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Atlanta, Georgia: The Obama administration has done something that will cheer public health groups worldwide but anger tobacco giants.
In a surprise announcement, it has formally proposed language for the Trans-Pacific Partnership (TPP) agreement that will make it impossible for tobacco companies to weaken or overturn laws designed to curb tobacco use.
US officials revealed the formal proposal on the first evening of trade negotiations in Atlanta, Georgia, where trade ministers from 12 Pacific-region countries, including Australia, have gathered to try to conclude talks on what will be the biggest regional trade agreement in history.
The proposal will likely anger tobacco companies and US senators from tobacco-producing states, but will be welcomed by anti-tobacco campaigners and US Democrats, who say they will be more likely to support the TPP's passage through Congress if the tobacco "carve-out" is included.
The US proposal will give governments the option to prevent foreign tobacco companies from challenging anti-smoking policies in their countries by exploiting a controversial clause in the agreement called investor-state dispute settlement (ISDS), according to World Trade Online.
Such a clause has been used against Australia in the past.
When former prime minister Julia Gillard introduced plain packaging laws in 2012, the tobacco company Philip Morris used the ISDS clause in the Hong Kong-Australia bilateral investment treaty to sue the Australian government. The case is still in arbitration.
The Obama administration's proposal overnight means an ISDS clause will still be included in the TPP, but tobacco companies will not be allowed to use it to stop foreign governments pursuing anti-smoking policies.
In response to the news, Trade Minister Andrew Robb told Fairfax Media he didn't want to speculate about the issue while talks were ongoing.
"In regard to ISDS, our position is we would only consider it if the balance of the package is in our best interests. We are not at that point. Nothing is agreed until everything is agreed," he said.
But Mr Robb said he had been pushing for the TPP to include ISDS 'safeguards' - like a carve-out for tobacco companies - similar to those in the Australia-South Korea free trade agreement.
"Philip Morris is using an old ISDS [against Australia] which is twenty years or more older," Mr Robb said.
"All our ISDS deals are being progressively updated, we've got 28 deals, some have been up to 30 years in operation."
The TPP is a huge multilateral agreement between Australia, New Zealand, Canada, the United States, Mexico, Peru, Chile, Malaysia, Singapore, Vietnam, Brunei and Japan.
Its members comprise 40 per cent of the global economy and span the entire Pacific region.
After years of negotiations, the contents of which are held secret, it was hoped that a final deal may be reached this week, but event organisers have officially extended the two-day talks to three days after trade ministers failed to overcome key sticking points overnight.
