U.S. business groups oppose exceptions in Pacific trade pact

Supporters and individual patients living with cancer, protest outside the hotel where the Trans-Pacific Partnership Ministerial Meetings are being held in Atlanta, Georgia, September 30, 2015. REUTERS/Tami Chappell

ATLANTA (Reuters) - U.S. business groups have voiced their opposition to blocking specific products, like tobacco, from rules letting foreign companies sue governments over damage to investments as Pacific trade ministers gather to finalize an ambitious trade deal.

Ministers from the 12 nations negotiating the Trans-Pacific Partnership, the biggest trade deal in a generation, will meet in Atlanta later on Wednesday to try to close the pact.

The letter, sent to TPP officials late on Monday, comes amid reluctance by some countries to sign on to rules similar to those that allowed Marlboro maker Philip Morris to sue TPP partner Australia over tobacco plain-packaging laws.

Sources close to the negotiations have said one option under discussion is to exclude tobacco from the investor-state dispute settlement rules, while Australia wants a broader exemption from litigation over health and environmental issues.

“As you all enter the potentially final hours of negotiation, we ask all of the TPP governments to reject the exclusion of products from the coverage of the TPP and its enforcement mechanism,” said the letter from the American Farm Bureau Federation, U.S. Chamber of Commerce, National Association of Manufacturers and other business groups.

“Such exclusions are unnecessary and would be highly damaging to the international rules based trading system and the prospects for the TPP,” said the letter, which Reuters saw.

Any different treatment for tobacco risks a backlash in the United States and could erode support in Congress for the TPP by upsetting lawmakers from tobacco-producing states like Kentucky.

The deal would cut tariffs and set common standards for 40 percent of the global economy.