U.S. Foreign Policy and the Global Tobacco Trade

Written by Seth Gannon and Matt Fisher

The conclusion this week of an unprecedented UN High-Level Summit on Non-Communicable Diseases offers an opportunity to take stock of U.S. efforts against chronic disease at home and abroad. While tobacco remains the nation’s leading cause of preventable chronic disease and mortality, a recent CDC study reports that its prevalence has declined since 2005, resulting in 3 million fewer adult smokers in the United States.

Internationally, however, trends are less heartening.  The World Health Organization estimates that global tobacco will result in eight million premature deaths annually by 2030—killing one billion people by the end of the century. Perversely, this outlook is partially the result of anti-tobacco victories in the United States, as tobacco companies have increasingly turned their attention to other, less regulated markets. Given the emphasis the Obama administration has placed on global health as a strategic priority, it is important that U.S. foreign policy reflect the common-sense principles that have led to smart tobacco control domestically.

Illustrating this point, the UN High-Level Summit was not the only significant international negotiation to come to the United States this month. The latest round of Trans-Pacific Partnership (TPP) negotiations – occurring in Chicago and involving Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam – concluded last week.  In this eighth round of talks, member nations continued negotiations on a trade agreement aimed at the “economic integration of countries in the Asia-Pacific Region.”

These talks concern some health advocates, who worry about the effects of trade liberalization on efforts to reduce tobacco consumption. Representative Linda Sanchez (D-CA) recently circulated a draft letter to her colleagues in the House that calls on Ambassador Ron Kirk, the U.S. Trade Representative, to “carve tobacco out” from TPP provisions. Adopting a similar stance, Dr. James L. Madara recently sent a letter on behalf of the American Medical Association urging Ambassador Kirk to “exclude tobacco … from the TPP and all future free trade agreements.”

Thomas Bollyky, senior fellow at the Council on Foreign Relations, has noted that excluding tobacco from TPP talks entirely would be short-sighted. Complete exclusion, Bollyky argues, would “incite active TPP opposition from the tobacco industry” and would forfeit an opportunity to “balance U.S. trade interests with tobacco control priorities.” Bollyky has proposed a four-part strategy—pushing for a reduction in tobacco subsidies, a harmonization of tobacco regulations, an explicit regulatory exception for tobacco control, and an exclusion of Vietnam from reductions in tobacco tariffs.

Bollyky’s strategy seems well-suited to address the dual goals of promoting trade and reducing global tobacco consumption.

By pushing for a reduction in the subsidies that other countries provide their domestic tobacco industries—as the U.S. is phasing out its own tobacco subsidies—U.S. negotiators could bolster their free trade credentials while simultaneously advancing tobacco control efforts. World Bank economists report that government subsidies impede tobacco-control in developing countries, as the recipients of subsidies engage in self-protective lobbying. The push to reduce subsidies would also bring U.S. policy more in line with the Framework Convention on Tobacco Control (FCTC), which “encourages economically viable alternatives for tobacco growers and workers, rather than continuing subsidies.”

Bollyky is also correct to pay particular attention to Vietnam. According to the Global Adult Tobacco Survey, 31% of Vietnamese males age 15-24 are smoking. Among all Vietnamese men, that number rises to 56.1%—a dramatic and destructive epidemic.

Ideally, however, the United States would do more than simply exclude Vietnam. For U.S. trade policy to fully comport with U.S. health policy, the United States should oppose any TPP reductions in tobacco tariffs. Reducing tariffs makes imported cigarettes more affordable and brings them into competition with domestic cigarettes, “leading to reductions in the relative prices of these products and increases in their advertising and promotion.”

The connection between tariff reductions and advertising is especially pernicious. The remarkable link between advertising and cigarette smoking is well-documented, and its effects are even more dramatic among children.

Two arguments are most common in defense of reducing tobacco tariffs.

First, some have suggested that nations can compensate by increasing their domestic taxes on all cigarettes. Even if creating new taxes were politically feasible—as palatable, for instance, as maintaining tariffs that already exist—they would not fully replace the benefits of tariffs. As Donald Zeigler of the American Medical Association has observed, “elimination of import tariffs on tobacco and alcohol products could change the market dynamic and significantly undermine government efforts to reduce consumption levels and related harms … merely increasing taxes on all foreign and domestic products will not necessarily address all the market effects that come from tariff reduction.”

Second, the tobacco industry and others have argued that tariff reductions should be comprehensive, with no exceptions even in the interest of public health. Philip Morris International submitted a public comment to the U.S. Trade Representative, contending that TPP “negotiations should be comprehensive and lead to the complete elimination of all tariffs on all goods.” This argument ignores strong precedent for narrow exclusions to tariff reductions in previous U.S. free trade agreements—of sugar with Australia, rice with South Korea, and tobacco with Jordan—none of which has damaged U.S. negotiating credibility nor led to a cascade of further exclusions.

Just as free trade is beneficial for goods and services—making them more available and affordable—it has the potential to do the same for tobacco, the world’s leading single cause of death.

Thankfully, U.S. trade policy can have its cake and eat it too—successfully negotiating a complex free trade agreement among nine countries while making a small, common-sense exception to slow the tobacco trade and save lives. As a U.S. delegation went to New York this week to rightfully represent the United States as a global leader against chronic diseases, it is time for American trade policy to reflect that reality.

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