Recall that the TPP tobacco carveout says this:
Article 29.5: Tobacco Control Measures12
A Party may elect to deny the benefits of Section B of Chapter 9 (Investment) with respect to claims challenging a tobacco control measure13 of the Party. Such a claim shall not be submitted to arbitration under Section B of Chapter 9 (Investment) if a Party has made such an election. If a Party has not elected to deny benefits with respect to such claims by the time of the submission of such a claim to arbitration under Section B of Chapter 9 (Investment), a Party may elect to deny benefits during the proceedings. For greater certainty, if a Party elects to deny benefits with respect to such claims, any such claim shall be dismissed.
12 For greater certainty, this Article does not prejudice: (i) the operation of Article 9.14 (Denial of Benefits); or (ii) a Party’s rights under Chapter 28 (Dispute Settlement) in relation to a tobacco control measure.
13 A tobacco control measure means a measure of a Party related to the production or consumption of manufactured tobacco products (including products made or derived from tobacco), their distribution, labeling, packaging, advertising, marketing, promotion, sale, purchase, or use, as well as enforcement measures, such as inspection, recordkeeping, and reporting requirements. For greater certainty, a measure with respect to tobacco leaf that is not in the possession of a manufacturer of tobacco products or that is not part of a manufactured tobacco product is not a tobacco control measure.
Let's say a TPP government adopts a plain packaging measure for cigarettes, but the measure only applies to cigarettes made by foreign-owned companies, while domestically-owned companies can keep using cartoon animal images, macho guys with mustaches, etc.
If a foreign investor from another TPP party challenges this measure using ISDS, and the government that adopted the measure elects to deny benefits pursuant to the tobacco carveout, would the measure be deemed a "tobacco control measure" that is covered by the carveout? Clearly, it relates to the labelling and packaging, among other things, of the measure to a certain degree. However, the measure seems arbitrarily and unjustifiably discriminatory on the basis of the nationality of the company, and a large section of the industry is left "uncontrolled." So, can the measure's purpose really be said to be "tobacco control," when it seems to have a protectionist purpose that undercuts its tobacco control objectives?
And, following-up on points I raised here, who decides whether the measure is a tobacco control measure? Does a tribunal need to be set up to answer this preliminary question?
