TPP trade deal: plain packaging challenge triggered 'hysteria', lawyer

tells MPs

 

Lawyer for Philip Morris’s bid to take Australia to court over cigarette

laws says Australia has nothing to fear from trade deals that allow

investor-state disputes

 

Katharine Murphy Political editor

 

Monday 10 October 2016 04.30 AEDT Last modified on Monday 10 October

2016 05.23 AEDT

 

The legal counsel to tobacco giant Philip Morris has told a

parliamentary committee that people have responded hysterically to a

landmark legal case challenging Australia’s plain packaging laws.

 

Philip Morris, in the first investor-state dispute ever brought against

Australia, used a 1993 investment agreement between Australia and Hong

Kong to challenge the then Labor government’s plain packaging laws.

 

The case was thrown out in December 2015 when an international tribunal

issued a decision that it had no jurisdiction to hear Philip Morris

Asia’s claim.

 

The action was considered an important test case in investor-state

litigation and it prompted the New Zealand government to delay

implementation of its own plan packaging proposal until the decision had

been handed down.

Court condemns tobacco giant Philip Morris over secret bid to sue Australia

Read more

 

The federal parliament’s treaties committee has been conducting an

inquiry into the Trans-Pacific Partnership, and has heard evidence from

Sam Luttrell, a lawyer at the Perth-based legal firm Clifford Chance –

the largest legal practice in Australia dealing with investor-state

dispute settlement cases.

 

Luttrell confirmed to the committee during a recent hearing about the

TPP that he was counsel for Philip Morris in the landmark plain

packaging case, which he said had been mightily overblown.

 

"I was counsel for Philip Morris, and I would just like to say, picking

up on something I said earlier, that I think there was a good deal of

hysteria around the Philip Morris case," he told the committee.

 

"There was a very intense and often heated dialogue surrounding that

case whilst it was on foot, and then you heard a deafening silence when

Australia saw that claim off — and saw that claim off on a preliminary

basis."

 

The American-led trade pact, the TPP, contains an investor-state dispute

settlement (ISDS) clause, and such clauses are an increasingly

controversial feature of international trade agreements.

 

ISDS clauses give overseas investors powers to sue the Australian

government if legislation is introduced harming their investments.

 

The Turnbull government is a strong supporter of the TPP and the prime

minister used a recent trip to the United States to urge the US Congress

to ratify the trade pact because it underscores America’s strategic

commitment to the rule of law in the Asia-Pacific region.

 

China is not a party to the TPP, and is pushing a rival trade pact,

through Asean – the regional comprehensive partnership.

 

Barack Obama is making what is being characterised in the US as

last-ditch efforts to persuade Congress to support the controversial

trade deal. Both presidential hopefuls Donald Trump and Hillary Clinton

say they oppose it.

 

But some analysts believe the trade deal could be ratified during the

so-called lame-duck session – the period between the US election result

in November and the inauguration in January.

 

Both Labor and the Greens opposed ISDS clauses in trade agreements.

 

Philip Morris’ counsel told parliament’s treaties committee "a country

like Australia, with a tradition of reliance on exports, a history of

foreign investment in the Asia-Pacific and a future in which its highly

mobile, well-educated populace is increasingly engaged in cross-border

services, has everything to gain from participating in initiatives like

the TPP."

 

"But still there has been a heated debate in Australia around the TPP’s

investment rules, in particular the ISDS mechanism of the treaty,"

Luttrell said.

 

"Much of what has been said in this debate is and has been simply, in my

view, an overreaction to a single case, being the claim by Philip Morris

against Australia, which Australia successfully knocked out on a

preliminary basis."

 

Luttrell was asked during the hearing by ALP backbencher Josh Wilson for

his view on regulatory chill – a situation that develops when countries

second-guess themselves or do not go down a particular regulatory path

out of fear that policy making would trigger an ISDS liability.

 

The lawyer said the evidence for regulatory chill was "largely anecdotal

at present, but there have been cases where states have stayed their

legislative hand when faced with investor claims".

 

"Whether they should or should not have done so is a question of whether

the regulation was good or bad. There is, I think, in the regulatory

chill thesis an unwritten assumption that regulation is good," Luttrell

said.

 

"I would say, and it is very much my experience, that regulations often

deserve to be chilled."

 

Wilson later told Guardian Australia: "Some believe that foreign

companies should be able to influence domestic policy and that so-called

regulatory chill is not a bad thing."

How can Philip Morris sue Uruguay over its tobacco laws? | Alfred de Zayas

Read more

 

"I absolutely disagree, and even the proponents of ISD appearing before

the committee have tended to accept there’s no value in or need for ISD

provisions between us and countries like the US, Japan, and Canada," the

ALP backbencher said.

 

Wilson contended Australia had already endured a "brush with death"

during the landmark Philip Morris case.

 

"Phillip Morris had a serious go at killing off an important health

reform in Australia and succeeded in delaying a similar reform in NZ for

three years," he said.

 

"In my view ISD represents an unconscionable risk and at the very least

should be excluded between Australia and the US, Japan, and Canada, just

as we have already excluded it between Australia and New Zealand."

 

 

 

2016-09-08T16:06:31+00:00

 

Zaid Jilani

 

A PROVISION THAT would let foreign corporations challenge new American

laws and regulations has become the latest flashpoint in the battle over

the Trans Pacific Partnership trade agreement, even as President Obama

on Tuesday said he will renew his push for its passage in the lame-duck

session of Congress.

 

"We’re in a political season now and it’s always difficult to get things

done," Obama said at a town hall meeting in Laos. "So after the

election, I think people can refocus attention on why this is so

important." He sounded confident: "I believe that we’ll get it done."

 

The latest salvo from opponents of the deal came in the form of a letter

to Congress signed by hundreds of law professors and economists –

including Laurence Tribe, who taught Obama at Harvard – protesting the

inclusion of "Investor State Dispute Settlement" (ISDS) provisions in

the TPP agreement.

 

The ISDS provisions would empower corporations who object to U.S. laws

and regulations that cut into their profits to sue the United States

before an international arbitration panel. The signatories to the letter

write that this "system undermines the important roles of our domestic

and democratic institutions, threatens domestic sovereignty, and weakens

the rule of law."

 

Senator Elizabeth Warren, D-Mass., a leading critic of the ISDS

provisions, introduced the letter on a conference call hosted Wednesday

by the advocacy group Public Citizen.

 

"It’s about leverage," Warren said. "Leverage for big companies to

threaten an intimidate governments who might dare take action that

threatens their profits."

 

She cited the example of Canada being successfully sued under ISDS rules

contained in the North American Free Trade Agreement (NAFTA) by a

U.S.-based company that was denied a permit for an open-pit mining project.

 

Listen to the call:

 

The Obama administration has pushed back at critics of the ISDS

provisions, saying that it is a routine system that exists in thousands

of other international agreements, including 50 that the United States

is currently a party to.

 

But that routine system has undermined domestic laws in some countries.

 

Buzzfeed’s Chris Hamby recently reviewed dozens of ISDS rulings,

documenting how corporations used these international arbitration panels

to avoid the reach of domestic courts.

 

For instance, following the ouster of Egyptian dictator Hosni Mubarak,

the country sentenced Dubai-based real estate mogul Hussain Sajwani to

five years in prison for corruption charges related to a sweetheart land

deal between his company Damac Properties and the country’s Mubarak-era

tourism minister.

 

Within a week of his conviction, Damac decided to sue Egypt using the

World Bank’s arbitration process – arguing that because the previous

regime had agreed to the terms, the deal was not criminal.

 

As Sajwani enlisted the help of some of the world’s top ISDS lawyers to

argue his case in a court in Paris, Egypt decided to settle. The terms

of the settlement are confidential, but we do know that Sajwani’s prison

sentence was completely eliminated.

 

That set a precedent for a wave of ISDS claims. More and more firms used

the ISDS process to avoid penalties handed down from Egypt’s courts.

 

Under the TPP, the U.S. would be exposed to a larger number of potential

ISDS claims.

 

"If these provisions are included in TPP, the number of foreign

investors who’d be empowered to use this mechanism would double from

what we currently have in our 50 agreements already," said Melinda St.

Louis, international campaigns director at Public Citizen’s Global Trade

Watch.

 

In all, Public Citizen estimates that passage of the TPP would newly

empower over 10,000 U.S. subsidiaries owned by foreign corporations to

launch investor-state cases against the American government.

 

Corporations from six countries that do not currently have the ability

to bring ISDS claims against the United States — Vietnam, Japan,

Malaysia, Australia, New Zealand, Brunei – would gain that right under

the TPP.

 

As The Intercept has previously reported, banks and other financial

institutions would be able to use TPP provisions to sue over virtually

any change in financial regulations affecting future profits in an

extra-judicial tribunal.

 

The United States has not yet lost an ISDS case, but is facing a major

claim from TransCanada. The company is using arbitration under NAFTA to

seek $15 billion after the Obama Administration decided not to approve

its Keystone XL Pipeline project.

 

 

 

Sanders, Progressives Brace for Lame-Duck TPP Battle

 

September 14, 2016

 

Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan have

made it clear that they do not believe the 12-nation Trans-Pacific

Partnership trade agreement should receive a vote in the lame-duck

session, the period after November’s elections and before the 115th

Congress is sworn in next year.

 

TPP opponents such Sen. Bernie Sanders (I-Vt.) aren’t convinced.

 

Sanders, who was joined by three leading House progressives, on

Wednesday insisted the TPP should not come up in the lame-duck session.

The lawmakers voiced their opposition with the same vigor they brought

months ago when they first made the same appeal. But that was when

Sanders was a Democratic presidential candidate, and lame-duck

consideration of the TPP appeared more likely.

 

The opponents are trying to ensure the prospects for consideration don’t

resurface. And they have backup from influential groups such as the

AFL-CIO and the Sierra Club, which participated in a "Day of Action"

Wednesday aimed at inundating lawmakers with communiques to oppose a

lame-duck vote.

 

Those groups’ opposition to the deal is not surprising. They have

lobbied against the TPP and related agreements for years. Even without

their protests, the trade agreement faces immense obstacles in Congress.

First, there are the comments ruling out a lame-duck vote from Ryan and

McConnell. Second, there is growing opposition to trade agreements,

including the TPP, from GOP presidential nominee Donald Trump and

anti-TPP comments from normally mainstream Republican Sens. Pat Toomey

of Pennsylvania and Rob Portman of Ohio.

 

Sanders says business groups will still attempt to use their influence

and coffers to push the deal through, with help from President Obama,

despite the beating the TPP has taken in the press and among Republicans.

 

"Why are we nervous? Well, we’re nervous because we’ve been here once or

twice before," Sanders told reporters Wednesday on Capitol Hill. "When

you have the Business Roundtable and virtually every multinational

corporation saying they want this, we understand that’s real power."

 

John Engler, president of the Washington-based Business Roundtable, said

in comments to reporters Monday that the group will continue its

"full-court press" for trade agreements such as the TPP.

 

Sanders said opponents of the trade deal are preparing for business

groups and the Obama administration to bombard voters with advertising

and on-the-fence lawmakers with political horse-trading. TPP opponents

say the same tactics characterized last year’s ultimately successful

efforts to grant Obama fast-track trade authority.

 

"TPP is the last major priority of this administration, and they are

going all in," said Rep. Rosa DeLauro (D-Conn.). "Make no mistake about

it: They will do virtually anything they need to do to get the votes. We

should anticipate more free rides on Air Force One, visits to the White

House, special events in members’ districts to try to gain favor for the

deal."

 

Valerie Jarrett, one of Obama’s closest advisers, made it clear in

separate remarks to a Wednesday meeting of the President’s Export

Council that Obama will fight hard for the TPP during his waning days in

office.

 

"Even though, as the president says, we’re in the fourth quarter, really

important things happen in the final seconds before the clock runs out,"

Jarrett said. "He is intent on making the absolute best of his remaining

time in office, and at the top of his agenda … is of course TPP."

 

Obama has indeed started to ramp up his pitch for the TPP, which he sees

as a vital component of his foreign policy and economic legacies.

 

During a Monday meeting with the top four Democrats and Republicans in

the House and Senate, Obama said he briefed the lawmakers on his

conversations with Asia-Pacific leaders during his recent trip to Asia.

He said the leaders expressed their desire to have the United States

participate actively in the international economy, according to White

House Press Secretary Josh Earnest.

 

Economies as wide-ranging in size as Japan, Mexico, Canada, Malaysia,

Vietnam and Brunei have agreed to the deal and are now in the process of

seeking approval through their domestic procedures.

 

Obama has said the TPP would be good for workers in the United States

and in the TPP trading zone, arguing that the accord has strong rules on

labor and the environment that go beyond the core goals of reducing

tariffs and other trade barriers.

 

Obama’s biggest political hurdle is the increasingly strong opposition

to the deal from Hillary Clinton. The Democratic nominee’s opposition to

the deal started with critical statements while she was running against

Sanders in the primary election. But her comments at the time didn’t

satisfy hard-line progressives. Her commitment to oppose the deal

culminated last month when she said that she opposes it now, will oppose

it after the election and will oppose it if she becomes president.

 

Sanders and DeLauro both indicated that they are satisfied with

Clinton’s stated opposition to the agreement.

 

Sen. Sherrod Brown of Ohio, another Democrat leading the opposition to

the deal who endorsed Clinton during the primary season, made similar

comments to Morning Consult last week. He blamed any skepticism over

Clinton’s opposition to a media narrative, rather than any genuine worry

among like-minded policymakers that she’ll backtrack on her statements

if she wins the White House.

 

"On this one, she’s against TPP," Brown said. "She’s said it, I believe

it. Nobody has a higher standard than I do on trade in this whole body.

I believe it. She’ll stay with it. She will work with us on a different

trade policy, period."

 

 

 

Foreign Policy In Focus

 

The National Security Case for a TPP Lame Duck Vote: Not!

 

When Congress meets for its lame-duck session after the elections, it

should resist pressure to pass the Trans-Pacific Partnership.

 

By Steve Suppan, October 12, 2016.

 

Notwithstanding President Barack Obama’s best efforts to sell the

Trans-Pacific Partnership (TPP) Agreement to Congress and the public on

economic grounds, presidential and congressional candidates are shunning

the TPP as a winning campaign issue. Even Senator Rob Portman, a former

U.S. trade representative, doesn’t mention the TPP in his electoral

"Jobs and Growth" agenda. The economic forecasting arguments for TPP are

very weak—even according to the "heroic assumptions" of proponents, such

as no change in the U.S. trade balance or net employment as a result of

the TPP. So, what arguments do the TPP proponents have left?

 

When Congress returns to Washington after the November 8 elections, its

members, particularly the defeated or retiring legislators, will be

pressured to vote for the TPP in large part on national security

grounds. What these grounds are, just like the draft TPP texts

themselves, will remain a closely guarded secret.

 

Representative Ron Kind (D-WI) told Inside U.S. Trade that following a

classified national security briefing about the TPP, "It’s a very

powerful argument; it’s not just trade, it’s an important tool in our

diplomatic and national security arsenal." He could not reveal the

details of the "very powerful argument" without violating his security

clearance. After the elections, Kind said, military leaders (presumably

retired, since active duty officers are not allowed to lobby) would be

deployed to lobby Congress to vote for the TPP. There will be more

classified briefings for members of Congress, followed by more press

conferences about the "very powerful argument" whose reasons the

Peoples’ Representatives cannot reveal publicly without serious legal

repercussions. Justifying one’s TPP vote on opaque national security

grounds will surely be easier than trying to justify the vote on

economic grounds, as Kind’s own situation illustrates.

 

Representative Kind’s plan for aiding economically distressed Wisconsin

dairy family farms in his district involves removing export barriers and

legalizing the immigrant work force that is the labor backbone of

mega-dairy Confined Animal Feed Operations (CAFOs). Although Kind is a

leading Democratic TPP supporter, the plan does not mention the TPP, as

one of his aides noted. If it were to mention the TPP, Representative

Kind would have to answer questions about the impact of increased TPP

dairy ingredient imports on low and plummeting U.S. raw milk prices. He

would have to answer, as IATP did recently, why TPP supporters want to

increase dairy ingredient imports when U.S. dairy processors are pouring

U.S. farmers’ raw milk into high-tech sewers. Since the main

beneficiaries of this dairy import scheme are convicted U.S. raw milk

price fixers, such as the Dairy Farmers of America and Dean Foods, the

better part of valor dictates that Representative Kind justify his vote

for the TPP on the basis of classified national security briefings.

 

On September 28, Secretary of State John Kerry asked, as if representing

the TPP’s other 11 prospective members, "If America won’t enter into

partnership with us on economic matters, why should we look to

Washington for guidance on political or security matters?" Secretary

Kerry’s ventriloquized question makes sense if you believe that the

United States has geopolitical and military security influence only to

the extent that it can use trade policy as a "soft power" tool to reward

or punish countries in President Obama’s "pivot to Asia."

 

But consider just some of the sources of that influence. The U.S.

military budget is larger than the next seven military budgets combined

(not counting the military budgets of U.S. intelligence agencies). The

National Security Agency is authorized to spy on 193 countries and 20

international organizations, as well as to report on the activities of

foreign corporations. Doesn’t the United States already control

sufficient sources of influence in political and security matters so

that prospective TPP "partners" would seek U.S. "guidance" regardless of

whether or not Congress approves the TPP? President Obama and his

successors will hardly need the TPP to order the intelligence agencies

to determine whether foreign corporate activities pose a present and

imminent danger to the United States or are stealing U.S. intellectual

property. Nevertheless, would-be foreign policy realists (ignoring the

prospective Latin American members of the TPP) contend that a successful

"pivot to Asia" turns on the approval of the TPP.

 

A recent article in Foreign Policy noted that

 

the pivot’s legacy ultimately will be determined by ratification of the

TPP. The 12-member free-trade pact, the first to include the world’s

second- and third-largest economies, is not just important for business.

As a high-standards agreement it has the potential to affect more than

just tariffs, reaching deep into member countries to create conformity

on labor, the environment, food safety, intellectual property,

cybersecurity, the digital economy, development, and other standards. If

China were to join the TPP, conformity with these clauses would have a

transformative strategic effect on the nature of the Chinese state.

Though a distant outcome at the moment, it is not implausible.

 

This kind of argument, however appealing to foreign policy hawks in its

idealism, is thoroughly implausible on a number of grounds. We outline

just three here.

 

The TPP is not a "high standards agreement." For example, the TPP

standard of scientific data and studies to be used in risk assessments

of food and agricultural products—"reasonably available and

relevant"—allows for a continuation of the widespread use of

Confidential Business Information claims to shield corporate science

from the higher standard of public and peer-scientific review.

 

The TPP proponents of "removing regulatory irritants to trade," such as

the U.S. Chamber of Commerce, are also attacking a broad array of U.S.

regulatory agency budgets and mandates through their congressional

allies. For example, Congress has refused to fund the Food Safety

Modernization Act adequately to implement its "higher standards,"

including those applying to imported food and agriculture products.

Industry has strongly opposed regulatory service user fees to compensate

for the federal budget shortfall. If the United States is not willing to

budget to implement and enforce standards, should we assume that other

TPP governments will do so?

 

China has no economic or strategic need to join the TPP and cannot be

geopolitically "contained" by its standards. The United States has been

negotiating a bilateral investment treaty with China since 2008 and may

conclude negotiations in 2017, so China will not need to comply with TPP

investment provisions. The United States has allowed Chinese state owned

companies to buy majority shares of the meat-processing mammoth

Smithfield, and the agricultural seeds and chemical company Syngenta,

following national security reviews and with no "transformative

strategic effects" resulting from the Chinese takeovers. China is

Australia’s number-one trading partner; New Zealand has had a free trade

agreement with China since 2008; Canada has announced its intention to

start FTA negotiations with China; Peru, Vietnam, and Chile are seeking

Chinese investment. None of these facts points to a China that will

comply with TPP rules that it has not negotiated.

 

In a rebuttal to Secretary Kerry’s geopolitical argument for passing the

TPP, Representative Sander Levin, the top Democrat on trade and

investment issues in the House of Representatives, said "An agreement

that is not in our economic interest cannot be in our national security

interest because our national security depends on our economic strength,

including in manufacturing." He warned the Obama administration not to

try to pass the TPP during the lame duck session. To do so would

intensify citizen opposition to what he called a "mindless approach that

assumes more trade is always better, no matter what its terms."

 

Among the issues Levin wants the next administration to re-negotiate is

the Investor State Dispute Settlement (ISDS) Mechanism, which allows

corporations and other investors, such as hedge funds, to sue

governments over regulatory actions perceived to impair anticipated

investor profits. The ISDS, which IATP opposes, is a one-way private

tribunal that provides governments with no recourse to sue investors for

cross-border regulatory evasion and harm to public, worker, and

environmental health caused by investor activities.

 

It’s important to detail exactly how U.S. trade and investment policy

substance and process should change, something IATP and many others are

developing now. But to give Levin’s proposals and those of others a

chance to become part of U.S. trade and investment policy, policy space

for them must be created by defeating the TPP.

 

Steve Suppan is a senior policy analyst at the Institute for Agriculture

and Trade Policy.

 

David Howell

 

What a line of crap. , We lost our industries power from trade deal and

agreements . Look at the steel mill and other plant , That have went

overseas . Rebuilt over there , knock – down here . We need to vote out

these lying misleading representative . That takes money over people .

Vote the incumbents out of office ..

 

--