Under the Dome

Tobacco draws a fight in trade deal

A trade deal would drop Japan’s pork tariffs, helping the state’s industry. But tobacco interests are concerned.
A trade deal would drop Japan’s pork tariffs, helping the state’s industry. But tobacco interests are concerned. Patrick Davison

The ink is not dry on the final draft of the world’s biggest ever proposed regional trade deal, which goes by the not-so-catchy acronym, TPP.

In fact, officials from the U.S. and 11 other Pacific Rim nations are still finalizing the documents in preparation for release soon in what would be the first public availability of the details in the complex deal that has been negotiated in secret for years.

But that hasn’t stopped the whirl of politics from weighing in on TPP’s merits, value and worth following the announcement last week that the Pacific nations had reached a final accord in Atlanta.

Get used to hearing about TPP, for it is a major initiative of the Obama administration – a key part of the president’s effort to keep China in check in Asia – and the decision-making is being pushed into next spring.

The votes, if it ever gets to that, will be made in Congress, setting up a classic lobbying and public policy fight just as the presidential campaign swings into high gear. The deal affects manufactured products; agriculture; the automotive industry; drug companies; and information and technology sectors. It includes conditions on labor and the environment and the Internet.

Think NAFTA, but bigger.

The North American Free Trade Agreement of the 1990s hammered North Carolina’s textile and manufacturing sectors, but it also boosted others, including pharmaceuticals.

TPP stands for Trans-Pacific Partnership. The trade deal includes Japan, Canada and Mexico, all major U.S. trading partners, but also countries such as Vietnam, Australia, Chile, Singapore, Malaysia, Peru, New Zealand and Brunei.

Since few have actually read the settled-upon agreement, much of what is known is based on public status updates, news and policy briefings, leaks and other such windows into the trade pact’s progress over the past five years.

Democratic candidate Hillary Clinton made news last week when she indicated that she was now positioned against TPP, with the caveat that it was “based on what I know so far.” She had previously expressed support – multiple times. Major labor unions are opposed.

Indeed, just about every special interest is weighing in. North Carolina’s pork industry, for example, and meat exporters across the U.S. have been behind the deal, which would significantly lower tariffs and open markets abroad.

Obama has been selling TPP as a major boost to the U.S. economy, and its exports. He said he believes it achieves “the best possible deal ... for American workers and American businesses.” The administration has been emphasizing that it is “eliminating over 18,000 different taxes on made-in-America exports.”

North Carolina’s two U.S. senators, Republicans Richard Burr and Thom Tillis, pounced.

The reason? Tobacco.

As the Atlanta talks wrapped, word filtered out that tobacco had been left out of a closely watched, though technical, part of the deal – what’s known as a “carve out” in the lingo of trade talks. Carving out tobacco would ensure that tobacco companies could not use a process in international law that allows them to sue other countries over possibly harmful regulations.

The rationale is that it would allow countries leeway to enact measures that are aimed at protecting the public’s health.

In tobacco, this boils down to curbing tobacco’s ability to mitigate antismoking efforts, which suppress tobacco sales. That ripples back to the farmers and fields in North Carolina and Virginia and Kentucky, home to Senate Majority Leader Mitch McConnell.

Tillis, especially, has been warning of possible efforts to exclude tobacco as being unfairly harmful to North Carolina, which he said has 22,000 tobacco-related jobs. He has appealed on fairness, acknowledging that most fellow lawmakers are not in tobacco-growing states.

The Tobacco Growers Association of North Carolina wrote to the state’s congressional delegation, saying the carve out is “alarming and un-American” in that “for the first time in history the White House is actively working to discriminate against its own farmers in trade agreement negotiations.”

The letter used words like “shocking” and “profoundly disappointed,” and the association expressed concern that an emphasis on benefits for the rest of agriculture in the deal is a “classic ‘bait and switch.’”

Most tobacco farmers are also farmers of beef or pork or some other product.

The association said “none of them supports advancing one commodity over another” in the TPP deal.

State Agriculture Commissioner Steve Troxler wrote to Washington, telling a top U.S. agriculture official that it appears no other country wanted the carve out. The whole idea seems “driven” by the Obama administration, Troxler wrote.

Troxler said about 75 percent of the state’s leaf is grown to be shipped abroad and that its value is “a large driver of our state’s economy.”

Tillis and Burr both expressed opposition. Tillis has made the carve out a litmus test, saying it sets a “dangerous precedent.”

“I will not only vote against the TPP, but actively work to help defeat its ratification in the Senate,” Tillis said.

J. Andrew Curliss

Thoughts on the TPP trade deal

Members of Congress are beginning to make up their minds on the Trans-Pacific Partnership trade deal. In interviews and statements, North Carolina’s representatives said they are considering what the deal means for the state – and the nation as a whole.

So far, the deal has been met with hesitancy from members of both parties in the state’s delegation. Here’s what they’re saying.

U.S. Sen. Thom Tillis, Republican

Opposes: “The Obama Administration has decided to use the TPP as a laboratory for partisan politics by discriminating against specific agricultural commodities. This sets a dangerous precedent for future trade agreements, and I will not only vote against the TPP, but actively work to help defeat its ratification in the Senate.”

U.S. Sen. Richard Burr, Republican

Opposes: “Over the last seven years, this Administration has consistently picked winners and losers by rigging the rules in favor of the organizations and industries they like best. Agricultural trade is critical to our nation’s economy and every sector of that industry creates jobs across the board. It is imperative that all of U.S. agriculture is treated fairly.”

U.S. Rep. David Price, Democrat

Reviewing: Price said he is reserving a decision until seeing the full text, and said he will look for its effects on businesses in North Carolina and his district. “We have a stake in big-risk international trade but we also have a stake in that trade being free and fair. In particular, we have a stake in the rules being fair, like the rules for labor, the rules for the environment.”

U.S. Rep. Walter Jones, Republican

Opposes: Most trade agreements are a “sellout of American jobs,” Jones said. “These trade agreements, it always seems like America enforces their end of the agreement, but the countries that have signed the agreement, they don’t enforce their laws.”

He added: “The very top comes out ahead, the worker comes out losing.”

U.S. Rep. G.K. Butterfield, Democrat

Reviewing: “Congressman Butterfield is reviewing the terms of the Trans-Pacific Partnership with a specific focus on the impact the deal will have on job creation in rural communities like those he represents in eastern North Carolina.”

U.S. Rep. George Holding, Republican

Reviewing: “Trade agreements like the TPP have the potential to unlock new markets and take down trade barriers for farmers and businesses in North Carolina. That said, I have serious reservations with the deal USTR agreed to in Atlanta.”

Staff Writer Liz Bell