Emerging threats to public health from regional trade agreements.

The decision by Australia’s High Court to uphold the constitutionality of the country’s ground-breaking tobacco plain packaging laws has been heralded as a victory for national sovereignty over vested interests. However, the ability of governments worldwide to introduce and im plement public health policies and laws is increasingly threatened by trade and investment treaties that privilege investors over governments and provide avenues for international corporations to challenge democratically enacted public health policies in diff erent countries. The risks are clearly shown by Philip Morris Asia’s challenge to Australia’s plain packaging laws under the investor–state dispute settlement (ISDS) provisions set out in an investment treaty between Australia and Hong Kong. The action by Philip Morris Asia seems to be part of a global strategy by the tobacco industry to use international trade and investment dispute mechanisms to undermine tobacco control measures. Other such disputes include investor-state actions by tobacco companies against Uruguay and Norway and challenges within the dispute mechanisms of the World Trade Organisation (WTO) brought against both the USA and Australia by other countries. Through the ISDS mechanism, Philip Morris Asia is seeking the suspension of enforcement of Australia’s plain packaging legislation, or millions of dollars in compensation on the grounds that the value of its investment has been aff ected by the supposed expropriation of its trademarks and related branding. Australia, however, has a strong case, in part because Philip Morris Asia acquired its holdings in Philip Morris Australia in February, 2011, after the Australian Government had announced its intention to introduce plain packaging. But the costs of such litigation can amount to millions of dollars, the ISDS process is without many of the safeguards and the transparency of domestic legal systems, and the mere threat of legal action can have a powerful deterrent eff ect on governments considering the introduction of new laws to regulate industry in ways that protect public health. On a global scale, the most recent trade-related threat comes from the negotiations for the Trans Pacifi c Partnership Agreement (TPP), a large regional trade agreement consisting of 11 countries around the Pacifi c Rim—Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, USA, and Vietnam. Together these countries account for almost 10% of the world’s population. They include some of the biggest economies in the world, accounting for more than 30% of the world’s gross domestic product (with a combined value of US$20 734 billion in 2011), in a region that represents 40% of global trade. More countries are likely to accede in future: Japan, Thailand, and the Philippines have already expressed interest in potentially joining. Arguably a geopolitical manoeuvre on the part of the USA—which is seeking to stake its claim in the region as a counter to China—the TPP might tilt the axis of economic power towards this region of the world, and, by setting an ambitious precedent, reset global trade rules. Negotiations for the TPP began in March, 2010, and the 16th negotiating round will begin on March 4, 2013, in Singapore. Negotiations are held under conditions of confi dentiality and draft texts are not publicly available. The agreement includes 29 chapters or negotiating areas, ranging from traditional trade issues such as trade in goods and technical barriers to trade, to areas in which unprecedented commitments have been proposed, such as regulatory coherence as well as stronger intellectual property rights and investor protections than those provided by previous trade agreements. Regional trade agreements such as the TPP are emerging in the context of countries being unable to gain the terms they want through the multilateral trading system generally overseen by the WTO. During the past decade, the WTO has been progressively abandoned by wealthy countries in favour of bilateral and regional trade agreements, leading to multiple overlapping trade commit ments of increasing complexity. The capacity for regional agreements such as the TPP to create and exacerbate health inequities derives, in part, from their inherent power imbalances. Wealthy countries have more bargaining power to negotiate advantageous trade rules, and tend to use this power to gain concessions that they are unable to obtain through the WTO. Large corporations also hold disproportionate power in such agreements, and are the benefi ciaries of their rules, which they are able to enforce through new dispute settlement mechanisms. These asymmetries are com pounded by the lack of accountability and transparency measures compared with the formal rules and dispute settlement procedures of the multilateral system. Such power dynamics can exacerbate inequities in the benefi ts from trade. The TPP is a prototype of a new style of regional trade agreement that presents profound new threats to global health and health equity. Unlike older trade agreements, 21st century trade is no longer about selling goods produced in one nation to customers in another: it is a complex mix of trade in goods, services, and investments. The TPP will deepen global economic integration by reaching much further into the regulation of Lancet 2013; 381: 1507–09