Trade Deal Threatens Alcohol Reform And Democracy

- Dr Viola Palmer

Viola Palmer is a long time CAFCA member, a retired GP and past Chairperson of the Group Against Liquor Advertising. Ed.

The negotiations for the Trans-Pacific Partnership Agreement (TPPA) threaten not only Pharmac, but also liquor reform, and our democratic autonomy. If the Government does not revamp the alcohol laws in 2011, it may be 50 or more years before we get another chance. The Trans-Pacific Partnership Agreement being negotiated in secret by the NZ government with the US and seven other countries could block alcohol reform and other public health laws for several generations.

Since 1994 free trade agreements have given increased powers to international corporations. The term “free trade” is an elaborate set of rules negotiated by governments to suit their own corporations, giving them a competitive advantage over small-scale local operations, and protecting their overseas investments. The TPPA would give foreign investors special rights, including consultation regarding new national laws, and the right to sue our Government if new laws reduce company profits. These cases are heard behind closed doors by an international trade tribunal.

Most of the recommendations on alcohol law reform made by the Sir Geoffrey Palmer’s Law Commission would be unpalatable to international liquor companies. The “five plus solution” of increased excise tax, raising the purchase age, reducing accessibility, reducing marketing and advertising, lowering the blood alcohol level for drivers and increasing treatment opportunities, are the basics of sound alcohol law. Changes that are good for the public but bad for profits could lead to the Government being sued and public health laws being derailed.

Examples Abound

Examples abound in which free trade agreements impinge on legislation. The government of Uruguay is currently being sued by Philip Morris Tobacco for passing legislation which requires cigarette packages to depict harmful effects of smoking over 80% of their surface. Philip Morris is taking this action under an investment agreement with Switzerland where Philip Morris – actually a US headquartered corporation – has an operations centre. It is a standard US demand to have investment provisions in its free trade agreements very like those Philip Morris is using against Uruguay. Philip Morris is arguing for such provisions in the TPPA.

I doubt if our smoke free legislation could have been enacted if we had been party to an agreement like the TPPA then (this was written before Philip Morris announced that it plans to use a 1990s’ Australia/Hong Kong investment agreement to try and stop the Australian government from requiring that all cigarettes must only be sold in that country in plain packaging. That makes the implications for New Zealand even more obvious, under existing free trade and investment agreements, let alone the proposed TPPA. Ed). The New Zealand government passed a law in 2005 for health and safety warnings on alcohol containers. Because of Closer Economic Relations it has been languishing with Food Standards Australia New Zealand (FSANZ) since then.

In 1997 the government of Canada passed a law to exclude MMT, a suspected neurotoxin, from petrol. The Ethyl Corporation, makers of MMT, threatened to sue the Canadian Government for $US251 million, under the North American Free Trade Association. The Government backed down, paid Ethyl $US13 million for lost profits and in effect declared MMT safe by repealing the ban. The Thai government is concerned about alcohol, the second major risk factor for death or disease. They want to exclude alcohol from the Thai-European Union Free Trade Agreement, but are under strong pressure from the EU and the liquor industry not to do so. Their plans to introduce warning labels on alcoholic drinks have also been challenged in the World Trade Organisation by a group of countries, including New Zealand.

The ability for companies to sue governments if laws impinge on their profits is an intolerable price to pay for a trade agreement. Mexican cane sugar must compete against imported high fructose corn syrup. Indians are fighting to keep their wheat seeds from Monsanto’s patents. The TPPA will affect NZ legislation on many fronts--- public health, environmental, biosecurity, and pharmaceutical. We lose a large piece of our democracy for doubtful short-term economic

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Foreign Control Watchdog, P O Box 2258, Christchurch, New Zealand/Aotearoa. August 2008.


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