Academic journal article Duke Journal of Comparative & International Law

The Internationalization of Tobacco Tactics

Academic journal article Duke Journal of Comparative & International Law

The Internationalization of Tobacco Tactics

Article excerpt

ABSTRACT                                                           495 INTRODUCTION                                                       496 I.BACKGROUND                                                       497    A. The Tobacco Carve-Out: A Breakthrough                        498    B. The Carve-Out Form: An "Odd" Choice                          499 II.INTERNATIONAL TOBACCO LITIGATION: THE CASE OF PHILIP MORRIS     501 A. The Family Smoking Prevention and Tobacco Control Act           502 B. The Framework Convention on Tobacco Control                     504 III.GLOBALIZATION, TOBACCO REGULATION AND MULTINATIONAL    CORPORATIONS                                                    510 A. Explaining the Carve-Out Choice                                 510 B. International Adjudicatory Aspects of Multinational Enterprise    Theory                                                          513 CONCLUSION                                                         519 

INTRODUCTION

The tobacco "carve-out" in the recently concluded Comprehensive and Progressive Agreement for Trans-Pacific Partnership ("TPP") represents an important development in international law. (1) The carve-out permits TPP State members to block corporations from using the controversial investorstate dispute settlement ("ISDS") mechanism to obtain damages resulting from tobacco control measures. For the first time in recent history, an international commercial treaty of this nature and magnitude treats a particular business sector exceptionally for the purpose of legal standing in international litigation. Not only that, but this mechanism seems to be spreading across treaties. Why are governments "singling out tobacco," the industry wonders? (2) The short answer is simple: because governments can and because governments should do so.

In this Article, I deal mostly with the second part of the answer--why governments should follow this emerging trend and adopt tobacco carve-outs of this nature. Specifically, I argue that it is the industry's aggressive litigation tactics--not only the hazardous nature of this consumer product--that supports this particular type of disparate treatment before a dispute settlement process. To illustrate my point, first, I explain the nature of the carve-out in relation to a topology of legal forms employed to exclude policy areas, economic sectors or particular industries from legal obligations stipulated in treaties. I follow by using the example of Phillip Morris International ("PMI") to explain how the industry, by relying on litigation before international courts and tribunals, aims at delaying, preempting and weakening (in that order) anti-smoking regulations. The use of these litigation tactics is well documented in the United States where legal and constitutional provisions prohibit insulating such regulations from legal challenges before the courts. (3) However, given that there are few if any legal impediments to restricting these claims internationally, there is no reason for governments to allow the exportation of such provisions to international courts. Rather, governments should adopt an approach that treats this carveout as a practice for future commercial deals.

At a conceptual level, the case of tobacco litigation and the carve-out illustrate the paradoxical reality that international business and economic law may often result in the over-empowerment of economic actors, with resulting difficulties for governments attempting to regulate in the public interest. The case shows how ownership, location, and internalization of subsidiaries by Multinational Enterprises ("MNEs") provide such corporations with advantages, including the utilization and deployment of legal expertise and capacity. As international governance is taking on increasingly more contentious regulatory topics, understanding the global litigation strategies of MNEs is more pressing. Such understanding may reveal more about the real power that corporations enjoy today and how international law can constrain but also enable the use of such power. …

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