When the TPP text is made public, no doubt lots of people will explore in excruciating detail each and every word of the "carve-out" of tobacco from the investment provisions. Until then, we can talk about the reductions in tariffs on tobacco products, set out here by USDA:
Under the TPP agreement, Japan will eliminate all tariffs on tobacco, currently as high as 29.8 percent, in 11 years.
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Malaysia will eliminate all tariffs on tobacco in 16 years.
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New Zealand will immediately eliminate all tariffs on tobacco.
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Vietnam will eliminate all tariffs on tobacco, which are currently as high as 135 percent. For manufactured tobacco products, Vietnam will eliminate tariffs in 16 years. For unmanufactured tobacco, Vietnam will create a 500-ton transitional tariff rate quota (TRQ) that will grow by five percent each year, with in-quota tariff rates eliminated in 11 years and out-of-quota tariff rates eliminated in 21 years.
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Brunei will immediately eliminate all tariffs on tobacco.
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The United States will eliminate all tariffs on tobacco, currently as high as 350 percent, in 10 years.
No word on the situation in other TPP countries, but I suppose if they are not mentioned, it means they are not reducing any tariffs.
We've talked before about the implications of eliminating tobacco tariffs. For me, the main impact is that it removes protection of the domestic tobacco industry, and it would be a stretch to say that such protection helps with public health.
The counter-argument is that removing tariffs will lead to lower prices and higher consumption. Well, here's a great test case (assuming the TPP comes into force). What happens to tobacco sales now in these countries? Will governments who lowered tariffs now increase domestic taxes? Will tough new regulations be imposed?
