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HHS Takes Proactive Role on Trade and Tobacco

A senior official in the Department of Health and Human Services (HHS) today (April 22) said that the department is playing a larger role than ever before in the development of U.S. trade policy, including on sensitive issues in the Trans-Pacific Partnership (TPP) negotiations like a draft proposal for a tobacco-specific “safe harbor” and the U.S. stance on issues related to intellectual property protections for pharmaceuticals.

In an interview with /Inside U.S. Trade/, HHS Assistant Secretary for Global Affairs Nils Daulaire said that, historically, the department’s role in formulating trade policy has been more marginal. “HHS’ seat at the table in the trade discussions has largely been occupied by the Food and Drug Administration, because the focus really has been on what does this mean for our regulatory regime when we have food and drugs imported into the U.S.,” he said.

But Daulaire, who joined HHS in 2010, said he did not believe that this type of engagement on a “technical level” was sufficient, especially because trade issues often intersect with health concerns. For that reason, he said he has put more emphasis on substantive engagement “upstream,” meaning while initial trade policies are still in the early phases of being formulated within the Obama administration.

“I came to the conclusion that unless we took a proactive role, and an upstream role, in discussions on trade issues with the USTR, we were going to be left in a position … of either signing off on things or raising technical concerns,” he said. Daulaire said that in the past, HHS had waited to be “the last on the clearance list” in the interagency process, and made clear in the interview that he wanted HHS to play a much larger role on health-related trade issues.

Daulaire heads up the department’s Office of Global Affairs, which is part of the Office of the Secretary. His office is focused on global health policy and has a broader perspective than the FDA, which is also part of HHS.

In the interview, Daulaire acknowledged that the department does not have as much influence when it comes to trade-related matters as other parts of the administration for which trade is the central focus, such as the Office of the U.S. Trade Representative or the Commerce Department.

“We are the new kids on the block,” he said. “I don’t think there is any question that we are starting from a fairly low base and having to demonstrate both our value and our thoughtfulness in the process.” At this point, “I would in no way consider us to be full equal players, but we are clearly actors in this dialogue,” and that in and of itself is an important development, Daulaire said.

He made a similar point when participating in an April 5 panel on global health issues at the Center for Strategic and International Studies (CSIS). “We don’t make the final decisions as to what USTR does; that is for the White House to decide,” he said at that event. “But we want to make sure, and I think it is really for the very first time, that this [health] perspective has been strongly introduced, and our secretary is deeply committed to this.”

At that event, Daulaire also highlighted tobacco and issues related to pharmaceuticals as two issues on which HHS plays a role when helping to develop U.S. trade policy.

*On tobacco, HHS has played a role in developing the “safe harbor” from tobacco-related litigation* that the Obama administration has publicly described, but not yet tabled, in the TPP negotiations. Outside observers say HHS officials were the ones that initially suggested negotiating tobacco-specific provisions in TPP, while USTR was initially hesitant to endorse special provisions for tobacco.

“We consider this to be hugely important from the standpoint of global public health,” Daulaire said, in reference to the draft proposal.

Tobacco control “is unquestionably at the very top of our policy agenda in terms of domestic health, in terms of global health, and in terms of the interface with the trade environment,” especially in light of estimates that one billion people could die of tobacco-related diseases in the twenty-first century, he said.

When asked directly if HHS was responsible for originally proposing tobacco-specific measures in TPP, the HHS official declined to answer.

“All I can tell you is that there had not been this level of engagement and attention previously, and now there is, and we are very glad for all the engagement of many different parties,” he said, adding that the fact that the U.S. draft proposal certainly reflects the increased engagement from HHS on trade policy.

The fact that the Obama administration has still has not tabled the proposal has some anti-smoking advocates nervous, although Daulaire appeared to downplay those fears. “We understand that this is moving forward,” he said. “I can’t go beyond what we can talk about publicly in terms of international trade negotiations, but let me just say that I do not feel discouraged.”

The “safe harbor” proposal would clarify that, notwithstanding other rules contained in the final TPP deal, national health authorities may adopt regulations that impose origin-neutral, science-based restrictions on specific tobacco products or classes in order to safeguard public health. U.S. business and agricultural groups strongly oppose the proposal, saying there is no need to treat tobacco products differently from other products in trade deals.

Anti-smoking advocates, on the other hand, argue that the proposal does not go far enough, and that tobacco products should be completely “carved out” from the TPP talks. In their view, tobacco products should not even be subject to tariff cuts. However, the U.S. has thus far not adopted this complete carveout approach and is currently negotiating tariff phaseouts on tobacco products in TPP.

When asked about his views on a complete carveout, Daulaire signaled his possible support, although he stressed that he had not yet made up his mind on the issue.

“I think that is something that we are talking about at this point,” he said. “I’m not a trade specialist, and the issue of carveouts is pretty complex,” he explained. While his “knee-jerk” reaction would have been to support a complete carveout, his current response is “maybe,” especially in light of his desire to learn more about the “nuance and the consequence” of including such a carveout in a trade deal, he said.

“As we move forward on this, we’ll see where this goes, but it is certainly not something that I would unequivocally say is a bad idea,”

Daulaire explained. “The public health side is very clear and straightforward on this: tobacco is bad and anything we can do to reduce its use and its promotion is good for public health.” At the same time, the administration as a whole must consider a range of issues when formulating policy, he said.

Daulaire declined to respond directly when asked whether special provisions for tobacco should be considered for other new trade agreements, including the planned U.S.-European Union trade talks, but he again signaled his possible support for the idea. “I don’t see anything with TPP that makes it unique in terms of this,” he said.

While each trade negotiation is different, he also noted that TPP is the first time that the U.S. has negotiated an agreement since passing a landmark 2009 tobacco bill.

That bill — the Family Smoking Prevention and Tobacco Control Act — was signed into law in June 2009 and gave the Food and Drug Administration (FDA) the authority to regulate the manufacture, distribution, and marketing of tobacco products. The U.S. “safe harbor”

draft proposal in TPP is essentially meant to ensure that FDA implementation of its new mandate under the 2009 law would be effectively shielded from legal challenge under a TPP agreement.

“This is also the first time that we’ve gone into a treaty negotiation since the FDA was given tobacco authority, so the ground has changed from earlier negotiations,” Daulaire maintained. U.S. tobacco control advocates are already gearing up to engage with administration officials in the EU context, and are hoping that the administration will look to table special provisions on tobacco in that context as well (/Inside U.S. Trade/, April 12).

*HHS is also playing a role in developing U.S. trade policy when it comes to access to medicines in the TPP*, although here the department’s role was initially more limited, according to Daulaire.

The Obama administration originally unveiled a proposal in this area based on an “access window” concept in the fall of 2011.The basic concept is that pharmaceutical companies would be rewarded with stronger patent protections under a TPP deal if they seek to gain marketing approval swiftly in other TPP countries. The proposal has faced skepticism from U.S. stakeholders and intense resistance from TPP partners (/Inside U.S. Trade/, March 15).

“We were not involved in the early stages of the policy that was put forward as the U.S. negotiating position,” Daulaire explained, largely because “nobody thought to ask us.” While FDA was asked to sign off on an initial version of that proposal, the concern of FDA is more limited to questions like “does this create problems in terms of the application of existing law and regulation,” he explained.

The HHS official stressed that his office is focused on the broader interest of promoting global public health. “Our concern is a broader one … and frankly, it was early in the administration, we hadn’t gotten our ducks lined up yet, and it took us a while to recognize that this was an issue” and that HHS officials should substantively engage, he said.

In light of the resistance from other TPP partners to the original proposal, however, the administration is once again engaged in an interagency process to determine whether or not it should be modified, and HHS is involved in this new round of consultations, Daulaire said.

“We have been welcomed to the table in terms of internal discussions within the administration to see whether a modified U.S. position would be warranted,” he said.

While unable to speak to the precise nature of the deliberations within the administration, Daulaire said that HHS officials “are now very much engaged in this and in these conversations and are looking for ways to make sure that public health is well protected in this process.” He said there is an “open consideration of what we can do to move things forward that is going to work both in terms of the negotiations and in terms of public health.”

This article was originally posted by Inside US Trade on April 22, 2013>