I've heard this argument before, but I've never seen it written up (and thus been able to blog about it). Here's the text of a draft letter to USTR Ron Kirk, which is being circulated by Congresswoman Linda Sanchez to her House colleagues:
... We write to seek clarification regarding the apparent coverage of tobacco under both the trade and investment provisions of the TPPA [Trans-Pacific Partnership Agreement]. The Doggett Amendment and Executive Order 13193 forbid the use of government funds to promote the sale or export of tobacco and prohibit government agencies from seeking to reduce or remove foreign restrictions on the marketing and advertising of tobacco products. Accordingly, we ask that you carve tobacco out of the TPPA.
...
... We understand that the TPPA is designed to facilitate trade by, among other things, lowering tariff rates. Lowering tariff rates promotes the sale and export of products by making products less expensive. It appears as though the TPPA includes tobacco in tariff reduction negotiations and is therefore promoting the sale and export of tobacco.
The Doggett Amendment and Executive Order 13193 also forbid government agencies, including USTR, from seeking to reduce or remove nondiscriminatory restrictions on the marketing and advertising of tobacco products.
We understand that the TPPA will include strong intellectual property and investment provisions as well as an investor-state dispute settlement process, which provides a mechanism for private companies to enforce these provisions. Philip Morris International is currently relying on provisions nearly identical to those contemplated in the TPPA to challenge Uruguay’s regulations on the marketing and advertising of cigarettes. Philip Morris has also argued that Australia’s proposed regulations requiring “plain packaging” of cigarettes would violate investment rules.
We believe that the simplest way for you to bring the TPPA negotiations into compliance with the Doggett Amendment and Executive Order 13193 is to carve tobacco out from all provisions of the TPPA regarding tariff reductions and restrictions on nondiscriminatory regulations, including regulations regarding tobacco marketing and advertising. If you decline to carve out tobacco, please provide us with a detailed analysis explaining how the inclusion of tobacco in the TPPA is compliant with the Doggett Amendment and Executive Order 13193.
Two points occur to me in reaction to this letter.
First, the letter states that "[l]owering tariff rates promotes the sale and export of products by making products less expensive." Let's assume that cigarettes are bad and we as a society want to discourage smoking. Are protected, national markets for cigarettes better from a public health perspective? If you are a free trader, you probably believe that this would make cigarettes more expensive and of lower quality. So, in terms of discouraging smoking, this is a good outcome. On the other hand, would such a policy create a powerful domestic monopoly/oligopoly, which would become very adept at lobbying the government against taking any further health measures to stop people from smoking?
Second, what would a carve out for tobacco from investor-state and intellectual property protections look like? Would it, for example, say that expropriations must be compensated except where they involve the tobacco industry?
