Tuesday, 28 October 2008 1:48 AM

Tobacco in trade agreements

Firstly, let me say that it was never my intention to partake in public forums such as this but as a matter of principle since I had done so on an issue which is within my remit (vis avis the EU on EPAs and the WTO as SI Permanent Representative) I am compelled to oblige (and hopefully for the last time).

Secondly, let me apologise for the rather ineligible nature of my previous contribution - it was basically a thoughts to keyboard input.

I must with sincere gratitude thank Mr. Michael Vavala for the keen interest he has shown on this particular subject. The subject of international trade and the numerous frameworks which breathe life into it are complex but I would like to make only two observations in response to Mr. Vavala's latest contribution.

Firstly, the incorporation of product coverage in any trade agreement is one that is premised on areas of bilateral/regional interest when it comes to trade. So that, if the US and Singapore consider that tobacco products should be omitted then they could have it omitted in that specific agreement. And this is based on what they agree would constitute the principle of "substantially all trade" (SAT).

Nevertheless, one has to be cognizant of the fact that both countries as integral players in the multilateral trading sytem are both part of the WTO multilateral trading regime and other bilateral and regional or subregional trading regimes which of course subjects them to the principle of "most favoured nation" (mfn). What is offered to one country must be offered to others - so that even if a bilateral agreement between the US and Singapore ommits tobacco, there could still be agreements elsewhere to which both parties must oblige tradewise to deal with tobacco issues.

At this juncture, I must point out that reading a trade agreement, one should not be deceived by the language in the main texts because it is the schedules of commitments that provide the details. Moreover, any product can come under so many different tarriff lines (derived from the WCO Harmonized Tariffication System) depending on transformations of the product. But tobacco can be one of those products that fall under Agricultural commodities and products - and one can only recall that this was among the most difficult areas of negotiations in the now stalled Doha Round negotiations of the WTO.

Secondly, negotiations of trade agreements are more complex than one could imagine. Nowadays, its not only the trade-vis-accruable economic benefits that come to the fore. In fact, trade negotiations include consideration of various standards and conformances, public health issues, labour conditions, human rights, policies relating to conservation and sustainable development etc.etc. It is these kind of considerations which drag negotiations for so long, and as a matter of fact this is why one would find that under the GATT 94, and WTO regime there are specific agreements such as Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures etc. The purpose of these agreements being to mitigate and provide remedies where a party feels that certain measures are being used by others to tamper with trade flows. These agreements while instruments to facilitate trade flows depict that the onus for determining various measures to protect any country's citizen lies with the country. I think I had alluded to that in my earlier posting where I pointed out that liberalization of tariff lines on products including alcohol and tobacco can be done but indiscriminate internal taxes could serve as a protective measure when it comes to preserving public health and so forth. Even Article 20 of GATT 94 allows for measures that are to preserve public health, security and so forth. I would imagine that bilateral, subregional or regional trade agreements would provide similar provisos as a matter of principle if not practice.

Just as an example, although on a different product from tobacco or alcohol, the EU's requirement for Solomon Islands to meet certain standards in the production of our tuna products before eligibility for export into the EU market is the kind of situation I am referring to. The EU as an obligation to its citizens has set standards which everyone else, including Solomon Islands must meet.

So in terms of Solomon Islands participation in these trade agreements the onus lies on us to ensure we provide the health standards for the safety of our peoples. It also goes without saying that recognizing the serious difficulties we have in this context, we have always asked for assistance to help build our capacities to deal with these kinds of situations - the EU I understand has been helping us to establish a laboratory for food Standard testing.

I hope the foregoing contribution sheds some light on the goings-on in negotiations and how complex it is. I still would like to believe that the nuances of participating in trade agreements are there. I believe that with proper assimilation and management of how we as a country join into the liberalization process we can generate the economic prosperity that we need to upgrade and build our social infrastructures including health and educational facilities to better cater for the welfare of our peoples.

Finally, I thank Mr. Vavala once again for his keen interest in this subject. He and other Solomon Islanders of like-mind can rest assured that those officials who try to represent our country in negotiations of these kind of agreements always try their best inspite of contraints caused by resources and capacity.

EDITORS NOTE: H.E Joseph Ma'ahanua, Solomon Islands Ambassador to the EU based in Brussels, has had extensive experience with negotiations in the WTO. We thank his Excellency for sharing his knowledge with our audience.

Disclaimer: The views and opinions expressed in this letter/article are those of Joseph Ma'ahanua and do not necessarily reflect the official policy or position of Solomon Times Online.

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