senate Democrats oppose the deal.

Congress is expected to vote on the package — a victory Obama wants for his legacy — early next year.

But already, the deal is under fire from various groups across the political spectrum, including the tobacco industry. Indeed, tobacco giant Philip Morris has lambasted the tobacco carve-out in the deal.

“The agreement creates a system of fair and equal treatment and then hangs a ‘Do Not Enter’ sign for millions of people who work and trade in tobacco,” the company said in a statement on Wednesday. 

“The biggest loser is the rule of law, and all investors should be on guard because selective justice and discrimination respect no boundaries.”

Under the agreement, each country has the right to regulate manufactured tobacco products, such as cigarettes, as part of any effort to protect public health. Under the exemption, private investors can’t challenge tobacco control measures under the Investor-State Dispute Settlement (ISDS) process. 

The TPP doesn’t affect the export of tobacco leaf and instead focuses on public health issues such as packaging and anti-smoking campaigns.

Still, the Tobacco Growers Association of North Carolina sent a letter to North Carolina House lawmakers on Tuesday saying they aren’t convinced with the White House’s argument that the carve-out protects tobacco growers.

“This administration promised North Carolina’s congressional delegation that they would not unfairly target tobacco growers in the TPP talks and we are profoundly disappointed to learn that this promise has been broken,” the growers wrote in a the letter obtained by The Hill.

Tobacco is North Carolina’s largest agricultural export and could represent a boost of $100 million in increased exports there, they said. 

“We respectfully call on the entire delegation to oppose the TPP as it stands and demand the removal of the tobacco language before it comes before congress,” they wrote.

White House press secretary Josh Earnest explained on Tuesday that the agreement in the TPP “gives the health authorities in individual countries the rights and responsibilities to essentially establish their own public health policies.” 

“And certainly the president would be an aggressive advocate of making sure that public health authorities inside the United States have all the authority that they need to protect the health and well-being of the American people. And that’s why those rules are written the way they are,” Earnest said.

House and Senate lawmakers, along with a coalition of powerful business groups — including the U.S. Chamber of Commerce and National Association of Manufacturers, which have backed the president’s trade agenda — repeatedly warned about the dangers of excluding products from the TPP’s rules. 

“Going down such a path will weaken the final deal and set the wrong standard for trade agreements going forward,” the groups said in a statement last week.

After Monday’s completion of the deal, they reserved their opinion on the overall agreement but said that if it does eliminate trade barriers it would be a “game-changer for American workers, farmers and companies.” 

Senate Majority Leader Mitch McConnell (R-Ky.), who has warned the White House not to target tobacco, told reporters on Tuesday there were “a number of troubling parts,” but he said that senators were still in the process of reading the agreement to determine their stance on the deal. 

House Agriculture Committee Chairman Mike Conaway (R-Texas) took a similar tack, highlighting a letter he wrote last week with 16 lawmakers who voiced concerns about the tobacco provision.

“While I am encouraged to hear that U.S. livestock products such as beef and pork will see significant gains in market access, it will take a coalition of many to move TPP over the coming months,” Conaway said in a statement. “At this time, I am skeptical that these concerns were sufficiently addressed but will remain open-minded.”

The tobacco provision, however, has backers on the left.

At the end of September, 21 of the 28 House Democrats who voted for fast-track said they backed the provision.

Ways and Means Committee ranking member Sandy Levin (D-Mich.), who voted against fast-track authority, said the removal of “tobacco from investor-state dispute settlement is a vital and welcome step in allowing countries to protect their public health.” 

In the Senate, Finance Committee ranking member Ron Wyden (D-Ore.), along with several other Senate Democrats, expressed support for the new tobacco language. 

“Importantly, I understand that this deal will ensure that countries that are part of it can regulate tobacco without fearing intimidation and litigation by Big Tobacco,” Wyden said.