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The TTIPing point: TTIP Versus Cigarette Legislation

MPs have voted by a majority of 254 to strip branding from cigarette packaging. A progressive move to tackle the root of the problem; children and teens are of course intrigued by shiny packets. Two thirds of smokers began when they were children.

Taxing smokers generates around £10bn a year. Whilst an underestimate is that it costs the NHS £5bn a year. In my mind these figures are irrelevant. The state income is supposed to pursue the well- being of the public and for that to come from their ill- being is incompetent. The state should not maintain disease to profiteer from citizens. It is militant economics marching in the face of proper contemplation.You don’t have ingrown toe nails so you can have a nice haircut, do you?

Big tobacco has responded to the legislation by threatening to sue the governments in courts. Altira (the world’s largest tobacco corporation), parent of Phillip Morris USA, has expressed moral outrage at governments putting public health before the profit of individuals, “’Standardized packaging’ is a euphemism for government-mandated destruction of property.” Safe to say, Phillip Morris, owner of Marlboros, Benson and Hedges and the Tarantino motif Chesterfields, is fuming. “It is unlawful, disproportionate, and at odds with the most basic requirements of the rule of law.”

The ‘Transatlantic Trade and Investment Partnership’ rolls off the tongue as TTIP and is a US- EU trade deal avidly supported by the likes of Cameron and Obama. TTIP is the homogenisation of “non- tariff measures” in the US and the EU, with the aim of economic growth; i.e. abolishing regulation so we adhere to American standards of ‘free- trade’. For example, the ‘precautionary principle‘: in the EU if there is a suspected risk that an action or policy can cause harm to the public or the environment, science must then say otherwise. There is no such regulation in the US.

Our governments have taken a look at the world and decided that less regulated capitalism is what we need. Of course, it is an insult to the very concept of freedom to put things like public health, the environment and local business before the profit of international corporations. No matter that transatlantic trade is already relatively free, we already trade a shitload; there are not many regulations left.

Does ‘free trade’ even correspond to economic growth? Who does this growth benefit? NAFTA was a trade deal between Mexico and the US that began in 1994. From 1994- 2014 the income per person increased only by 1% annually. Would it have done worse without NAFTA? From 1960- 80 Mexico’s GDP per capita nearly doubled (before the neo- liberal handling of the 1980 debt crisis), if that had continued the country would have European living standards today. This is what happened in South Korea. Of course, Mexico is an entirely different scenario to the EU, but this does prove that ‘free trade’ does not necessitate economic growth for citizens.

In particular, it is the controversial ISDS or ‘Investor- State Dispute Settlement’ element of TTIP that Phillip Morris wishes was implemented already. It is a mechanism by which private companies would be able to seek compensation before an arbitral tribunal for government policies that are perceived as harming their profits… arbitral tribunal? An international hearing, out of the courts and behind closed doors, which decides how much money these companies should get. The supposed motive is to encourage foreign investment, despite there being no empirical evidence for this (there is no ISDS in any agreements Brazil has, or between the US and China).

The romance continues to blossom for Phillip Morris: ISDS is exclusive to foreign investment; US companies gain the right to these international arbitration tribunals, but EU companies must stick to national courts. Thus, reverse discrimination can occur in favour of US companies, such as our tobacco slinging friends. On the contrary, this would disrupt free competition.

The cost of proceedings is usually to the tune of millions of dollars. Therefore, it is only affordable for big business, despite medium to large companies amounting to only half the investors. More kindling for Phillip Morris; Altria’s net income for 2011 was a cool $3.3bn.

Accrediting authority to international tribunals doesn’t fair well for democracy; should decisions about the constraints on national sovereignty take place behind closed doors? Governments have a transparency obligation to their citizens, especially when it’s private companies after public money. Of course this fairs well for US companies such as Phillip Morris. When you take someone’s money, it’s best they don’t see it happen.

Phillip Morris and other US companies are used to bigger bucks when it comes to compensation; in the EU pay- outs ranged from $0.46m to $800m, while in the US pay- outs were between $0.5m to $1800m. ISDS would sort that out for them.

To top it off there can be dubious selection of panel members by law firms who specialise in international arbitration. There is a possibility they could choose people who are not impartial. It’s hard to say how far multinational billion dollar giants such as Phillip Morris have disseminated their influence.

Paying to smoke yourself is fair enough, but being made to pay vast sums for attempting to reduce children smoking is a con. ISDS would allow big tobacco to demand exactly that.

So, it is a match made in heaven for Phillip Morris and ISDS, and arbitral tribunals make the perfect spot for clandestine lovemaking. However, they will be bonking on the corpse of European law and democracy.

ISDS in Action:

The El Salvadorian government is being sued $300 million by OceanaGold for revoking permission for a gold mine, after public concern that it risked contaminating water supplies through an ISDS clause; chastised for daring to put clean water before profit.

The Ecuadorian government has been ordered to pay $1.77bn for expropriating its oil reserves to the loss of American oil giant Oxy. This is after the indigenous people in the oil rich Ecuadorian- Amazon region accused the company of exploiting the resources with no benefit to the poor and local communities. The US group also sold a part of an oil field without proper authorisation to Canada’s Alberta Energy Corp. Shame on them for exercising sovereignty over their own resources for the good of the residents.

Argentina was sued by international utility companies for imposing a freeze on people’s energy and water bills. It was these companies’ large charges that had prompted the government to act in the first place.

Phillip Morris is already using a trade agreement between Australia and Hong Kong to sue Australia for replacing cigarette packet branding with gruesome anti- smoking images.

UK Election Ttip:

Labour, the Conservatives, the Lib Dems and UKIP are all pro TTIP. The Green party are against it.

Surely this neo- liberal agenda, this economic anarchy, is reaching its ttipping point.

By James Wright

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