The Hill: McConnell warns Obama against tobacco carve-out in trade deal


Senate Majority Leader Mitch McConnell (R-Ky.) is warning U.S. officials negotiating a massive trans-Pacific trade agreement for President Obama not to target tobacco growers in a final deal.

[Reposted from The Hill  |  Bernie Becker and Vickie Needham  |  July 31, 2015]

McConnell said singling out the tobacco industry would set a dangerous precedent for future trade deals, in a letter to Obama’s top trade representative.

The missive from McConnell suggests that congressional approval for the Trans-Pacific Partnership (TPP), a deal with 11 other countries that is the central goal of Obama’s trade policy, could be jeopardized by the tobacco language.

Republicans from other tobacco-producing states, such as North Carolina, have issued similar threats in recent days, suggesting they could kneecap the TPP if tobacco isn’t protected.

“It is essential as you work to finalize the TPP, you allow Kentucky tobacco to realize the same economic benefits and export potential other U.S. agricultural commodities will enjoy with a successful agreement,” McConnell wrote in the July 30 letter to U.S. Trade Representative Michael Froman, who's currently in Maui for negotiations aimed at completing the deal.

Obama finished a bruising fight with Congress in June to win passage of fast-track trade authority. McConnell and Obama were perhaps stronger allies on securing fast-track than at any other point in the last six and a half years, with McConnell saying the president did an "excellent job" and that he "enjoyed working with the president."

Fast-track allows the administration to send the TPP to Congress for an up-or-down vote and prevents the deal from being amended or filibustered in the Senate.

Fast-track rules also prevent McConnell from blocking a vote on the TPP.

If either the House or Senate rejects the TPP, however, the deal won't go forward. And the fight in both chambers — but especially in the House — is expected to be tight.

Just a handful of Republican votes against the TPP could keep it from winning a majority in the House, where most Democrats are expected to oppose it, with or without the tobacco provisions.

The tobacco fight illustrates the delicate balance that Froman and the administration face in hammering out an agreement that can make it through Congress, with changes made to appease some powerful lawmakers bound to anger others.

Negotiators currently are trying to work through a series of complex issues, ranging from intellectual property protections to market access for products such as dairy and sugar.

The discussions are taking place amid the backdrop of congressional concerns over human trafficking in Malaysia and currency manipulation. 

The major issue for tobacco growers is language that would exclude their product from the dispute settlement portion of the TPP. Dispute settlement rules allow private companies to bring lawsuits against governments if they feel legal protections provided by the trade agreement are not being met.

Labeling and packaging laws for cigarette packs are increasingly contentious worldwide; many countries have passed rules aimed at curbing smoking that can prevent cigarette manufacturers from putting their brands on their cigarettes. The laws are intended to ensure anti-smoking messages and graphic images highlighting the dangers of smoking dominate the packaging.

Republicans including Sen. Richard Burr (R-N.C.) said this week that they had gotten assurances from the trade representative that tobacco would not be excluded from the dispute settlement portion of the agreement.

But lawmakers, lobbyists and other industry sources have all said this week that U.S. negotiators in Maui are discussing the tobacco carve-out with TPP trading partners.

Senior trade officials from other countries have said negotiators have yet to resolve the issue, according to reports out of Maui. One industry source said the Obama administration is pushing the exception for tobacco and warned it would be a destructive precedent. A half dozen business groups urged the administration on Friday to not support any carveouts.

A trade representative spokesman would only say to The Hill on Thursday that trade officials “are working proactively to promote the interests of American farmers and preventing discrimination against them, while ensuring that the FDA and health authorities of other countries can implement tobacco regulations to protect public health.

Democrats and public health groups have called for removing tobacco protections from the trade agreement because of the rise of smoking in developing nations.

McConnell noted in his letter that he's no newcomer to this issue, having raised it at least as early as 2012. He also noted in his letter that he has brought the issue up personally with Froman.

North Carolina and Kentucky combined to produce roughly three out of every four pounds of tobacco grown in the U.S. in 2014, according to the Agriculture Department. Just on their own, North Carolina growers harvested more than 450 million pounds of tobacco last year – or more than half the national output.

“I ask again that you not set a new precedent for future U.S. trade negotiations by negatively carving out a specific U.S. agriculture commodity — in this case tobacco,” McConnell wrote to Froman. "I have also raised my concerns about this issue to you in person.”

McConnell hasn’t been alone in pressing the case for tobacco, either. Burr joined his home state colleague, Sen. Thom Tillis (R-N.C.), in writing to Froman as well this week to lobby against carving tobacco out of TPP. Both Burr and Tillis were among the 60 senators to vote for fast-track authority.

Tillis also went to the Senate floor on Thursday to warn that he would “work hard” to defeat TPP if negotiations continued “on its current path.” He added that he would be happy to team up with other senators to ensure that their home state industries weren’t targeted in future trade deals.

If tobacco wasn't protected in a final deal, Burr added, “it means that I will fight tooth and nail" against TPP.

Another North Carolina Republican, Rep. George Holding, is leading a similar fight in the House, having made similar warnings to Froman in a letter this week signed by more than 30 GOP lawmakers.

There are clear signs that House GOP leaders are supporting that effort as well.

Rep. Patrick McHenry (R-N.C.), the House’s chief deputy whip, and Rep. Pat Tiberi (R-Ohio), a key ally of Speaker John Boehner (R-Ohio) and Ways and Means Chairman Paul Ryan (R-Wis.), both signed Holding’s letter.

Tiberi, the chairman of the Ways and Means subcommittee that oversees trade policy, cast the issue as one of simple arithmetic. “Unless we’re going to get some new votes somewhere else,” he said this week.

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