By Doug Palmer
WASHINGTON (Reuters) - A U.S. trade proposal aimed at eliminating foreign tariffs on U.S. tobacco products while preserving the right of governments to adopt anti-smoking regulations is drawing fire from opposing sides - public health and business groups.
The American Cancer Society and allied organizations said the plan would give tobacco companies a new tool to challenge government anti-smoking measures, while business groups such as the U.S. Chamber of Commerce and the American Farm Bureau Federation said it would weaken a tenet of international trade law that many U.S. exporters rely on to sell goods abroad.
U.S. trade negotiators will offer the proposal in talks beginning on Friday in Brunei on the Trans-Pacific Partnership (TPP), a proposed free trade agreement between the United States, Japan, Canada, Mexico, Chile, Peru, Australia, New Zealand, Malaysia, Vietnam, Singapore and Brunei.
Washington hopes to wrap up the proposed pact by the end of the year. The Brunei meeting is the 19th round in a negotiation that has already lasted more than three years.
U.S. Trade Representative Michael Froman, in a statement, defended the tobacco proposal, which he said reflected input from a "wide range of American stakeholders," including members of Congress, health advocates and farmers.
The proposal preserves "the ability of the United States and other TPP countries to regulate tobacco and to apply appropriate public health measures" while maintaining the U.S. objective of negotiating a comprehensive trade agreement that does not exclude any agricultural product, Froman said.
The plan also reflects the U.S. government view that tobacco "is a unique product - it is highly addictive, always harmful to human health, and the single most preventable cause of death in the world," said Bill Corr, deputy secretary of the U.S. Department of Health and Human Services.
A U.S. trade official, speaking on condition he not be identified, said crafting the proposal had been hard because of conflicting pressures on the health and trade policy side.
The resulting compromise goes further than previous trade agreements in protecting tobacco regulations, while still targeting foreign tobacco tariffs for elimination, he said.
Some TPP countries, such as Australia, Chile, Peru and Singapore, already have individual trade deals with the United States that phased out their tobacco tariffs.
But anti-smoking groups wanted the Obama administration to completely exclude tobacco from the TPP pact, which would have allowed countries like Vietnam and Malaysia that still have tariffs on U.S. tobacco products to keep them.
Excluding tobacco from the pact also would have prevented tobacco companies from using the TPP to challenge anti-smoking regulations, said John Stewart, director of anti-smoking operations at Corporate Accountability International, a Boston-based corporate watchdog organization.
Instead, the United States wants to include a provision in the TPP pact making clear that a "general exception" giving governments the right to take necessary action to protect human life or health specifically applies to tobacco health measures.
In another nod to health advocates, Washington is also proposing to require government-to-government talks between health authorities before any member of the TPP pact can challenge another member's tobacco regulations.
Anti-smoking groups including the American Lung Association, American Heart Association and the Campaign for Tobacco-Free Kids criticized the proposal as too weak.
"The end result is that the Obama Administration's strong commitment to reducing tobacco use in the United States will remain vulnerable to international trade challenges, and other trading partners will remain vulnerable to such challenges as well," they said in a joint statement.
The groups said they are wary of the TPP agreement because the tobacco industry has used other trade and investment pacts to challenge anti-smoking measures in the United States, Australia, Uruguay, Ireland, Norway and Turkey.
On the other side, the U.S. Chamber of Commerce and its allies said they were worried by the precedent set by specifically identifying tobacco regulations as an area where governments can take necessary measure to protect public health.
That could encourage other governments "to propose additional product-specific references," which could be used to block a variety of U.S. exports on health grounds, the groups including the Emergency Committee for American Trade said in a letter urging Froman to abandon the proposal.
They argued the standard general exception used in trade agreements dating back to 1947 should be enough to address any concerns about protecting tobacco regulations.
(Reporting by Doug Palmer; Editing by Phil Berlowitz)