Maine Attorney General speaks to Congressional panel about legal risks for states posed by free trade agreements

September 10, 2014

(AUGUSTA, ME) Maine Attorney General Janet T. Mills was on Capitol Hill Wednesday morning to deliver remarks at the invitation of a Congressional panel focused on the impacts of free trade agreements. In particular, Attorney General Mills shared her perspective as the chief law enforcement officer for the State of Maine regarding the potential impacts of the Trans-Pacific Partnership (TPP) on state laws and other regulations.

Attorney General Mills used tobacco regulations as an example of one area where state regulations could be targeted under terms of a trade agreement. ?Maine has a strong record of protecting the public health by using a broad strategy to keep products out of the hands of kids and to shield people from second-hand smoke. Despite the great strides Maine has made in cutting smoking rates, too many kids and adults in Maine are impacted by tobacco. We cannot allow our ability to protect the public health to be undermined by a trade agreement,? Mills said.

In January Attorney General Mills was one of more than 45 Attorneys General to sign a letter calling on the United States Trade Representative to exclude tobacco products from the coverage of the TPP and other treaties. If tobacco products are treated like any other product for sale, state policies regulating tobacco products would be subject to challenge by corporations or other countries, ignoring the devastating health effects tobacco has on Maine people.

One provision of the TPP that is common to many free trade agreements empowers private investors to directly challenge state or national laws, something referred to as ?investor-state disputes.? An investor-state dispute is not heard in the courts under established legal standards but decided by arbitrators under the terms of the treaty, and can result in the imposition of large money damages.

?Recent history makes me very suspicious of these arbitration provisions.? said Attorney General Mills. Cigarette manufacturers have used NAFTA sponsored arbitration to challenge provisions of the 1998 Tobacco Master Settlement Agreement that have cracked down on marketing-related laws and bans on tobacco flavoring in NAFTA sponsored arbitrations. ?These actions by tobacco companies have required extensive litigation and the expenditure of a great deal of state and federal time and resources. These challenges defy the intent and purpose of the Settlement and undermine our deep seated interest in protecting youth from dangerous tobacco products.?

Attorney General Mills was invited by members of the U.S. House of Representatives concerned about trade matters to discuss her perspective as a State Attorney General who, under the terms of trade treaties, could be called on to help defend state laws or regulations in a legal setting outside of the normal legal system of the United States in an investor-state dispute arbitration. Chapter 11 of the North American Free Trade Agreement (NAFTA) has become the model for subsequent trade agreements, which provides an arbitration procedure for investors that are based in other countries to challenge state laws and regulations that affect the investors? way of doing business, even to challenge state court judgments, in a way that is wholly unavailable to United States citizens and businesses based in the United States.

Attorney General Mills also informed the Congressional forum about work that has been conducted by the Maine Citizen Trade Policy Commission to look at the effect of trade agreements on agriculture.

?Contemplating the proposed Transatlantic Trade and Investment Partnership and the proposed Trans Pacific Partnership, now being negotiated in secret, folks in Maine have deep concerns about protecting food safety regulations; about public procurement programs that favor locally grown foods; about ?geographical indications? which protect products such as ?Maine lobster? based on their place of origin and reputation for quality; and about our state?s milk price supports which sustains our dairy farmers. All states should share these concerns, and not only for farmers,? Mills concluded.

The panel was convened by Rep. Rosa DeLauro and Rep. George Miller. Other panelists invited to speak at the forum were Professor Jeffrey Sachs, Director of the Earth Institute at Columbia University, and was the key-note speaker, Jared Bernstein, Senior Fellow with the Center on Budget and Policy Priorities and Thea Lea, Deputy Chief of Staff for the AFL-CIO.