TPP on the Side of Big Tobacco. Government on the side of people. >>> TPP vs. Governments

A smoke free country? Using the TPP as a method to circumvent national laws? Sound interesting? Well, let’s lay it out. This blog’s topic includes smoking, capitalists, the TPP, progressive governments; more or less a brawl between capitalists and socialists. A key provision in TPP states that products traded under TPP (and most all trade agreements under the WTO) must be able to be marketed and sold in the destination country unencumbered. Several governments, including Norway, Australia, and Uruguay are enacting laws coinciding with the planned introduction of the TPP which aim to reduce the appeal of cigarettes at a retail level. Governments must figure that if they cannot stem real social change in the minds of youth, they will instead simply enact a “censoring” equivalent. Let’s face facts: there are more non-smokers than smokers and primary smoking has been proven (Altria “Phillip Morris” would have you believe otherwise) to increase all sorts of health risks. (Secondhand) smoking is gross and is likely the majority opinion. As this is a blog, my personal opinion is that while I’d like so much to trash every cigarette in the whole world (and occasionally smoke a cigar) and carry a large fan around with me to clear a path of fresh air, I respect to a degree the rights of others to enjoy their nicotine infusion, albeit it gross and ailing to my personal health. As you can imagine, others feel this way too—across the world. Governments want to reduce their healthcare costs, maintain a healthier population and increase the quality of the air and life for all citizens.

As the aforementioned governments are mandating that cigarette manufacturers who export to their country use packaging to reduce the branding appeal of cigarettes (plain colors, simple or no logos, etc…) and ability to differentiate product lines, big tobacco is firing back. They claim that this violates their right to export under TPP as stated in the WTO TRIPS (Trade-Related Aspects of Intellectual Property Rights ) agreement:

The basic rule contained in Article 15 is that any sign, or any combination of signs, capable of distinguishing the goods and services of one undertaking from those of other undertakings, must be eligible for registration as a trademark, provided that it is visually perceptible. Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colours as well as any combination of such signs, must be eligible for registration as trademarks.[1]

For example, Dominican Republic, a potential entrant to the TPP, has a significant stake in cigarettes as rolled tobacco accounts for 4.5% of its total exports.[2] If half of that were suddenly stopped, the Dominican Republic would lose a significant amount of economic welfare until its economy adjusts. In the meantime, Altria would lose a significant amount of revenue by the action of the importing country. There is good cause for disagreement. And, in fact, this TRIPS provision allows industries to take up judicial battle (sue) governments who infringe upon their marketing rights. In 2010, Norway was sued by then Phillip Morris for this very reason under a different trade agreement. Phillip Morris, now Altria, has lost the case. Cigarettes will remain not visible in stores in Norway.[3]

Take, for example, Uruguay. Known as the “smoke free country,” it has smoking prohibitions as strict as Norway and Australia and other socially progressive countries. The difference is that it lies among many tobacco exporting countries. In Uruguay, it is unlawful to smoke in any private hotel and in all covered public spaces. It also mandates that 80% of all cigarette packages have health warnings and in August 2009, it extended laws to “limit brands to a single line of products[4]” (no “light” or “mild” flavor titles allowed on packaging.) This is the direction other countries are headed towards. Similar to the Coca-Cola brand, the brand of a cigarette or tobacco company is its most valuable asset among all tangibles and intangibles and so these laws could be destructive to big tobacco. Tobacco companies might have to start relying on other more expensive forms of advertising such as electronic and print media.


[4] Physicians for a Smoke Free Canada, “Philip Morris vs. Uruguay:

An Analysis of Tobacco Control Measures in the Context of International Investment Law”

Todd Weiler, 28 July 2010

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What we have here is an agreement (the TPP), like others, which lacks provisions for anything but capitalism, as exemplified in its provisions to protect all products, such as tobacco. We assume capitalism and (free) trade will increase output in the economics of all countries which trade. We revert to the “internal reallocation” principal as something which governments should be channeling change through. In this sense, we can say this is a failure of governments, or a common action by progressive ones, which begs the question: can social progressiveness coexist with capitalism? Indeed it does as we see in Norway among others. History teaches us that this issue can be resolved, like so many others. But the question remains, should the TPP include provisions in line with some government’s policy? Would a precedent in favor of tobacco force all other countries to forego their anti-smoking marketing laws? Could other industries be at risk? Holding constant the fact that we’re talking about tobacco here, the point of a trade agreement is to improve the economic welfare and ultimately the social welfare of a society. In this situation, it can be argued that the path to welfare diverges. But, is it right to limit the “expression” of a company to market their goods? After all, their brand is a large asset. What are the unbiased econometric projections for decreased tobacco sales in such restricting countries? Could the TPP be used as a conduit to allow lax restrictions in other countries to recapture the lost profits for tobacco in strict countries? As we see trade, has implications greater than price and output, and with little yet written or adjudicated on this topic, we are witnessing history. 

[3] Physicians for a Smoke Free Canada, “Philip Morris vs. Uruguay:

An Analysis of Tobacco Control Measures in the Context of International Investment Law”

Todd Weiler, 28 July 2010

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