International trade versus public health during the FCTC negotiations, 1999-2003

Abstract

Objective

To examine why the Framework Convention on Tobacco Control did not include an explicit trade provision and delineate the central arguments in the debate over trade provision during the negotiations.

Methods

Triangulate interviews with participants in the FCTC negotiations, the FCTC negotiations documents, and tobacco industry documents.

Results

An explicit FCTC trade provision on relation between international trade and public health became a contentious issue during the negotiations. As a result, two conflicting positions, health-over-trade and opposition to health-over-trade emerged. Opposition to explicit trade language giving health priority was by both tobacco industry and countries that generally supported strong FCTC provisions because of concerns over ‘disguised protectionism’ and setting a precedent whereby governments could forfeit their obligations under pre-existing treaties. Owing to lack of consensus among political actors involved in the negotiations, a compromise position eliminating any mention of trade emerged, which was predicated on belief among some in the public health community that public health would prevail in future trade versus health conflicts.

Conclusion

The absence of an explicit FCTC trade provision was due to a political compromise rather than the impact of international trade agreements and decisions on public health and lack of consensus among health advocates. This failure to include an explicit trade provision in the FCTC suggests that the public health community should become more involved in trade and health issues at all levels of governance and press the FCTC Conference of the Parties for clarification of this critical issue.

INTRODUCTION

International trade agreements and World Trade Organization (WTO) decisions can threaten tobacco control policies by forcing states to remove barriers to trade,^1-13which affects efforts to reduce tobacco consumption by raising prices through tobacco excise taxes and duties and limiting exposure to tobacco advertising,^{9, 14} and through threats of trade sanctions (C Callard, personal communication, 2009).^{9, 15, 16} In 2002, WTO and the World Health Organization (WHO) prepared a report to reconcile WTO trade decisions and WHO public health policies¹⁷ amidst the contentions concerning whether the WHO Framework Convention on Tobacco Control¹⁸ (FCTC) should have a trade provision and the language for such provision during the negotiations (D Yach, personal communication, 2008). The General Agreement on Tariffs and Trade (GATT)/WTO has provided the venue for settling trade-health conflicts among countries until the FCTC negotiations. (The GATT became the WTO in 1994.) GATT Article XX(b) allows countries to protect health of humans, animals or plants life¹⁹ but GATT and WTO panels have interpreted this provision narrowly, requiring public health regulations that affect trade be ‘non-discriminatory,’ ‘necessary’ and ‘reasonable,’⁷ impeding tobacco control (table 1).

Table 1.

Trade policies and precedents and implications for tobacco control

Trade policies	Purpose	Implication(s) for tobacco control
1947–1994–5: General Agreement on Tariffs and Trade (GATT)	Most favoured nation (MFN) or no less favourable treatment of like products Like products should be granted national treatment or non-discrimination Prohibition of quantitative restriction on imports	Article XX(b) grants Member States the right to take measures to protect human, animal or plant life or health. However, the measures should be ‘necessary’ and ‘least restrictive,’ and should not constitute a ‘disguised restriction on international trade’ or ‘arbitrary or unjustifiable discrimination. The burden is on countries to prove that their tobacco control measures meet these standards7-9, 13, 16, 20-22
1980s: The US enforced 1984 Amendment to Section 301 of the 1974 Trade Act	The US Cigarette Export Association lobbied the US Trade Representative, which used the threat of trade sanctions to open markets in Japan, Taiwan, South Korea and Thailand to US tobacco companies.	The opening of the Asian markets resulted in increased tobacco use9, 23-25
1986–1994–5: Uruguay round of trade talks	Tobacco products and raw tobacco were made part of the negotiations on agricultural products such as coffee, maize and rice.	Tobacco negotiated as part of agricultural products and made a tradable commodity under the international trading regime, which places limitation on countries’ ability to develop innovative public health policies without fear of violating World Trade Organization (WTO) rules or retaliation from other countries5, 26
1990: GATT Panel ruling in the Thai case	The US claimed that Thailand’s 1966 Tobacco act violated GATT principle. The Thai government defended the Act under GATT Article XX(b)	Panel concluded that tobacco control measures should be ‘non-discriminatory,’ and recognised the right of Member States to adopt and implement tobacco control measures, but such measures should be equally applicable to both domestic and imported products5, 8, 15, 21, 27
1994: Canada and plain packaging for tobacco products.	Philip Morris threatened to instigate a trade dispute over violation of trademark rules	Canada abandoned the policy (C Callard, personal communication, 2009)9, 16
1994: World Trade Organization (WTO) General Agreement on Trade in Services (GATS)	Covers rules governing trade in services	Opens health services to participation of the private sector and multinational corporations. These services include advertising, packaging, retailing, distribution, telecommunication, health care, licensing, and education, which impact trade in tobacco8, 9, 13, 15, 28
1994: WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)	Regulations of patents, copyrights, trademarks, and industrial designs	Affects governments’ ability to introduce medication programs such as those for treating tobacco dependence and cessation, and can apply to trademarks, labelling and packaging, and product/ingredient disclosure5, 7, 9, 13, 15, 28, 29
1994: WTO agreement on technical barriers to trade (TBT)	Technical regulations and standards for products, and recognises international standards by organizations such as the International Standards Organization	Grants Member States the ability to adopt and implement non-discriminatory and least restrictive measures that do not excessively impede trade. This agreement is relevant for product regulation, health warning and packaging, testing methods and regulation of the content of tobacco products5, 7, 9, 13, 15, 28
1994: WTO Agreement on import licencing procedures	Regulations concerning issuing of import licences	Relevant for licence to business to import both manufactured and un-manufactured tobacco products, and its relevant for measures to deal with illicit tobacco trade5, 8, 30
1994: Agreement on rules of origin	Regulations governing the transport of goods from the origin to destination	Relevant to tracing and tracking and duty-free tobacco control policies, and measures to deal with illicit trade in tobacco products5, 30
2001: Chile versus Peru	Chile claimed that Peru’s General Sales Tax and Selective Consumption Law that identify goods subject to selective consumption tax places different specific tax on imported cigarettes made by tobacco (dark and bright) primarily from Chile. As such, the Peru’s tax regime was discriminatory	Chile withdrew the case following Peru’s amendment of the law to make all cigarettes subject to the common selective tax system regardless of their origin, price, type or quality of tobacco and/or number of sales market.31 That is, the amended law became consistent with the ‘non-discrimination principle.’ Thus, governments must ensure that their tobacco control measures are universal and does not discriminate against imported products, necessary, and consistent with the WTO
2000–2003: Ban on misleading descriptors (‘light,’ ‘mild,’ ‘low’) in Canada and European Union	Philip Morris threatened to bring claim against Canada under the North Atlantic Free Trade Area. British American Tobacco, Imperial Tobacco, and Japan Tobacco International challenged the European Union ban at the European Court of Justice for infringement on trademark rights	The European Court of Justice dismissed the case, but did not determine TRIPS legality9
2003: Honduras versus The Dominican Republic	Honduras claimed that the application of the Dominican Republic Selective Tax Law created less favourable conditions for imported cigarettes and inhibited the importation of foreign cigarettes, contradicting GATT principles32	The Appellate Body concluded that the requirement that tax stamps be affixed on cigarette packets in the Dominican Republic was ‘not necessary’ because there were ‘reasonably available’ alternative WTO-consistent measures; rejected Honduras’ claim that the policy accords less favourable treatment to imported tobacco because ‘detrimental effect of a measure on a given imported product does not necessarily imply that the measure accords less favourable treatment to imports if the effect is explained by factors unrelated to the foreign origin of the product;’ and that the Dominican Republic imposition of bond requirement on cigarette importers violated the principle of no less favourable treatment of like products33, 34
2008: The Philippines case	Philippines claims that Thailand is violating GATT rules through a ‘partial and unreasonable’ administration of tobacco tax measures that give advantage to the Thai Tobacco Monopoly	The first tobacco-related case filed at the WTO since the FCTC became international law in February 2005. The case had not been decided as of May 201035
Emerging issue: plain packing in Asia	Tobacco companies have threatened to bring claim against some countries in Asia for violating trademark rules under TRIPS	Formal complaint has not been filed. These threats could have ‘chilling effects’ on states’ innovation of tobacco control measures

In the 1980s the USA threats to use sanctions and retaliation allowed under GATT forced Japan, South Korea and Taiwan to open their markets to foreign tobacco companies, increasing tobacco use.^{3, 23, 24} The 1986-1994 Uruguay GATT Round added tobacco as a commodity covered by trade rules, increasing global cigarette supply.⁵ In 1989, after US Cigarette Exporters’ Association lobbying, the US trade representative challenged Thailand’s 1966 Tobacco Act for placing limitations on US companies. In 1990, a GATT panel upheld the US challenge, forcing Thailand to open its market to the multinationals^{5, 21, 27}; the Thai government subsequently promulgated modified (but stringent) tobacco control measures consistent with this ruling.²¹ In 1994, in response to proposed plain packaging of tobacco products, Philip Morris threatened legal action against Canada alleging violation of trademark and intellectual property protections under GATT and North Atlantic Free Trade Area.³⁶ Although Philip Morris, a private company, did not have legal standing to bring a WTO claim,²⁹ Canada abandoned the policy.^{9, 15, 16}

The interconnectedness and interdependence fostered by these trade agreements and decisions facilitates the worldwide expansion of the multinational tobacco companies into developing countries, increasing tobacco-induced diseases.^{1, 9, 37, 38} In 2006, the World Health Assembly passed its ‘International Trade and Health Resolution’ (WHA59.26) that called on countries to give more attention to trade.³⁹ Trade-health tensions came to a head during FCTC negotiations over language giving health priority over trade. In the end, the FCTC preamble urged governments to give priority to health, but the FCTC did not include an explicit trade provision. The effort to shift the venue for resolving trade-health conflicts to a public health venue under FCTC failed, which can be understood in terms of global governance,^40-42 because FCTC establishes a global regulatory framework to cope with the problem of the use and spread of tobacco worldwide.^{12, 43-46} We analyse how and why this effort failed.

METHODS

We triangulated^47-49 interviews and tobacco industry and FCTC documents for the analysis.

We interviewed 54 people from 26 countries between July 2006 and May 2009, including current and former WHO cabinet members, former World Bank employees, World Health Assembly and FCTC negotiation delegates, WHO consultants and expert committee members, heads of national public health institutions, government officials, heads and representatives of non-governmental organisations, researchers and advocates using a protocol approved by the Committee on Human Subjects, UCSF.

We searched industry documents at legacy.library.ucsf.edu and tobaccodocuments.org beginning with ‘trade and FCTC’, ‘health and FCTC’ and ‘trade and public health’ and conducted follow-up searches using Bates numbers of documents and named individuals and organisations between May and December 2008, yielding 300 relevant documents.

We also searched FCTC negotiation documents and advocacy materials from Framework Convention Alliance⁵⁰ (FCA) and news reports.

RESULTS

FCTC negotiations: 1999–2003

In 1999, within the context of member states’ commitments to bilateral and multilateral trade liberalisation agreements, the WHA created⁵¹ the Intergovernmental Working Group (IGWG) to draft the treaty elements and the Intergovernmental Negotiating Body (INB) to negotiate the FCTC. In March 2000 the IGWG released the ‘Chair’s Text’, including Guiding Principle D.4 (later renamed Guiding Principle D.5) that ‘Trade policy measures for tobacco control purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade’⁵² (table 2). This proposal generated tensions among the delegates and public health community (table 3) because it appeared to prioritise trade over health.

Table 2.

Evolution of trade and health text during the framework convention on tobacco control negotiations

Working Group	INB1	INB2	INB3	INB4	INB5	INB6	FCTC
27–29 March 2000 Guiding Principle D.4 Trade policy measures for tobacco control purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade	16–21 October 2000 Guiding Principle D.4 Trade policy measures for tobacco control purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade	30 April - 5 May 2001 Guiding Principle D.5 Tobacco-control measures should not constitute a means of arbitrary or unjustifiable discrimination in international trade	22–28 November 2001 Guiding Principle D.5 {5. Tobacco-control measures (taken to protect human health) {should not {constitute}/(be deemed as constituting) a means of arbitrary or unjustifiable discrimination in} (must take into account the rules of) international trade}	18–23 March 2002 Guiding Principle D.5 (Priority should be given to measures taken to protect public health when tobacco control measures contained in this Convention and its protocols are examined for compatibility with other international agreements) or (The Parties agree that tobacco control measures shall be transparent, non- discriminatory and implemented in accordance with their existing international obligations) or (Tobacco control measures should not constitute a means of arbitrary or unjustifiable discrimination in international trade.) or (Tobacco control measures taken to protect human health should not be deemed as constituting a means of arbitrary or unjustifiable discrimination in international trade)	14–25 October 2002 Article 4.553 While recognising that tobacco control and trade measures can be implemented in a mutually supportive manner, Parties agree that tobacco control measures shall be transparent, implemented in accordance with their existing international obligations, and shall not constitute a means of arbitrary or unjustifiable discrimination in international trade	17–28 February 2003 Article 4.8 (4.8. While recognising that tobacco control and trade(-related) measures can be implemented in a mutually supportive manner (to protect public health), Parties agree that tobacco control measures shall be transparent, implemented in accordance with their existing international obligations, and shall not constitute a means of arbitrary or unjustifiable discrimination in international trade, or Tobacco control measures taken to promote public health in accordance with the provisions of this Convention shall not be deemed as constituting a means of arbitrary or unjustifiable discrimination in international trade.)	21 May 2003 Preamble The parties to this convention, determined to give priority to their right to protect public health, …
					Article 2.3 Nothing in this Convention and its related protocols shall be interpreted as implying in any way a change in rights and obligations of a Party under any existing international treaty	Article 2.3 (2.3. (Priority should be given to measures taken to protect public health when tobacco control measures contained in this Convention and its protocols are examined for compatibility with other international agreements)/(Nothing in this Convention and its related protocols shall be interpreted as implying in any way a change in the rights and obligations of a party under any existing international treaty))

Table 3.

Position on proposed FCTC guiding principles D.5 during second session on the Intergovernmental negotiating body in 2001 (FCTC Intergovernmental negotiating body, FCTC Documentation Center, 2001)

Favour	Ambivalent	Opposed
Japan, USA, Tobacco companies, Turkey, WHO Tobacco Free Initiative 19 Latin American countries	Russia and Surinam	Countries: Armenia, Bangladesh, Canada, China, Egypt, Iran, Israel, Jamaica, Norway, Oman, Pakistan, Palau, Panama, Philippines, Saudi Arabia, Sri Lanka, Thailand and Uruguay Groups: Baltic States, European Union, WHO Africa and South East Asian regions

The WHO Tobacco Free Initiative (TFI) (C Callard, personal communication, 2009), (Lambert P, personal communication, 2009) supported Guiding Principle D.5, which was similar to GATT Article XX(b) (table 1) because TFI’s prime objective was to ensure successful negotiation of the FCTC. TFI’s support for this ‘non-discrimination’ provision coincided with major trading countries positions (IS Shapiro, personal communication, 2009). In January 2000, TFI presented a paper⁸ during an FCTC consultation in New Delhi, India, arguing that Article XX(b) (table 1) protected public health. This position was controversial among public health advocates and generated a debate during the 11th World Conference on Tobacco or Health in August 2000, where civil society supporters of FCTC and an FCTC delegate argued that WTO health provisions limited countries’ abilities to regulate tobacco; TFI’s assistant executive director and Ira Shapiro, a former US trade negotiator, opposed this position.^{2, 54} TFI maintained this position during the negotiations because ‘similar treaty language was contained in a number of multilateral environmental agreements’(INB, unpublished, 2001). Although the 2002 WHO/WTO report¹⁷ attempted to reconcile the issue, it continued to divide the public health community during FCTC negotiations.

The disagreement over the ‘non-discrimination’ trade provision, Guiding Principle D.5, led the chairman to revise the text before INB4 in March 2002. The revised chairman’s text contained four policy options, ranging from FCTC taking precedence over all international agreements to subordination of FCTC provisions to prior international commitments (table 2).⁵⁵ At INB5 in October 2002, the Guiding Principle was replaced with Articles 2.3 and 4.5, which simply subordinated FCTC to WTO.

Articles 2.3 and 4.5 were deleted from the chairman’s text between INB5 and INB6 based on the argument that previous international conventions already dealt with relationships between treaties. According to a February 2003 confidential briefing for the INB6 chairman, probably prepared by TFI, ‘it was unnecessary to include a specific provision (Article 2.3) on this topic (FCTC relationship with existing international treaties) since these matters are adequately addressed by the Vienna Convention on the Law of Treaties’, stipulating that ‘the more recent treaty will be applied in precedence over the older one’ and ‘the more specific treaty will be applied in precedence over the more general one….’ (INB, unpublished, 2003). This note suggested that since the FCTC was more recent and product-specific, it would supersede older and generic treaties, including WTO.⁸ With respect to Article 4.5, the briefing said,

The issue of public health and trade is a complicated question because values are involved. There is no point in addressing the question of whether health takes preceden(ce) over trade, or the other way around, because the real question relates to translating this principle into obligations that states will accept. (INB, unpublished, 2003)

This briefing attempted to avoid a contentious issue that had potential of derailing the entire negotiations. In contrast, civil society participants suggested that Articles 2.3 and 4.5 were deleted from the Chair’s text before INB6 because of opposition from FCA and lack of support from most WHO member countries (C Callard, personal communication, 2009; IS Shapiro, personal communication, 2009; J Bloom, personal communication, 2009).

At the same time that the chairman was being briefed to delete Articles 2.3 and 4.5, civil society groups⁵⁶(C Callard, personal communication, 2009; J Bloom, personal communication, 2009) and countries that favoured health-over-trade (table 4) continued to press the issue. As a result, the articles were re-inserted into the Chair’s text for INB6 (INB, unpublished, 2003).

Table 4.

Countries positions on Articles 2.3 and 4.8 during the 6th Session of Intergovernmental Negotiating Body, February 2003

Opposed health over trade	Health over trade	Consensus language/silence
Tobacco industry, Argentina, USA, and Russia	Countries: China, Namibia, Palau, Panama, Papua New Guinea, South Africa, Thailand, Groups: WHO African, Eastern Mediterranean and South East Asian Regions, Pacific Island States, English-speaking Caribbean countries Civil Society: Framework Convention Alliance	Countries: Australia, Canada, European Commission, Iceland, Iran, Japan, Norway, Pakistan, Philippines, Saudi Arabia, South Korea, Turkey Organisations: The WHO Tobacco Free Initiative

Lacking consensus on FCTC trade language during INB6, delegates deleted both provisions and settled on silence¹⁸ (table 2).

Tobacco industry activities

The tobacco companies monitored and sought to undermine any WHO tobacco control activities that could affect trade,⁵⁷ particularly after the idea of developing FCTC entered WHO agenda in 1995,^{58, 59} efforts that accelerated during the negotiations.^60-63 A 1999 British American Tobacco (BAT) Consumer and Regulatory Affairs Department ‘roadmap’ on countering international tobacco regulation stated, ‘tax and trade structures have a major, measurable impact on our business and profitability.’⁶² The companies thought FCTC threatened their ability to freely trade tobacco^{60, 64-66} and pressed all levels of government to keep tobacco a commodity under WTO.^{60, 62, 67, 68} A March 2001 BAT analysis of the Chair’s text concluded, ‘in an era of globalisation (BAT will) oppose new restrictions to international trade.’⁶⁶

Using trade issues to delay and dilute the FCTC

By 1999, the tobacco companies were simultaneously working to stop FCTC and influence its content.^{60, 63, 69-71} In a March 1999 email urging staff to lobby local politicians and policy-makers, BAT’s international governmental affairs manager encouraged them to emphasise economic and trade issues because he thought these issues could undermine WHO efforts to develop the FCTC.⁷²

The companies worked at the national level to engage trade, finance and agricultural ministries and the local companies in the negotiations.^73-77 As a result, Russia’s (Ref 76) position moved towards the industry’s position (J Bloom, personal communication, 2009). The companies monitored the US government’s position throughout the negotiations because of its support for trade liberalisation and sought to find avenues to influence its positions.^78-85

The companies recruited influential and politically connected trade experts to develop policy papers challenging the legitimacy and necessity of an FCTC trade provision. They included BAT’s international trade affairs manager, Nicola Shears, formerly of the UK’s Department of Trade and Industry,^{68, 86-89} and consultant Doral Cooper, formerly assistant US trade representative and president of Crowell and Moring, a Washington, DC-based international trade and investment consulting firm.^89-91 The position papers argued that FCTC trade provision conflicted with WTO and other international agreements^{90, 92-96} and, like WHO¹⁷ and its TFI,⁸ that existing WTO health provisions protected public health, making health-over-trade FCTC provision unnecessary.^{77, 97-108}

The companies also monitored other international forums in which FCTC might be discussed, particularly the 1999 WTO Millennium ministerial meeting in Seattle^{109, 110} and the April 2001 Summit of Americas.^{111, 112} Neither made any official statement on the FCTC.¹¹³

The companies unsuccessfully lobbied top WTO officials^114-119 to participate in the FCTC trade-health debate to ensure that trade-health conflicts remained under WTO ambit. After Mike Moore, WTO Director General from 1999 to 2002, was elected, BAT International Trade Affairs and International Political Affairs mangers worked directly through their CEO, Martin Broughton^{115, 118, 119} and consultants,¹¹⁸ and indirectly through the International Chamber of Commerce^120-126 to lobby Moore to intervene in the FCTC debate. Moore did not intervene.^{116, 117}

Finally, the companies unsuccessfully sought to get other industries, particularly alcohol,^{70, 110, 125, 127} involved in the debate using the ‘slippery slope’ argument that any WHO regulation of tobacco trade would have implications for them.^{70, 101, 125, 127}

Industry support for guiding principle D.5

The companies strongly supported Guiding Principle D.5, the ‘non-discrimination’ provision (table 2), because it would have strengthened their ability to trade freely^{69-71, 128-132} by subordinating FCTC to WTO rules. In a 2001 submission to a US FCTC hearing, Philip Morris supported Guiding Principle D.5,¹²⁹ arguing that WTO rules already ‘allow governments to take legitimate actions to impose health-related measures that might impact international trade in tobacco products, provided those measures do not arbitrarily or unjustifiably discriminate against foreign products or provide disguised protections to domestic goods.’¹²⁹

FCTC COALITION ACTIVITIES

An informal coalition of government delegations, intergovernmental organisations, and civil society groups that supported a strong FCTC emerged during the negotiations (C Callard, personal communication, 2009; D Yach, personal communication, 2008; N Collishaw, personal communication, 2006).⁵⁰ This coalition included Australia, Canada, New Zealand, Norway, the English-speaking Caribbean and some Latin America countries, Pacific Island States and WHO African, Eastern Mediterranean, and Southeast Asia regions, the European Union, TFI, World Bank, and FCA. While coalition members agreed by INB6 that Articles 2.3 and 4.8 should be deleted (tables 2 and 4), they disagreed on appropriate trade language (C Callard, personal communication, 2009; D Yach, personal communication, 2008; N Collishaw, personal communication, 2006; P Lambert, personal communication, 2009; IS Shapiro, personal communication, 2009). This disagreement was contentious and polarising, resulting in three competing positions: support of health-over-trade, opposition to health-over-trade, and silence (table 4) (C Callard, personal communication, 2009; IS Shapiro, personal communication, 2009; J Bloom, personal communication, 2009).

Support of health-over-trade: the civil society position

The FCA was the leading supporter of health-over-trade, together with some national delegations, led by Thailand (table 4) (D Yach, personal communication, 2008; IS Shapiro, personal communication, 2009; J Bloom, personal communication, 2009; N Collishaw, personal communication, 2006). Delegations, particularly from Latin America, that had supported Guiding Principle D.5 (table 3) in 2001 became more supportive of health-over-trade by INB6 in 2003. The FCA’s strong opposition to Guiding Principle D.5 (table 3) and the desire to have an explicit health-over-trade provision in the FCTC (C Callard, personal communication, 2009; D Yach, personal communication, 2008; IS Shapiro, personal communication, 2009; J Bloom, personal communication, 2009) created tension with TFI.

In addition to other tactics to influence negotiations,^{43, 50, 133} FCA hired trade consultants, including the former US trade negotiator, Ira Shapiro (IS Shapiro, personal communication, 2009),¹³⁴ whose position had evolved from the adequacy of the WTO health provisions to support for an explicit FCTC health-over-trade provision,^{54, 134} to help the FCA lobby and provide expert advice to the delegates. Shapiro defended the health-over-trade position in a special report in the FCA Bulletin during INB2,¹³⁵ arguing that some WTO Panel and Appellate Body decisions placed an unreasonable burden on governments to justify public health measures. He concluded that a health-over-trade provision was necessary to uphold the rights of sovereign countries to institute tobacco control measures without fear of losing a WTO case or retaliation from other countries. He argued that tobacco is a unique product because it is addictive and dangerous, requiring that product-specific rules be adopted as a limited exception to general trade rules.¹³⁵ Shapiro and a colleague argued in the Bulletin during INB6 that without a health-over-trade provision, ‘hard-won tobacco control measures will be subject to trade challenges by countries where the multinational tobacco companies are headquartered’ because Article XX(b) has been construed narrowly and ‘in practice most trade panels have resolved uncertainty in favour of international trade interests.’²⁸

The FCA argued that Guiding Principle D.5 was ‘borrowed from Article XX of GATT, [which] creates serious problems for tobacco control and should be deleted’ because it would burden governments to prove that both the intent and effect behind a challenged regulation were not discriminatory¹³⁶ (table 1). The FCA was also concerned that in the absence of clarifying language for Guiding Principle D.5, national tobacco control measures could be challenged using GATT and WTO precedents that such measures should be ‘necessary’ and ‘least restrictive’.¹³⁷ While the FCA efforts contributed to support of this position by countries, including South Africa and WHO Africa, Eastern Mediterranean and Southeast Asia regions (table 4), it created tensions with the TFI and other countries, including the USA.

Opposition to health-over-trade: the governmental position

The governmental actors, including WHO and its TFI, WTO, World Bank, and, arguably, European Union (C Callard, personal communication, 2009; D Yach, personal communication, 2008; J Bloom, personal communication, 2009)²⁸ opposed a health-over-trade position, along with individual countries (table 4) and the tobacco industry.^{64, 66}

WHO (through TFI) and WTO continued to argue that WTO health provisions provided protection for public health and do not limit states’ regulatory autonomy to enact tobacco control measures, making an FCTC health-over-trade provision unnecessary. Although by the first IGWG meeting in October 1999 World Bank had published its Curbing the Epidemic,¹³⁸ strongly supporting tobacco control, the bank’s representative argued for a demand-side approach to tobacco control because ‘trade restrictions are ineffective’(IGWG, unpublished, 1999). The EU’s European Commission said that FCTC should be ‘in conformity with the relevant international conventions governing, for example, international trade’ (IGWG, unpublished, 1999). The European Commission consistently sought a trade provision whereby countries would have freedom to design and implement tobacco control measures and honour other international obligations, suggesting that it opposed the health-over-trade position (C Callard, personal communication, 2009; D Yach, personal communication, 2008).¹³⁹ Countries committed to trade liberalisation, such as the USA and Japan, opposed the FCTC health-over-trade provision, arguing that it conflicted with prior commitments. The US brought in trade experts from its Department of State to lobby states who favoured health-over-trade to support the US position.

No explicit trade provision: the silence position

The trade-health issue created a gulf between civil society and national delegations and organizations that agreed on most FCTC provisions (C Callard, personal communication, 2009; IS Shapiro, personal communication, 2009; J Bloom, personal communication, 2009). The silence position emerged as a compromise during INB6 as it became clear that the differences over the language of an FCTC trade provision threatened to stall the entire negotiations (C Callard, personal communication, 2009; D Yach, personal communication, 2008; IS Shapiro, personal communication, 2009; J Bloom, personal communication, 2009).

States and non-governmental organisations supported the silence position for different reasons. During INB6, Canada, who had supported strong FCTC provisions on other issues said, ‘Silence was the best route given different stands and perspective on issue around health and trade’ (INB, unpublished, 2003). Turkey, who had favoured Guiding Principle D.5 during INB2 in 2001 (table 3), indicated that ‘If silence is the choice prevailing here, we would cooperate’ (INB, unpublished, 2003). Countries that wanted a provision that would make trade interests trump public health interests (such as the USA) supported the silence position.^{50, 140} The debate among the delegates centred on the hierarchy of treaties (C Callard, personal communication, 2009; IS Shapiro, personal communication, 2009) and whether FCTC should supersede previous agreements. Unable to reach a consensus, the parties agreed to drop an explicit trade provision, but keep a statement in the preamble giving priority to governments’ right to protect public health.

The silence position was also supported by those in the public health community frustrated by the inability to secure a health-over-trade provision during INB6 (IS Shapiro, Personal communication, 2009).¹⁴¹ Shapiro wrote in the Bulletin during INB6 that FCA has ‘steadfastly supported a clear statement that the public health provisions of the FCTC should prevail over the general trade rules of the WTO when and if conflicts arise…. But if delegates can’t get it right, then it’s better to say nothing at all.’¹⁴¹ In this respect, this segment of the public health community preferred silence to Articles 2.3 and 4.8 during INB6 (tables 2 and 4), which would have subordinated the FCTC to existing international agreements, including WTO.

Those who favoured silence argued that the FCTC Preamble (table 1) and Article 2.1, (‘In order to better protect human health, Parties are encouraged to implement measures beyond those required by this Convention and its protocols, and nothing in these instruments shall prevent a Party from imposing stricter requirements that are consistent with their provisions and are in accordance with international law’¹⁸), gave countries the leverage to put public health over everything, including trade (IS Shapiro, personal communication, 2009; N Collishaw, personal communication, 2006; M Assunta, personal communication, 2008). The FCA criticised this presumption during INB5 and INB6 in the Bulletin,¹⁴² arguing during INB6 that it was ‘plainly wishful thinking’ for proponents of the silence position to ‘contend that there probably will not be conflicts between the FCTC and trade agreements’,²⁸ even as the FCA came to recognise that they were not going to get an explicit clause allowing health to trump trade.

During INB6 most of the delegations agreed to the compromise silence position (table 4), accepting the belief that future trade-health conflicts would be resolved in favour of health (IS Shapiro, personal communication, 2009; INB, unpublished, 2003; N Collishaw, personal communication, 2006), because FCTC was more recent and product-specific than WTO and would prevail under the Vienna Convention on Law of Treaties (C Callard, personal communication, 2009; N Collishaw, personal communication, 2006). Neil Collishaw of Physicians for Smoke-Free Canada, who led the WHO Tobacco or Health Program in the early 1990s and was a civil society participant in the FCTC negotiations, noted in a 2006 interview,

There was a huge amount of discussion about this clause versus that clause to put in the treaty…. The Vienna Convention on Treaty Making upholds the principle that in the case of a conflict between two treaties it is the most recent provision that prevails…. So even if there isn’t anything said there, the very fact that the [FCTC] exists creates a counter weight to economic considerations that are in the trade treaties. (N Collishaw, personal communication, 2006)

Supporters of this view also argued that the global policy environment had changed in favour of public health since the Thai Case in 1990 (C Callard, personal communication, 2009; IS Shapiro, personal communication, 2009), although the WTO Appellate Body used similar principles in the Dominican Republic Case in 2005 to cancel Dominican Republic’s requirement that tax stamps be affixed on cigarette packets and cigarette importers should place a bond (table 1).^32-34 They cited the enormous accumulation of scientific evidence on the dangers of tobacco use (C Callard, personal communication, 2009; IS Shapiro, personal communication, 2009) and the fact that in the 1998 Asbestos Case,¹⁴³ both the WTO Panel and Appellate Body rejected Canada’s challenge to France’s import ban on asbestos for public health reasons (C Callard, personal communication, 2009; IS Shapiro, personal communication, 2009). Similarly, in 2001 the Doha WTO Ministerial Declaration permitted developing countries to override patent rules under TRIPS to provide cheap drugs to deal with HIV/AIDS, tuberculosis, malaria and other public health emergencies.^{144, 145} Finally, they argued that the fact that 191 countries came together to negotiate the FCTC would create an environment in which future conflicts would likely be resolved in favour of the FCTC (D Yach, personal communication, 2008; IS Shapiro, personal communication, 2009; N Collishaw, personal communication, 2006; M Assunta, personal communication, 2008).

DISCUSSION

The relationships between international trade and public health became a contentious issue during the FCTC negotiations (table 4), resulting in the silence position.

The debate over potential conflict between the FCTC and WTO contradicted the 2002 WHO/WTO report,¹⁷ prepared to reconcile the trade-health issue amid the contention and polarisation during the negotiations, concluding that there is no inherent conflict between FCTC provisions and WTO rules.^{17, 146} The debate suggests that the tobacco companies’ activities to highlight FCTC implications for trade and WTO rules,^{77, 107, 147, 148} which coincided with broader commitment to trade liberalisation by countries, including those belonging to the Organization for Economic Cooperation and Development, had traction during the negotiations. Closely linked to the issue of potential conflict between FCTC and WTO rules was the quest to avoid a precedent in global governance that would allow countries to forgo prior obligations (D Yach, personal communication, 2008; IS Shapiro, personal communication, 2009; J Bloom, personal communication, 2009). In a 2008 interview, TFI’s executive director during the negotiations argued in a way similar to the tobacco companies’ ‘slippery slope’ argument on the trade-health issue.^{70, 125, 127}

I think many sides appreciated the fact that (a health-over-trade FCTC provision) would lose potentially the (Organization for Economic Cooperation and Development) countries, the major trading countries of the world because they would not want a conditionality like health should trump trade, because it would lead to all sorts of pressure in other areas outside of tobacco. … So they (delegates) were very careful of setting a (global governance) precedent. Of course, (health-over-trade FCTC provision) would have implications for the pharmaceuticals industry; it would have implications for mining industry. There were many industries where you could see this could have implications (D Yach, personal communication, 2008).

The potential conflict an explicit health-over-trade FCTC provision would have created among branches of government made the national delegations want to remain silent on the issue (D Yach, personal communication, 2008; IS Shapiro, personal communication, 2009; M Assunta, personal communication, 2008). In this respect, the tobacco companies’ argument that the FCTC should solely focus on public health issues,^{72, 149-151} the emphasis on the economic importance of tobacco,^{50, 57} and lobbying to get other ministries involved in the negotiations^{72, 75, 77, 150, 151} coincided with the outcome of the debate on the trade-health issue.

Policy options

Absent an explicit FCTC health-over-trade provision, tobacco control measures will be adjudicated under a trading regime whose trade-centric perspective sometimes regards national health and safety regulations as forms of disguised protectionism^{152, 153} and often resolves trade-health conflicts silently.^{11, 154-156} All that exists is the 2002 WHO/WTO report,^{17, 146} which did not affect the outcome of 2005 Honduras vs The Dominican Republic Case (table 1). The ambiguity between trade and health could limit the creativity of countries to develop innovative tobacco control measures because of concern that the measures would violate WTO rules.

The public health community should strongly advocate that the WTO interpret its health provisions broadly when resolving any tobacco trade-health conflict in a way that public health is given priority over further liberalising tobacco trade. The Philippines vs Thailand Case,³⁵ filed in September 2008 and still pending as of May 2010, may provide an opportunity for the public health community to advocate for this broader interpretation of the health provisions. In this case, the Philippines is challenging Thailand for ‘biased, partial, and unreasonable’ administration of its tobacco tax measures, which gives an advantage to the Thai Tobacco Monopoly, the main competitor of Philippines cigarettes in the Thai cigarette market, in violation of WTO rules. There also is an emerging issue concerning plain packaging for cigarettes, whereby tobacco companies have threatened to take legal actions against governments in Asia for violating trademark rules under TRIPS (table 1) should the governments attempt to enact plain packaging measures,¹⁵ but no formal complaint had been filed as of May 2010. However, similar to the 1994 case^{9, 15, 16} where Philip Morris’s threats³⁶ led Canada to abandon the policy, there is concern that the mere threat of a WTO complaint or legal action could be enough to have a ‘chilling effect‘ and dissuade countries from pursuing plain packaging. Additionally, the relation between trade and health has become contentious in bilateral trade agreements, including the one between the USA and South Korea and multilateral trade agreements, such as the Association of South East Asian Nations-Australia-New Zealand Free Trade Area. How WTO resolves the Philippines complaints and these countries settle their differences will determine whether the contention that such conflicts will be resolved in favour of health holds in practice. This effort to press for broader interpretation of the health provision under the trading regime is consistent with WHO and its TFI, WTO,^{8, 17, 146} and the tobacco industry argument that they provide protection for public health. Moreover, public health advocates need to ensure that these bilateral and regional agreements do not include terms that create new barriers to developing and implementing tobacco control measures.

At the same time, the public health community should urge the FCTC Conference of the Parties to clarify Article 2.1 by developing guidelines to explicitly address trade-health relations to remove uncertainties that member states may face in the implementation of the FCTC. In the long-term, though, the WHO can facilitate the development of a protocol to deal with the broader trade-health issue in the international system.¹⁵⁷

Conclusion

International factors, together with tobacco industry activities at the country level hampered the development of international norms on trade and health in the FCTC. The debate suggests that it is important for public health professionals to learn the international trade lexicon^{11, 17, 155, 158} and gather evidence to illuminate how international trade and trade agreements impact health. The tobacco companies and their allies in governments can be expected to continue to seek that future trade-health conflicts be settled under WTO with the expectation that they would be resolved in the industry’s favour, similar to the 1990 Thai Case. The public health community should not regard the settlement of trade-health issues as belonging to trade realm, neither should trade-health conflicts be considered as issues for only trade experts. In this respect, the public health community should actively get involved in trade-health conflicts regardless of the venue of settlement, including WTO, such as the example of an amicus curiae (friend of the court) brief¹⁵⁹ submitted by the Public Health Law Center of Minnesota in the USA in the Thai Case that was pending at the time of this paper in 2010. Public health professionals should engage the issue and press for further policy development by governments.