Aug 12 2015

Sen. Thom Tillis (R-NC) last week warned U.S. Trade Representative Michael Froman that including any type of carveout in the Trans-Pacific Partnership (TPP) for anti-tobacco regulations could run afoul of the negotiating instructions laid out by Congress in the fast-track law and accompanying committee reports to the extent that it could prompt lawmakers to strip a final deal of fast-track protection.

In an Aug. 5 letter to Froman, Tillis said he has met with Senate Majority Leader Mitch McConnell (R-KY) and Senate Finance Committee Chairman Orrin Hatch (R-UT) and that they both oppose a tobacco carveout in any form. He hinted that they also share his views that a carveout could be a potential violation of the objectives in the fast-track law.

“I share their view that the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA) set clear directives for you and your team, and raise the specter that the TPP is not necessarily entitled to its otherwise privileged status if those directives are not honored throughout the negotiations,” he wrote.

The fast-track law lays out a principal negotiating objective “to obtain competitive opportunities for United States exports of agricultural commodities in foreign markets substantially equivalent to the competitive opportunities afforded foreign exports in United States markets and to achieve fairer and more open conditions of trade in bulk, specialty crop, and value added commodities."

The committee report language referred to by Tillis states that the investor-state dispute settlement (ISDS) mechanism should be available to all investors, without discrimination against a given product or a given sector.

In his letter, Tillis asked Froman for access to any negotiating documents related to a tobacco carveout in TPP. “Consistent with the consultation requirements of Section 104 of the Congressional Trade Priorities and Accountability Act of 2015, I respectfully request access to pertinent negotiation documents which touch upon disparate treatment of any agricultural commodity, in any form, and am willing to coordinate as necessary to maintain the confidentiality of such documents,” he said.

Section 104 lays out the requirements for USTR to consult and share information with Congress, trade advisory committees and the public regarding ongoing trade negotiations. Section 104(a)(1)(A) requires that USTR, “upon request of any Member of Congress, provide access to pertinent documents relating to the negotiations, including classified materials."

Tillis made the claim that a tobacco carveout could run counter to the fast-track law the same day he acknowledged in a separate letter to Hatch that his efforts to fight the carveout have fallen on deaf ears with USTR. “Current negotiations reveal a general lack of respect for congressional involvement and oversight in trade negotiations [on the part of USTR],” Tillis wrote in the letter, which he then forwarded to Froman.

A private-sector source said Tillis's warning that a TPP deal could lose its fast-track protection appears to refer to the ability of the House and Senate leaders under the fast-track law to strip a trade agreement implementing bill of its privileged status by changing the rules of either chamber.

In his letter to Hatch, Tillis also questioned what he says are Froman's claims that a “sizable” bloc of trading partners has demanded the tobacco carveout. He said that private-sector sources close to the negotiations “paint a very different picture,” and that there are no foreign press reports backing up Froman's claims. “It's not clear this is a 'must have' for any of the participating countries except the U.S.,” Tillis wrote.

In a July 30 floor speech, Tillis explained how a tobacco carveout could run afoul of the TPA principal negotiating objective seeking access for U.S. agricultural exports in foreign markets that is “substantially equivalent” to their access to the U.S. market.

If a tobacco carveout is included in TPP, then regulatory behavior in the U.S. that affects tobacco could still be challenged under the U.S. court system with its due process guarantees, but such behavior by another TPP country could not be held to the same standard, he signaled.

Read the full article here.