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FACT SHEET: TPP Tobacco Proposal

BACKGROUND

The Obama Administration sought input from stakeholders on TPP when we launched the negotiations and received many comments from health advocates, farmers, industry stakeholders, and others. The Administration also considered the increasing effort both in the United States and around the world over the past several years to regulate tobacco products. The Family Smoking Prevention and Tobacco Control Act, passed by Congress in 2009, gave the Food and Drug Administration (FDA) significant new authorities to regulate tobacco products for public health reasons. This will lead to important changes in the way tobacco products are marketed and sold in the United States. We have reviewed this input and the implications of the Tobacco Control Act carefully as we have developed a draft proposal for the TPP negotiations.

TPP TOBACCO PROPOSAL

We are currently consulting with stakeholders and Congress on our draft proposal. Below is a detailed summary of the current draft proposal, which we have prepared in order to facilitate meaningful engagement on its contents. The draft proposal has three elements:

• It would explicitly recognize the unique status of tobacco products from a health and regulatory perspective.

• As in the past, the proposal would make tobacco products (like other products) subject to tariff phase-outs, thus avoiding putting U.S. tobacco products at a competitive disadvantage and avoiding a precedent for excluding tobacco or other products from future U.S. tariff negotiations. The United States will engage in discussions regarding the elimination of tariffs and tariff rate quotas with the four countries with which the United States is negotiating bilaterally—Brunei, Malaysia, New Zealand and Vietnam. Tariffs and tariff rate quotas on tobacco and tobacco product trade with Australia, Chile, Peru and Singapore have already been eliminated or are being phased out under the provisions of our existing bilateral FTAs with those countries.

• The proposal would include language in the “general exceptions” chapter that allows health authorities in TPP governments to adopt regulations that impose origin-neutral, science-based restrictions on specific tobacco products/classes in order to safeguard public health. This language will create a safe harbor for FDA tobacco regulation, providing greater certainty that the provisions in the TPP will not be used in a manner that would prevent FDA from taking the sorts of incremental regulatory actions that are necessary to effectively implement the Tobacco Control Act, while retaining important trade disciplines (national treatment, compensation for expropriations, and transparency) on tobacco measures.