Why is the U.S. Chamber of Commerce playing patsy to the tobacco industry, and what does this mean for Australia?

NYS postcard

“From Ukraine to Uruguay, Moldova to the Philippines” – according to the New York Times – the U.S. Chamber of Commerce and its affiliates “have become the hammer for the tobacco industry”.  This is revealed by “interviews with government ministers, lobbyists, lawmakers and public health groups in Asia, Europe, Latin America and the United States.”

By Presidential order, U.S. federal agencies are not supposed to promote the export or sale of tobacco products in their global trade promotion activities.  However, the U.S. Chamber of Commerce is a business federation of American companies and business associations, so it can do what it likes.  It spends more on lobbying than any other U.S. industry group.  There’s an Australian branch with offices in all state capitals.  They may be wining and dining our politicians even as we speak.

The pro-tobacco lobbying activities of the U.S. Chamber are summarised in a report recently published by a coalition of U.S. public health and consumer rights groups, entitled U.S. Chamber of Commerce – Blowing Smoke for Big Tobacco.

As the BMJ points out, in 2009, the U.S. Chamber made a submission to Australia’s Preventative Health Taskforce, which had been tasked by former Health Minister Nicola Roxon to develop a national strategy to reduce the burden of disease from alcohol, tobacco, and obesity.  That submission protested against the proposal for mandatory plain packaging of tobacco products.

In 2011, the Commonwealth Parliament passed the Tobacco Plain Packaging Act.  Evidence shows that it was immediately and highly successful in increasing the rate of quit attempts.  For more evidence, see this open access special supplement in Tobacco Control (April 2015) , or read on here.

In 2012, Ukraine lodged a complaint against Australia, arguing that the Act breached Australia’s obligations under a number of World Trade Organisation (WTO) Agreements.

According to Ukraine’s Prime Minister, Arseniy Yatsenyuk, Ukraine’s complaint against Australia was initiated at the request of the U.S. Chamber of Commerce.  The costs of the action were reported to be at least partly funded by British American Tobacco.

In May 2015, the WTO panel hearing the complaint was suspended at Ukraine’s request.  The reasons for this change of heart may include the closer ties between Australia and the Ukraine following the shooting down of MH17 (Australia has opened an embassy in Kiev and provided $100 million in assistance).   Ukraine’s complaint is not only inconsistent with its status as a party to the Framework Convention on Tobacco Control, but with its aspirations for a closer relationship with the EU and perhaps EU membership.  In 2014, the European Parliament and EU Council adopted the revised EU Tobacco Products Directive.

Multinational corporations producing harmful products – such as tobacco, or alcohol – can’t bring proceedings by themselves alleging that the laws and policies of foreign countries breach the WTO rules.  Instead, they rely on friendly governments to pursue complaints for them.  On the other hand, standing may be granted to foreign investors through investor-state dispute resolution clauses in trade and investment agreements.  Within the Asia-Pacific, the U.S. Chamber of Commerce has been lobbying heavily for the inclusion of investor-state dispute resolution clauses in the Trans Pacific Partnership Agreement – with no carve-outs or exclusions for tobacco.

The protection of wealth in the globalized trading system relies increasingly on large and powerful corporations using trade and investment agreements as a political tool, lobbying governments to weaken or abandon domestic health policies that could undermine revenues, and when they fail, trying to claw back compensation under variously worded clauses.  Trade and investment agreements might be complex, but countries that give foreign corporations – especially tobacco firms – the capacity to meddle in domestic health policies risk losing a significant measure of health sovereignty.

Larger countries may be willing to defend their sovereign laws, although doing so may come with a hefty price tag.  Smaller countries may lack not only the money, but the specialist knowledge, and the money to hire the specialist knowledge.  Australia’s bill for defending the complaint brought by Philip Morris Asia under Australia’s bilateral investment treaty with Hong Kong – claiming that the Tobacco Plain Packaging Act represents an expropriation of PM’s investments in Australia – has been estimated so far at $50 million. No wonder the U.S. Chamber doesn’t want any tobacco carve-outs. It knows that the value of the TPPA lies only partly in the legal rights conveyed through the terms of the agreement itself, and perhaps mostly in the political value of the agreement as a tool for tobacco companies to bully governments in an effort to weaken tobacco controls.

But back to the Ukraine. Thanks, apparently, to the U.S. Chamber of Commerce, a country with negligible trade links with Australia, and no tobacco trade, was able to begin the process of hauling a democratically elected government over the coals for passing legislation to reduce death and disease from tobacco use.

This raises some important questions.  Does the U.S. itself think its Chamber of Commerce has acted appropriately, and if not, does it have the capacity to haul it in?  If the Australian Business Council had lobbied, say, Indonesia, to bring a WTO claim against the U.S. attacking certain provisions of the U.S. Family Smoking Prevention and Tobacco Control Act, would that have been considered appropriate by our American friends?  Just how close has the U.S. Chamber gotten to Australian Ministers and negotiators in the current TPPA negotiations?  This is an important question that should be answered, especially since public health experts have been completely frozen out.  If the U.S. Chamber of Commerce is a tobacco lobby, shouldn’t the Australian government declare all meetings with it in which the status of tobacco in the TPPA is discussed, in order to meet its obligations under the Guidelines for Article 5.3 of the FCTC?

Free trade is central to Australia’s economic prosperity, now and in the future.  But saying that doesn’t mean we need to abandon all nuance, and give  tobacco, alcohol, food, pharmaceutical or indeed any other kind of corporations the right to claim compensation if our non-discriminatory health policies undermine their revenues.  For diseases caused by tobacco use, harmful use of alcohol, and poor diet, better health necessarily means avoiding or moderating consumption, and that necessarily means fewer sales.

Currently, Australians can have no confidence that the government is not trading away its health sovereignty under the TPPA.  The government doesn’t trust you to see the draft text. The only way you will see it is if it is leaked.  The TPPA perfectly illustrates the structural weakness in global health governance generally: negotiations that could have a massive impact on the health of future generations are being carried out in secret, in trade and economic forums, and health has no seat at the table.

For cynically disregarding the health sovereignty of nations, for being a shameless patsy to the U.S. tobacco industry in violation of U.S. federal policy, the U.S. Chamber of Commerce is hereby re-named the U.S. Chamber of Tobacco.  Off to the dog box, now, Chamber.  No supper for you…

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