A spokesman for Trade Minister Ed Fast says the government is still reviewing the proposal, along with another Malaysia tabled Tuesday that would carve out tobacco from the TPP altogether, but said it does not believe there will be any impact on Canada's anti-smoking regulations.
"Canada's ability to regulate in the public interest, including health, remains unchanged in the U.S. proposal," said Rudy Husny, press secretary to the trade minister, who last week was in Brunei for the start of the latest round in the talks.
Other Canadian officials say the U.S. proposal does not give tobacco companies any more rights to sue countries than currently exist.
They noted that under the international General Agreement on Tariffs and Trade, countries are already free to enact safety and health measures. The U.S. proposal would make that ability clear in the language, as well as call for country-to-country consultations by public health officials before any challenge is launched.
But health advocates have been hopping mad about the proposal, in part because in their view it is weaker than Washington's previous position of a "safe harbour" for tobacco control laws, and insist it does given tobacco companies the ability to challenge countries.
On Tuesday, the U.S-based Campaign for Tobacco Free Kids, backed the Malaysian solution, noting that "the tobacco industry and its allies in governments increasingly use trade and investment agreements to challenge legitimate tobacco control measures, and have done so specifically against laws adopted in the U.S., Australia, Uruguay, Ireland, Norway and Turkey."
The legal challenges are not only aimed at removing restrictions on marketing and advertising, such as plain-packaging provisions that all but eliminate the branding on cigarette packages, but "also discouraging governments from enacting them in the first place," the group's executive director Susan Liss said.
The Canadian Cancer Society's policy analyst on tobacco, Rob Cunningham, says he has not examined the U.S. proposal, but added the industry has a long history of trying to use trade agreements to block anti-smoking measures.
"Clearly the Malaysian proposal is the most certain way to ensure these trade agreements will not become a tool of the tobacco industry," he said.
The Council of Canadians also prefers carving out tobacco from the TPP, which would leave all existing tariffs on the product in place. But the group goes one step further in asking Ottawa's negotiators to lobby for an exclusion of an investor-state clause, which would make private lawsuits against governments far less likely.
"Around the world, companies are not using these (trade agreements) based not on whether they are discriminatory, they are using them to attack policies they don't like," he said, pointing to the Philip Morris lawsuit against Australia's plain-packaging regulations.
The group has also demanded the government be more forthcoming on what is being negotiated at the TPP, a trading bloc involving 12 countries in the Asia-Pacific corridor.
The United States has set the end of 2013 as a target to reach an agreement in principle, but issues like the trade in tobacco are adding an extra layer of complexity to the negotiations.
In another development, some countries are proposing different levels of tariffs on the same product for different countries as a way of dealing with sensitive areas, which could result in Canada allowing the U.S. greater access to its protected dairy market than to the other 10 countries in the TPP.