[CTC] Australia Says It Intends To Deny Tobacco ISDS Challenges Under TPP

[Arthur Stamoulis]

Australia Says It Intends To Deny Tobacco ISDS Challenges Under TPP
Inside US Trade; February 19, 2016 
The government of Australian Prime Minister Malcolm Turnbull has notified the country's parliament that it plans to take advantage of a provision in the Trans-Pacific Partnership (TPP) agreement allowing it to deny access to investor-state dispute settlement (ISDS) for challenges of anti-tobacco measures.

The notification came as part of a wide-ranging national interest analysis <http://insidetrade.com/node/152694> it formally submitted to parliament on Feb. 9 along with the TPP text, annexes and side letters. The submission of these documents to the Joint Standing Committee on Treaties (JSCOT) kicked off the formal TPP ratification process in Australia.

“Australia will also lodge a notification, expressly permitted under Article 29.5, electing to prevent any and all Investor-State Dispute Settlement (ISDS) challenges to Australia’s tobacco control measures under the TPP,” the national interest analysis states in paragraph 5. TPP Article 29.5 gives countries the option to prevent such challenges.

Australia has long been sensitive on this issue, given that its tobacco plain-packaging law was challenged by Philip Morris under the ISDS mechanism of the Hong Kong-Australia bilateral investment treaty. An ISDS tribunal threw out that case on procedural grounds in December, although the text of its decision has not yet been published.

One industry source said Australia appeared to be the first TPP country to publicly say it will use the ISDS tobacco carveout. But this source emphasized that Australia's statement comes as no surprise given its longstanding position on this issue.

In the national interest analysis, Australia also reiterated its position that the TPP obligation on market exclusivity for biologic drugs will not require it to change its existing law, which grants five years of data exclusivity for such medicines.

“For the first time in a trade agreement, the TPP contains measures relating to biologics which are rapidly evolving classes of medicines that treat difficult to cure diseases and illnesses such as cancer,” the national interest analysis states in paragraph 41. “Importantly, the TPP will not require changes to be made to Australia’s existing five years of data protection for biologics or any other part of our health system and will not increase the cost of medicines for Australians under our public health system.”

Article 18.51 of the final legal TPP text provides countries with two options for protecting biologics, the first of which is to provide eight years of market exclusivity. The second option is for countries to provide five years of market exclusivity for biologics plus unspecified "other measures," while recognizing "that market circumstances also contribute to effective market protection to deliver a comparable outcome in the market."

The JSCOT will hold a public hearing on TPP on Feb. 22 <http://insidetrade.com/node/152701> at the Australian Parliament House in Canberra, at which officials from various Australian government agencies are slated to testify. The committee has also solicited comments from the public on the TPP agreement, which are due by March 11.

The acting chair of JSCOT, Labor Party MP Kelvin Thompson, was publicly critical <http://insidetrade.com/node/143442> of the TPP during its negotiation.

After the TPP signing earlier this month, Andrew Robb, who at the time served as the Australian trade minister, said he anticipated <http://insidetrade.com/node/152441> that the Australian Parliament will be able to complete the ratification process in the second half of the year.

He said the process consists of the JSCOT reviewing and holding public hearings on the agreement, which is expected to finish in two to three months, after which the committee will issue a report on TPP. After that, parliament will have to consider any legislative changes needed to implement TPP, he said.

Robb's replacement as trade minister, Steven Ciobo, took office on Feb. 18. Robb was named special envoy for trade. Both Robb and Ciobo were in the U.S. this week for a trade mission.

 
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