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The magic of government and the legitimacy of international legal orders

In the comments section, Scott Lincicome refers to Lori Wallach’s piece in the HuffPo and apparently is ruffled by the tone.

If only you could see what Public Citizen’s membership and our allied organizations wanted us to publish! We were pretty restrained, and actually understating the political damage this ruling will have on the WTO’s long-term legitimacy.

The fact of the matter is that Public Citizen expended a decent amount of energy trying to lay out for the Appellate Body a way through this morass. We thought that (as a legal matter) there was a way that the lower panel ruling could be overturned and allow the institution to save face. In retrospect, I’m not exactly sure why we did this, because the tone deafness of the Appellate Body ruling is startling.

Scott also dislikes our characterization of the WTO ruling as an “order.”

The relevant passage of the HuffPo piece is: “The ruling, issued Wednesday, was on the final U.S. appeal which means that now the U.S. has 60 days to begin to implement the WTO's orders or face trade sanctions.” Some version of that formulation has appeared consistently in our publications throughout the years.

I could “order” Scott to take down his blog, but he would not need to comply with that “order.” At the other end of the spectrum is an “order” delivered at the barrel of a gun or by a vengeful Norse god, with which compliance is strongly advised.

Somewhere in between is that magical thing we call modern government. The Supreme Court doesn’t have an army, but non-acquiescence with its decisions is rare, because elites believe that the benefits in social order (the other kind of "order") outweigh the costs to complying with disagreeable decisions. The Court in turn exercises (typically) great deference to the political bodies, or it becomes politicized and sees its legitimacy damaged.

Likewise, a WTO “order” backed by the threat of trade sanctions is as close to forced compliance as it gets in international law at peacetime. (The Bank of International Settlements or UN human rights agencies don’t have powers like this.) On the spectrum of meaningfulness of “orders,” the WTO is substantially closer on the spectrum to what modern governments do than my order to Scott to abort his blog. Indeed, by triggering political economic consequences, the WTO agreements create automatic constituencies for compliance, in addition to those that think complying with WTO panels is good per se.

The WTO Appellate Body, just like our own domestic Supreme Court discovered in the New Deal era, cannot be blind to how its rulings actually play out in the real world if it hopes to retain its authority.

In this case, I think we’ve laid out pretty well the politics behind the FSPTCA – a menthol ban is unlikely to happen (not because California Democrats want to protect tobacco industry jobs but because of reasonable regulatory distinctions). However, a roll back of a ban on cloves might happen if the administration doesn't stick to its guns.

Those politics are unlikely to change, and the WTO doesn’t require them to in order to begin compliance proceedings.

If, as a practical matter, the only way that U.S. could comply would be exempting imports from incremental regulatory schemes (and thus, yes, leading to more teenage experimentation with cigarettes than would be true with the FSPTCA whole and intact), then the TBT Article 2.1 ruling becomes the same as an order backed by trade sanctions to eliminate or water down the flavored cigarette ban now in place. Presumably, when some U.S. industries are hit by trade sanctions, the demands for watering down the FSPTCA will grow, increasing the likelihood of that outcome over time.

If the AB is going to get in the habit of putting countries’ backs against the wall on sensitive matters of public health, you’re going to see a lot more demands for non-compliance and non-payment of compensation. My question for the WTO’s supporters is how that state of affairs advances your goals.

Again, we were genuinely surprised by the AB’s ruling. We thought that the public interest stakes were very clear (as they were in EC-Asbestos), and that the AB would find some grounds for overturning the lower panel ruling (say on likeness) and thus allowing the institution to save face.

The fact that they were unable to act in self-preservation (and made a political decision that now is having predictable political consequences) is a bad sign for those that hope to see the WTO remain a legitimate force in global affairs.

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Korean Supreme Court urges renegotiation of investor-state clause; expresses concerns of “extreme legal chaos”

An English language Korean newspaper broke some startling news earlier this week. See the full story here.

In 2006, the Supreme Court in Korea submitted an opinion to the government recommending a renegotiation of the investor-state clause, citing concerns that the dispute system could lead to “extreme legal chaos” resulting from increased arbitration requests from U.S. investors.

Five years (and a negotiated trade deal) later, the court’s request has finally been disclosed.

The document warns against problems of sovereignty infringement, extreme investor rights, and legal instability. It also notes that “whether or not to introduce an investor-state dispute system is a decision to be made after the sufficient gathering of opinions from the South Korean public.”
(See here for more on that.) Apparently, one of the bases for their concern was a NAFTA case brought against the U.S., which we detail here.

And according to the article,

The South Korean government announced that it would be renegotiating investment-related provisions in the KORUS FTA with the US within 90 days of its effective date of Mar. 15. It has had a task force working since March on a negotiation draft.

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Will DIOCOSEFLRD save tobacco rules from the WTO?

The WTO ruling against U.S. measures to reduce teen smoking continues to make waves, with folks like Daniel Ikenson, Scott Lincicome, and my old trade professor Steve Suranovic weighing in - mostly with straw man arguments or the straight libertarian push for less regulation. These are probably not the folks that have a lot invested in maintaining the Family Smoking Prevention and Tobacco Control Act (FSPTCA) to begin with.

We've laid out the essential timeline issues with compliance here. One of the more novel arguments for compliance comes from trade lawyer Rob Howse, who has commented on the issue at IELP here, here and here. In addition to recommending an extention of the FSPTCA's ban to menthol (which I've said is likely to be politically difficult if not impossible), Rob has suggested that the U.S. could comply by making a better case that the exclusion of menthol from the ban is justified. Towards this end, Rob advanced a novel interpretation of Article 21.5 of the WTO's Dispute Settlement Understanding (DSU), which reads:

“Where there is disagreement as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings such dispute shall be decided through recourse to these dispute settlement procedures, including wherever possible resort to the original panel. The panel shall circulate its report within 90 days after the date of referral of the matter to it.  When the panel considers that it cannot provide its report within this time frame, it shall inform the DSB [Dispute Settlement Body] in writing of the reasons for the delay together with an estimate of the period within which it will submit its report.”

Rob seems to be saying that, while an Article 21.5 compliance panel could not overturn the AB’s ruling, it might be able to deem that the U.S. is acting consistently with the ruling if it had more data and studies justifying the U.S. approach.

There is a debate as to the legal merits of this argument, but it seems unlikely that the same panel that ruled against the FSPTCA once would think differently a second time around.

Continue reading "Will DIOCOSEFLRD save tobacco rules from the WTO?" »

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Betting against Obama? The WTO may have something to say about that.

Ben Protess wrote in the NYT a few weeks ago about a new effort following from the Dodd-Frank financial overhaul legislation:

The Commodity Futures Trading Commission is poised this week to reject plans for so-called political event contracts, a lucrative derivative deal that would allow firms to wager on Congressional races as well as the presidential battle, the people briefed on the matter said...

[the The North American Derivatives Exchange,] which currently is a marketplace for derivative contracts tied to commodities and stock market indexes, wanted to offer five basic contracts. One contract allows traders to wager that President Obama will win another four years in the White House. Other contracts say that either Democrats or Republicans will control the Senate or House...

Some states explicitly outlaw gambling on elections. Even in Las Vegas, the epicenter of gambling, betting on elections is off limits, regulators say.

Intrade is the most prominent player in the world of trading political event contracts, but it is based in Ireland. It is unclear whether American law applies to Intrade.

Only academics have escaped the strict rule. For two decades, United States regulators have allowed business students at the University of Iowa to operate an electronic exchange for trading political contracts.

The basis for the CFTC decision can be found in this CFTC order, which details the statutes and regulations that lead it to rule that NADEX is against the public interest. it's also worth pointing out that Nadex - despite the homegrown sounding name - is a subsidiary of a European financial services group.

The question we like to ask often at EOT is how might the under-studied, underappreciated rules of the World Trade Organization (WTO) and other trade rules relate to this legitimate political event regulation?

Continue reading "Betting against Obama? The WTO may have something to say about that." »

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Announcement of Flawed 2012 Model BIT Shows Agenda Motivating Obama TPP Talks

The Obama administration released the 2012 Model Bilateral Investment Treaty this morning. Here's our response:

Announcement of Flawed Investment Rules Show Agenda Motivating Obama Trade Talks

Statement of Lori Wallach, Public Citizen

Instead of the reforms promised by  candidate Obama, the Obama administration’s ‘new’ Model Bilateral Investment Treaty released today is the same in all major respects as the deeply flawed ‘old’ Model Bilateral Investment Treaty (BIT) and the investment chapters of U.S. free trade agreements.
Like the old U.S. investment model, the new text will allow companies to challenge public interest regulations outside of domestic court systems  before  tribunals of three private sector trade attorneys operating under minimal to no conflict of interest rules. These arbitrators can order governments to pay corporations unlimited taxpayer-funded compensation for having to comply with policies that affect their future expected profits, and with which domestic investors have to comply.
By revealing a fundamentally unchanged BIT (after pushing three Bush trade deals in 2011 based on the same flawed model), the administration is exposing the anti-public interest agenda motivating the nine-nation Trans-Pacific Partnership trade talks. In those negotiations, countries like Australia (who have been attacked in BITs by Philip Morris over their plain packaging tobacco policies) have criticized the U.S. model of investment rules.
At a time when multinationals like Chevron are using BITs to evade justice and get out of environmental remediation obligations, it is unthinkable that an Obama administration – post BP oil spill, post Wall Street crash – would privilege the rich at the expense of the 99 percent.

For those wishing to see a track changes version of the little that changed in the 2012 Model BIT relative to the 2004 Model BIT, along with some commentary of the shortcomings of both, click here.

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Illegal log trade flourishes under U.S.-Peru trade deal

Our colleagues over at the Environmental Investigation Agency have just published a comprehensive study in the trade in illegal logging certificates in Peru in the years since the US-Peru FTA was signed. As they write:

By crossing public information on (a) the “supervision” inspections conducted by the Supervisory Body for Forest Resources and Wildlife (OSINFOR for its Spanish initials) on a series of timber concessions with (b) the documentation for CITES export permits for cedar and mahogany, EIA identified more than 100 shipments containing illegally logged CITES wood that were exported to the US between January 2008 and May 2010 – that is, more than 35% of all such shipments with CITES permits that left Peru for the US during this period.

Peru’s primary exporter, Maderera Bozovich, exported shipments under 152 CITES permits during this time, at least 45% of which included wood of illegal origin. It is likely that more supervisions in the field would discover that these percentages are actually higher.

The FTA contained a new Annex on Forest Sector Governance, which was put in place because Peru was (at the time of negotiations on the deal) one of the world's primary sources of cedar, mahogany and other endangered species. (Longtime Eyes on Trade readers will recall that the forestry annex was a major reason cited by key Democrats for their support of an otherwise fundamentally flawed trade deal, back when a minority of Democrats joined with a majority of Republicans to pass the deal back in 2007.) A provision of the annex reads that Peru is obligated to:

"Provide criminal and civil liability at adequate deterrent levels for actions that impede or undermine the sustainable management of Peru’s forest resources. Such actions shall include:

(i) Threats or violence against, or other intimidation of, government personnel engaged in enforcement of Peru’s laws, regulations and other measures relating to the harvest of, and trade in, timber products;
(ii) Knowingly creating, using, presenting or providing false information on any material document relating to enforcement of Peru’s laws, regulations and other measures relating to the harvest of, and trade in, timber products, including forest management plans, annual operating plans, applications for permits/concessions, and transportation documents;
(iii) Obstructing an investigation, verification, or audit conducted by government personnel engaged in enforcement of Peru’s laws, regulations and other measures relating to the harvest of, and trade in, timber products;
(iv) Knowingly harvesting or purchasing timber or timber products from areas or persons not authorized under Peruvian law; or knowingly transporting timber or timber products taken from areas or persons not authorized under Peruvian law; and
(v) Providing to a government official, or receiving as a government official, compensation, whether monetary or in kind, in exchange for particular action taken in the course of that official’s enforcement of Peru’s laws, regulations and other measures relating to the harvest of, and trade in, timber products."

While there is no statistical evidence that trade in endangered timber has increased, or that deforestation has increased, EIA is concerned (as I understand it) that the lack of accountability represented by the forged documents that do not line up to the actual origin of the trees sold and exported from 2008-10 could be an indication of deeper forestry abuses beneath the statistical surface or down the line. They're calling on the Obama administration to audit Peru's forestry practices, as a first step that could lead to actual retaliation under the FTA.

The FTA has been a fundamentally disruptive force in Peruvian life, disrupting presidential elections and now offering U.S. multinationals with tools to evade justice and environmental clean-up responsibilities. See this excellent report by the Sunlight Foundation's Keenan Steiner for more on this latter point, which makes mention of our March 2012 report on a recent so-called investor-state case under the U.S.-Peru FTA. The Obama administration is set to lock in and expand these rules under the Trans-Pacific Partnership trade deal, which both Peru and the US are in and which is also supported by presumptive GOP candidate Mitt Romney.

The significance of the EIA reports (you can check out EIA's 2010 study on the same topic) is that the best part of the FTA (the forestry sector annex) is delivering more information and attention to forestry, but has not yet led to fundamental change on the ground. To deliver that change, we'll have to see actual enforcement. Now, the ball's in Obama's (or Romney's) court. Will they deliver?

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Brazil's flavored cigarette ban now targeted

Unless you're an avid reader of Spanish and Portuguese language news wires, you probably missed Brazil's announcement last month of a ban on all flavored cigarettes: cloves, chocolates, and even menthols. Both importers and domestic firms are subject to the same limits.

Here's the announcement in Portuguese, and some of the earlier history from February, including the draft. The text of the final Brazilian measure reads (rough tranaslation courtesy of Google translate):

Continue reading "Brazil's flavored cigarette ban now targeted" »

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Statement in Response to Obama’s Implementation of Colombia Free Trade Agreement (FTA)

Statement of Lori Wallach, director of Public Citizen’s Global trade Watch:

Given the number of unionists murdered in Colombia has increased every year since the trade deal was signed and the same labor violations that led candidate Obama to oppose the deal remain it is obscene that he has certified that conditions have improved and thus the trade deal is ready to go into effect. Since 1986 nearly 3,000 union activists have been killed in the country, the rate jumped to 48 last year.

Obama’s actions kill any leverage the U.S. had to stop the violence against union organizers and sends the wrong message about the human rights situation in Colombia which makes this so-called “trade deal,” which is really nothing more than special perks for big business that will harm most people in both countries, doubly damaging.

In 2008, candidate Obama made his opposition to the Colombia FTA clear, saying he opposed the deal, “because the violence against unions in Colombia would make a mockery of the very labor protections that we have insisted be included in these kinds of agreements.”  That violence has not stopped. Instead, President Obama has changed his position.

 The politics of Obama’s action with this trade deal are totally inexplicable given this is not just another NAFTA, which polling shows most American despise, but one with the country that is globally notorious for murdering unionists and a deal that was passionately despised by the very union voters on whom Obama will rely to win key swing states and volunteer for the vaunted Obama campaign ground game.

In 2008 candidate Obama also said, “I realize that changing your position to suit the politics of the moment might be smart campaign tactics but isn't the kind of strong, principled leadership America needs right now.” I am sure that after the President’s actions this weekend announcing that the same terrible labor conditions in Colombia are suddenly ok and pushing implementation of another NAFTA-style trade agreement leaves many Americans wishing that President Obama behaved more like candidate Obama.

The agreement allows corporations from anywhere around the world with offices in Colombia and the U.S. to challenge U.S. or Colombian public interest regulations and laws before a secret tribunal of three commercial lawyers to demand the laws are dumped and tax payer dollars are paid in compensation.


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Sweet surrender?

Over the last few posts (see here and here), we’ve explained the two major findings in the recent WTO ruling against U.S. efforts to reduce teen smoking.

The question inevitably becomes: what happens next?

There is a strong presumption under the WTO’s Dispute Settlement Understanding (DSU) that the U.S. will begin to remove the ban on clove cigarettes in 60 days, i.e. early June 2012. In this particular case, I wouldn’t be surprised if the WTO urged compliance by August 2012, right in the middle of the U.S. election season. But the outer bound for compliance is likely to be July 2013, or 15 months from the date of adoption of the Appellate Body report.

More details after the jump.

Continue reading "Sweet surrender?" »

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More Tumult at the TPP: Secret Negotiations Against Internet Freedom Continue this Week in Chile; Big Pharma Allies Attempt to Shut Down Critics’ Event (Again)

Talks on the Trans-Pacific Partnership Agreement (TPP), which the U.S. is negotiating with Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, are continuing this week (April 9-13) in Santiago, Chile in the form of an “intersessional meeting” on intellectual property (IP) – focusing on internet policy. The last time such a meeting was convened on IP in January in Hollywood, a stakeholder event organized by public interest groups in the same hotel as the negotiations was cancelled after the hotel received pressure from the Office of the United States Trade Representative (USTR). Simultaneously, USTR made sure the Motion Picture Association of America (MPAA) had access to negotiators, as they were given an exclusive tour of 20th Century Fox Studios guided by a representative of the studio’s government relations office.

USTR is clamping down on public participation to minimize the spread of information which challenges their hardline IP maximalist agenda. In addition to increasing reliance on intersessionals, like this week’s Santiago meeting, where stakeholders are not given a forum to participate, USTR has now effectively reduced stakeholder participation in the official negotiating rounds by eliminating their opportunity to give presentations to negotiators in an official forum. USTR’s response signals the substantial impact critics of the TPP are having. At the March negotiating round in Melbourne, one stakeholder presentation after another criticized USTR’s aggressive pro-Big Pharma patent proposal, filling most of the afternoon. Now TPP countries are resisting USTR demands that would imperil their access to medicines.

Cozy relationships with government aren’t the only way corporations are influencing these talks. This week, American University and the University of Chile arranged to host an event to present analyses critical of particular proposals in the TPP. These include leaked provisions that would greatly favor Big Pharma, expand drug monopolies and raise medicine prices. The keynote speaker was to be Senator Ricardo Lagos, a major political figure in Chile considered to be a possible candidate for the Presidency. Nevertheless, the public University of Chile law school canceled the event on less than two days’ notice, evidently on the advice of a member of the faculty who is a paid advisor of the multinational pharmaceutical companies’ association in Chile (the Cámara de Industria Farmacéutica, or CIF).

The cancellation sent organizers scrambling for a new venue, which they found in Chile’s Catholic University.

Stakeholders from a spectrum of communities concerned with the implications of the TPP are continuing to shine light on the negotiations. Criticism of the TPP process is mounting from members of both state and federal government in the United States. Internet activists in Chile are calling on their government to defend the rights of their citizens from what could be the next SOPA, while analyses from academic experts on IP show that the U.S.-proposed TPP provisions go beyond those seen in ACTA. Meanwhile, USTR claims that allowing 600 corporate advisors to examine the negotiating text, including representatives of the Recording Industry Association of America (RIAA) and the Entertainment Software Association (ESA), while keeping it hidden from the general public justifies their claim of “unprecedented” transparency in the negotiations.

SOPA proved that the netroots can beat IP maximalism and rulemakings from Washington designed to curb internet freedom, while the populist response to ACTA has shown that policy laundering attempts by industry and their allies in government will face serious resistance. Ambitious, secret economic agreements have been defeated before through public awareness and organizing. Now it’s time to stand up and tell our governments we will not stand idly by while our rights are under siege.

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Obama poised to give presidential seal of approval to gross labor rights violations in Colombia

Dan Kovalik, a human rights attorney for the United Steelworkers and Gimena Sanchez-Garzoli and Anthony Dest of the Washington Office on Latin America write in a Colombia Reports op-ed: "Obama poised to give presidential seal of approval to gross labor rights violations in Colombia".

"U.S. President Barack Obama is expected to announce that Colombia is complying with the labor rights conditions that were set for a free trade agreement between Bogota to take effect. This approval will only perpetuate the ongoing labor rights violations.

On November 9, 2011, the family of Juan Carlos Galvis – a prominent union leader with Sinaltrainal and personal friend of ours – was subjected to a violent home invasion by two presumed paramilitaries. The intruders entered the Galvis home while Juan Carlos and his son were away and assaulted his wife, Mary, and his two daughters, Jackeline and Mayra. They grabbed Mayra, a child with Downs Syndrome, and put a gun to her head, threatening to kill her if Mary did not tell them the whereabouts of Juan Carlos and his son. They then bound and gagged Mary and Jackeline, again asking them to say where Juan Carlos and his son were. The assailants then proceeded to spray paint Mary and Juan’s faces on a wedding photo the family had posted on the wall. Before leaving the home, they stole two laptops, some USB memory drives, documents, and trashed the house. The traumatic attack left Mayra in shock for days and unable to speak.

The family was forced to flee to another town where they are now hiding. Their fears are well founded. Two of Juan Carlos’ Sinaltrainal colleagues, John Fredy Carmona Bermudez and Luis Medardo Prens Vallejo, were killed in recent months.

All in all, 30 unionists were killed in Colombia last year. The National Labor School (ENS) reports that four have already been killed this year, and other trade union movements have reported additional murders (e.g., Justice for Colombia has reported six). Such killings have made Colombia, where around 3,000 unionists have been killed since 1986, the most dangerous country in the world to be a trade unionist, and if the assassination rate this year continues as it has thus far, Colombia will most certainly retain this notorious distinction.

Meanwhile, the Colombian government has done nothing effective to prosecute those responsible for such anti-union violence, with the UN recently reporting that Colombia’s rate of impunity for such crimes remains at 95% – meaning that only 5% of the union killings have ever been successfully prosecuted.

It was these two factors – the unprecedented rate of union killings and the high rate of impunity for these killings – that led Barack Obama in 2008 to declare in his third debate with John McCain that he opposed the Colombia Free Trade Agreement (FTA)."

Read the rest of the op-ed here.



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Representatives from communities attacked by investor-state cases speak to Congress

Public Citizen and Oxfam America, in cooperation Congresswoman Linda Sánchez and Congressman Raúl Grijalva, sponsored a briefing on March 28, 2012, where congressional staff and allies heard from the former ViceMinister of the Environment of Peru, an environmental leader from El Salvador, and legal experts about how investor-state provisions are being used by corporations to evade environmental and human rights obligations.

Panelists were: José de Echave, former ViceMinister of Environment, Peru; Luís Gonzaléz, Unidad Ecológica de El Salvador; Lori Wallach, Public Citizen’s Global Trade Watch Division; Marco Simons, Earth Rights International. Watch their compelling testimony.

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U.S. Abandons Final Pretense of Transparency or Inclusion of Consumer, Health, Environmental, Labor Perspective in Trans-Pacific Partnership (TPP) Talks

WASHINGTON D.C. – U.S. trade officials have quietly cut stakeholder presentations from the next set of Trans-Pacific Partnership (TPP) agreement negotiations, eliminating the last pretense that the process of the talks is transparent and inclusive and sending a message that only the views of the 600 official corporate trade advisors provided special access to the talks will be reflected in the final deal, Public Citizen said today. At previous TPP negotiating rounds, a day was set aside for civil society groups and others with concerns about the TPP to make presentations to negotiators.

“The message is clear: From now on, not only will the talks remain behind closed doors, but all pretense of consideration of consumer safety, health, environmental or labor concerns has been thrown out in favor of ensuring that the damning record of past U.S. trade pacts use of the same terms being pushed by the U.S. for TPP are not brought into the discussion,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

“The stakeholder presentations were the last vestige of transparency in these TPP talks,” Wallach said. “Many negotiators from other countries have told me that the stakeholder process was very valuable because it provided detailed information on the problems caused by past U.S. trade agreements (and on how they have actually worked) that was not generally available and certainly not being shared by U.S. negotiators, who generally have promoted positions promoted by industry interests.”

                Indeed, the U.S. Chamber of Commerce recently noted on its website that it had “led the business community’s advocacy for U.S. negotiators to include strong disciplines in the TPP trade agreement on intellectual property and path-breaking new rules on regulatory coherence, due process in antitrust enforcement and state-owned enterprises. In these and other areas, U.S. negotiators have proposed negotiating text that hews close to the chamber’s recommendations.”

Public Citizen earlier this month joined with other public interest groups from the nine TPP countries to demand that the draft TPP text be released. Negotiating texts for past deals have been released, such as for the Free Trade Area of the Americas in 2001. Currently, more than 600 official corporate trade advisors have access – to which the press and public are denied. Indeed, TPP countries signed an agreement in 2010 to not release negotiating texts until four years after a deal is completed or negotiations abandoned.

To date, U.S. Trade Representative (USTR) Ron Kirk has refused to release any draft TPP text, despite repeated calls from civil society groups for more than a year. U.S. Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee’s Subcommittee on Trade, has led congressional efforts to make the process more transparent. Wyden told Oregon Live, “When international accords, like ACTA, are conceived and constructed under a cloak of secrecy, it is hard to argue that they represent the broad interests of the general public.”

“USTR’s response to the request by civil society groups and Sen. Wyden to see draft texts of a massive agreement that will rewrite wide swaths of U.S. non-trade law has been to slam the door shut, instead of opening up the process and making it more transparent,” said Wallach.

The fallout from the U.S. decision already has begun. In response, New Zealand civil society groups have called on their government to “pull the plug” and walk away from the TPP talks. The TPP negotiations cover issues ranging from banning Buy America policies, to curbing Internet freedom, to providing offshoring incentives and special rights for corporations to attack U.S. laws in foreign tribunals.

“You can only assume that the TPP would not survive the light of day, and that is why the U.S. public is being denied access to details and now civil society groups are being sidelined,” Wallach said. “The Obama administration declares itself the most transparent administration ever, and President Barack Obama campaigned on transparency in government. It’s time he put those words into action.” The next round of TPP talks will take place May 8-18 at the InterContinental Dallas hotel in Addison, Texas.                                                               


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Cancer prevention three months too soon

Welcome to Week Two following the WTO’s cancerous decision to rule against the U.S. measures to reduce teen smoking. As Rep. Henry Waxman (D-Calif.) said:

I am deeply disappointed in the WTO’s decision in the clove cigarette case, which has serious public health implications for United States efforts to reduce youth smoking.

The Family Smoking Prevention and Tobacco Control Act gave the FDA broad authority to protect the public’s health. It also directed immediate action to reduce youth tobacco use, including a ban on clove and candied-flavored cigarettes. Importantly, the law made no distinction in where a cigarette is manufactured because a cigarette -- no matter where it is made -- is addictive and deadly. I believe the WTO’s interpretation is wrong on the merits and wrong in its interference with our efforts to protect the American public from tobacco’s devastating effects.

I am committed to working with the Administration to advance our shared goal of ending the tobacco epidemic among our young people and ensuring that the U.S. ban on clove and candied-flavored cigarettes remains in place.

This is an encouraging sign that legislators may be heeding the call of thousands of Americans who have taken action under the Consumer Pledge urging principled non-compliance with the ruling.

We went over the main part of the decision – rendered by the Appellate Body’s three-person panel of Peter Van den Bossche (Belgium), Ricardo Ramirez-Hernandez (Mexico) and Shotaro Oshima (Japan) – in last week’s post. As we noted, this is the first time that the WTO has found a violation of the Agreement on Technical Barriers to Trade (TBT) Article 2.1.

But there was one major aspect of the ruling that we didn’t get to discuss: the finding that the U.S. violated TBT rules by having the sweet tobacco ban (enacted in July 2009) go into place on September 2009 rather than December 2009. In other words, the WTO found that the U.S. began fighting cancer three months too soon.

Continue reading "Cancer prevention three months too soon" »

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Lori Wallach in the Huffington Post: WTO Orders U.S. to Dump Landmark Obama Youth Anti-Smoking Law

A landmark U.S. health policy already was being struck down even as protestors surrounded the Supreme Court over the attack on President Obama's healthcare law. Behind closed doors in Geneva, a World Trade Organization (WTO) tribunal issued a final ruling ordering the U.S. to dump a landmark 2009 youth anti-smoking law.

The Obama administration's key health care achievement slammed by the WTO was the Family Smoking Prevention and Tobacco Control Act (FSPTCA), sponsored by Rep. Henry Waxman (D-Calif.). The ruling, issued Wednesday, was on the final U.S. appeal which means that now the U.S. has 60 days to begin to implement the WTO's orders or face trade sanctions.

This outrageous WTO ruling should be a wake up call. Increasingly "trade" agreements are being used to undo important domestic consumer, environmental and health policies. Instead, the Obama administration has intensified its efforts to expand these very rules in a massive Trans-Pacific Partnership (TPP) "free trade" agreement.

The WTO's ruling against banning the sale of flavored cigarettes isn't the only example of its attack on consumer protection and health laws. The U.S. has filed WTO appeals on two other U.S. consumer laws -- U.S. country-of-origin meat labels and the U.S. dolphin-safe tuna label -- both were slammed by lower WTO tribunals in the past six months. Yup, in short order we could see the WTO hating on Flipper, feeding us mystery meat and getting our kids addicted to smoking.

Read the rest here.

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On Tobacco Appeal Ruling, WTO Shows its Anti-Health Stripes

We’ve done a quick read through of today’s World Trade Organization (WTO) Appellate Body ruling against the U.S. measures to reduce teen smoking. (For our statement, see here, and for a more detailed background into the lower panel ruling, see our analysis here.)

This is a landmark ruling against one of the few policy achievements of the Obama administration: Rep. Henry Waxman’s (C-Calif.) Family Smoking Prevention and Tobacco Control Act (FSPTCA), which included a targeted measure to reduce teen smoking by targeting “starter flavorings” in cigarettes – like cola, chocolate, strawberry and clove.

The FSPTCA also contemplated an eventual ban on menthol cigarettes, but deferred this for further study. The reason? Not protectionism, nor arbitrary decision making. The reason was because – as we learned with the Prohibition Era with alcohol – banning products consumed by large numbers of adults can create a black market and upsurge in crime if not handled appropriately. Oh, and lest we think that the consumer protection lion Waxman went soft, it was also because the U.S. Supreme Court struck down previous federal tobacco legislation for exactly this reason.

So, wisely, the Waxman bill took a targeted and incremental approach.

But as we pointed out on the blog last September, the key flaw in the WTO’s analysis on whether the FSPTCA discriminated against Indonesian clove cigarettes was that it compared the treatment the FSPCTA gave to cloves and menthol, rather than comparing cloves to cola and other flavors. One of these things – menthol – is not like the other, as Big Bird from Sesame Street might have said. (See killer Big Bird video "app" here.)

The Appellate Body not only did not overturn this aspect of the September 2011 lower panel ruling – it doubled down. Indeed, it seems that the Appellate Body was almost determined to show how poorly suited the WTO is to considering matters of public health. In several key respects, the Appellate Body ruling was even more anti-health than the lower panel ruling.

Continue reading "On Tobacco Appeal Ruling, WTO Shows its Anti-Health Stripes" »

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Public Citizen Condemns WTO Attack on U.S. Efforts to Reduce Teen Smoking

 In Final Appeals Ruling, Global Commerce Agency Orders U.S. to Drop, Change Landmark Obama Youth Anti-Smoking Law

WASHINGTON D.C. – The World Trade Organization’s (WTO) final ruling today against U.S. efforts to reduce teen smoking shows that our current trade regime is simply incompatible with basic public health regulation, Public Citizen said. With today’s ruling, the WTO Appellate Body has now ordered the U.S. to water down or get rid of a key plank of its landmark Family Smoking Prevention and Tobacco Control Act of 2009 (FSPTCA), one of the few policy achievements of the Obama administration’s first term. The act banned sale of candy and other sweet-flavored cigarettes used to attract children to smoking.

“The Obama administration and Congress must not bow to yet another ruling from a so-called trade agreement tribunal demanding that the U.S. get rid of yet another important health or environmental policy,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “The Obama administration must stand with the thousands of Americans who have signed a Consumer Rights Pledge calling on the U.S. to not comply with these illegitimate trade pact rulings and to stop the Trans-Pacific Partnership (TPP) trade negotiations that would greatly intensify this problem.

“Countries should not be weakening their public health laws to comply with the anti-health, anti-environmental WTO rules. This case underscores why countries must insist that WTO rules be altered and that no new agreements use the same corporate backdoor deregulation model,” said Wallach. “If there is any silver lining to today’s ruling, it is that it will confirm the views of growing numbers of consumers, citizens and governments that the WTO must be shrunk or sunk.”

The Obama administration is considering expanding some of these anti-consumer rules in the first trade deal it is negotiating – the nine-nation TPP. This latest WTO ruling, along with two others in 2011 against country-of-origin labels on meat and dolphin-safe labels on tuna, show that a new approach to trade policy is needed – one that puts consumers, the environment and communities first, said Public Citizen.



The WTO Appellate Body’s decision today upheld the major conclusions of a September 2011 WTO ruling from a panel of three diplomats from Costa Rica, Japan and Uruguay, who ruled that the U.S. ban on sweet-flavored cigarettes (which are used to entice teenagers into smoking) violated a never-before interpreted provision of the WTO’s Agreement on Technical Barriers to Trade (TBT). Public health experts have concluded that these narrowly targeted bans help stop smoking before it starts.

But the panel reasoned that the ban discriminated against Indonesian clove cigarettes, even though both U.S. and foreign tobacco companies were prohibited from selling clove cigarettes in the U.S., and even though other sweet flavors like chocolate and cola also were banned. In its WTO attack on the FSPTCA, Indonesia successfully argued that the ban as it applied to clove cigarettes violated the WTO TBT rules because the U.S. did not ban all flavored cigarettes (menthol-flavored cigarettes were exempted from the ban).  

While the FSPTCA actually does contemplate extending the ban to menthol cigarettes, U.S. lawmakers advocated for a gradual approach to menthols, which are smoked (unlike other sweet cigarettes) primarily by adults. Policymakers had concerns that banning cigarettes primarily smoked by adults would have created dangerous black market activities and would not target teenage smoking. The WTO panel and Appellate Body gave little weight to these science-backed arguments and effectively concluded that imports have to be carved out from nations’ regulatory schemes.

Of nearly 200 rulings in 16 years, this was the first time that the WTO ever found a violation under this WTO provision, which has long been of concern to consumer advocates, given the threat that it could be interpreted in the all-encompassing way that it was in this final ruling. Today’s was one of the first rulings under the TBT, which is one of 17 agreements administered by the WTO.



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As Secretive Trade Negotiations Resume in LA, Public Interest Groups Demand Transparency

LOS ANGELES, Calif. — As trade negotiators from throughout the Pacific Rim meet in Los Angeles this week for talks aimed at moving the Trans-Pacific Partnership Free Trade Agreement (TPP) towards a rapid completion, labor, environmental and consumer advocates demanded that negotiating proposals be made available for public review and comment. 

“Americans deserve the right to know what U.S. negotiators have been proposing in our names,” said Tim Robertson, director of the California Fair Trade Coalition.  “This is the third year of serious negotiations on a pact that’s supposed set the standard for international trade and investment across the globe.  It’s outrageous that the public hasn’t been told what our representatives are negotiating for and what domestic policies they are giving away.”

The TPP is soon entering its twelfth major round of negotiations between the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, and is explicitly intended as a “docking agreement” that other nations will join over time.  Canada, Japan and Mexico have already indicated their interest in doing so.  U.S. negotiators are pushing for the completion of the TPP negotiations this year. 

The U.S. has reportedly introduced text for most, if not all, of an estimated 26 separate TPP chapters covering everything from our environment to financial regulations, drug patents to public procurement.  While approximately 600 corporate lobbyists and a handful of others have been given “cleared advisor” status enabling them to review and comment on these proposals, the general public has not been allowed to do so.  This is a far less transparent negotiating process than many other international agreements, including those at the World Trade Organization, where draft negotiating texts are published online. 

“On the table in these talks are critical issues related to the rights of workers, climate change, biodiversity and our global economy.  It is crucially important that there is transparency around what is being negotiated and time for open debate and public participation,” said Ilana Solomon, trade representative with the Sierra Club.

TPP negotiations in Los Angeles are occurring from April 1 to 4 on labor, environmental and government procurement provisions.  What information is available on U.S. proposals comes primarily from a small handful of leaked documents and conversations with negotiators from other countries. 

“If U.S. negotiators get their way, the public will be barred from reviewing any proposals until the negotiations are over, at which point it will be virtually impossible to make any substantive changes,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.  “That’s a bad way of making public policy, to say the least.  Frankly, it reinforces the worst public perceptions about government working behind-closed-doors with moneyed interests at the expense of the general public.” 


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Public Citizen Applauds President Obama's Decision to Finally Release Draft Trans-Pacific Partnership (TPP) Trade Agreement Text Over Objections Of U.S. Trade Representative Vlad von Dracula

 WASHINGTON:  Today President Obama removed a mortifying blot from his claim of having the most transparent administration ever by releasing the draft text of a massive regional trade agreement now in its third year of negotiations that will affect wide swaths of U.S. federal and state non-trade policy, said Public Citizen.

"We thought the secrecy could not get worse than when the previous U.S. Trade Representative (USTR) Ron Kirk actually admitted under Senate Finance Committee questioning in March that he would not release the TPP text because doing so would ensure he could never complete the deal," said Public Citizen's Sunshine Isthebest. “Then the new USTR, Vlad von Dracula, announced that not only would the text never be made public until the deal was set in stone and unchangeable, but that negotiations could no longer be conducted during daylight hours to minimize the chance that those who will live with the results could get a peek.”

Although draft trade agreements have been made public by negotiating governments in the past, including the last major regional trade deal the Free Trade Area of the Americas, and the World Trade Organization posts draft negotiating texts, the TPP text has been kept secret. Indeed, in a special TPP secrecy agreement signed in 2010, the Obama administration agreed for the first time in trade pact history to keep negotiating texts secret for four year after a deal was signed or abandoned. Only 600 corporate representatives serving as officials U.S. trade advisors and officials of the 8 other TPP governments have had access to the texts, which is to say everyone but the U.S. public, press and most in Congress.



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