Response to the statement issued by Malaysian Council for Tobacco Control (MCTC) on the proposal for full tobacco control carve-out under TPPA

1. The Ministry of International Trade and Industry (MITI) would like to respond to the call raised by MCTC for us to defend the total tobacco control carve-out under TPPA.

2. Malaysia had formally tabled a proposal for a total carve out of tobacco from the TPPA on 26 August 2013 at the nineteenth round in Brunei. Since then we have been relentless in our efforts to secure an agreement for total tobacco carve-out through the formal rounds of TPPA negotiations and lobbying support from the other negotiating partners at every available opportunity.

3. Our proposal on this matter was applauded by various parties around the world. In fact, New York Times in its editorial published on 31 August 2013, wrote that, "The Malaysian proposal to preserve that ability (of countries to impose stiff rules on the sale of cigarettes and other tobacco products within their own borders) led to a stalemate at the TPP trade meeting in Brunei and forced the deferral of the issue to future meetings".

4. It must be stressed that Malaysia fought hard in our attempt to secure support for this proposal, including at Ministerial meetings of the TPPA until the last round of negotiation, but despite our very best effort, the proposal did not receive enough support across the board.  The 12 participating countries could not come to a consensus on the proposal for full tobacco carve-out.

5. However, despite falling short of a total carve-out, it should be noted that the final text of the TPPA has included a provision which states that claims challenging a tobacco control measure cannot be made under the Investor-State Dispute Settlement (ISDS) mechanism. 

6. This is the first time in the history of multilateral trade negotiations where tobacco is given exceptional treatment and Malaysia has been credited for our effort in tabling the initial proposal which led to this compromise.

7. While this carve out may not be as comprehensive as our initial proposal, we must not dismiss the fact that  this compromise in itself is a huge win since it sets a strong precedent for tobacco control and public health.  It does not in any way affect the sovereign right of a TPP country to further regulate or impose tobacco control measures. Whilst such measures are bound by the trade principles of non-discrimination, the exclusion from ISDS as provided by the TPPA would ensure that states will be protected against any challenge by foreign investors.

8. This is a testimony from the American Cancer Society: “This agreement was crafted not only to benefit the participating countries economically, but to promote public health by prohibiting tobacco companies from using it to attack laws that are intended to reduce the devastating toll of tobacco use,” said Chris Hansen, president of the American Cancer Society Cancer Action Network (ACS CAN). “TPP member countries are saying they will no longer allow the tobacco industry to overturn lifesaving tobacco control laws with costly trade-related legal challenges. This should set a precedent for future trade agreements to put an end to tobacco company abuses that threaten global public health and economic growth.”

9. Measures to control cigarette consumption must not be solely dependent on what the TPPA provides. There are other measures which the Ministry of Health has adopted that do not violate any trade agreements.

Ministry of International Trade and Industry
16 November 2015