How a secretive trade deal could help American tobacco companies hook new smokers

Pretty soon, if U.S. representatives negotiating a secretive trade deal get their way, tariffs on tobacco in poor Asian countries will sink to zero -- and those countries will have a hard time protecting their citizens against a tidal wave of cheaper cigarettes.

Over several decades, the U.S. has relentlessly fought tobacco use. Anti-smoking ad campaigns, prominent warning labels, smoking bans and high taxes have had their desired effect: The smoking rate has been dropping for decades and this year reached a new low of 18 percent among people over age 18.

Now, the U.S. is pushing to help tobacco companies find new customers overseas, by allowing them easier access to developing countries in Asia through a sweeping trade deal that originally enhanced their ability to protect citizens, and may now do very little.

"If those markets are transformed, you are going to see an epidemic of enormous proportions among those least prepared to pay for it," says Greg Connolly, director of the Center for Global Tobacco Control at Harvard. "We're basically turning around and siding with the actual agents of that disease, and enhancing their ability to claim a billion lives in a century."

The world's four biggest cigarette manufacturers by volume -- China National Tobacco Corporation, Philip Morris International, British American Tobacco, and Japan Tobacco -- have been looking to new markets to offset their domestic losses for decades. During the 1980s and 1990s, U.S. trade officials were a big help, negotiating bilateral measures that helped pry open markets for American companies. Smoking rates soared, to the point of shaming Congress into banning U.S. agency personnel from promoting tobacco sales, which President Bill Clinton extended by executive order in 2001.

That didn't stop the tobacco companies, though. When other nations try to take steps such as limiting marketing to children and banning flavored cigarettes, Philip Morris and the others complain to the World Trade Organization that the country's actions unfairly discriminate against imported goods, as the WHO documented in a report last year. For example, there are currently cases pending against Uruguay and Australia over their decisions to require cigarettes to be sold in either completely generic or very prominently labeled packaging.

President George W. Bush strengthened the companies' hand by refusing to join the WHO's key international agreement on tobacco control and lobbying to weaken some of its key provisions, allowing international sales to take off:

The trajectory of Philip Morris' sales--with international in pink and domestic in blue. (Source: Philip Morris annual reports, collected by the Harvard School of Public Health)
The trajectory of Philip Morris' sales--with international in pink and domestic in blue. (Source: Philip Morris annual reports, collected by the Harvard School of Public Health)

President Obama was expected to help stem the flow of tobacco into developing countries with the Trans Pacific Partnership, a free trade agreement that's been in clandestine negotiations for three years now. Last May, the U.S. Trade Representative outlined a tobacco proposal (the page is down now, but it's preserved here) that would have recognized the uniquely harmful status of the substance and created a "safe harbor" for countries to regulate it within their borders. Public health advocates including Rep. Henry Waxman (D-Calif.) applauded the step, while voicing hope that it might be strengthened even further.

The proposal didn't get far, however, before facing an intense opposition campaign from companies and tobacco state legislators. They're backed supported by a U.S. business establishment that doesn't want to see exceptions created for any products on public health grounds, fearing that junk food could be next.

"Nowhere have they said publicly that they think their initial position was mistaken," says Robert Stumberg, director of Georgetown University's Harrison Institute for Public Law, of the U.S. trade negotiators. "What they've done instead is refer to the criticisms from industry, which is they are creating a precedent that would lead to a slippery slope... Everybody knows that tobacco is the vanguard for control of non-communicable diseases. If they can defend tobacco, they can defend themselves."

Finally, on Friday the U.S. Trade Representative briefed Stumberg and a group of about a dozen other academics and nonprofits on a change in policy, reported simultaneously by Inside U.S. Trade, that would get rid of the "safe harbor" against trade-related lawsuits. The Campaign for Tobacco-Free Kids slammed the reversal:

The new USTR proposal does not recognize tobacco as a uniquely harmful product or provide a safe harbor for nations to regulate in order to reduce tobacco use, as the initial proposal would have done. The new proposal states the obvious – that tobacco control measures involve public health – and then directs public health officials from the countries that are party to the trade agreement to consult each other before launching tobacco-related trade challenges.

The new plan preserves the status quo, which allows tobacco companies to sue countries over their public health measures on the grounds that they violate free trade rules.

But it also strengthens it: The Trans Pacific Partnership will also make those free trade rules a lot stronger, through provisions lowering tariffs to zero and protecting the use of trademarks (which would support a company's right to advertise). And countries that can't afford to fight trade lawsuits that can cost many millions of dollars might just not act to protect their citizens in the first place.

U.S. Trade Representative Froman said in a statement late Wednesday:

“Developed following extensive consultations with Congress and with a wide range of American stakeholders – from health advocates to farmers, representing many views on whether and how to address tobacco-related health policy measures in a trade agreement – this proposal will, for the first time in a trade agreement, address specifically the public health issues surrounding tobacco – preserving the ability of the United States and other TPP countries to regulate tobacco and to apply appropriate public health measures, and bringing health and trade officials together if tobacco-related issues arise – while remaining consistent with our trade policy objectives of negotiating a comprehensive agreement that does not create a precedent for excluding agricultural products. We will continue to keep our Congressional partners and stakeholders informed and involved as we negotiate this challenging and important issue with TPP partners, many of whom will be taking into account the same range of concerns.”

Bill Corr, the deputy secretary of the Department of Health and Human Services, also issued a statement late Wednesday:

“HHS believes the proposed tobacco language in the Trans-Pacific Partnership trade negotiation will make a difference for tobacco control and public health efforts. The U.S. Government seeks to include this language because tobacco is a unique product – it is highly addictive, always harmful to human health, and the single most preventable cause of death in the world. Recognizing these facts about tobacco through the TPP will represent an important step forward for public health in the international trade community.”

Correction: This post originally reported that the new policy would require treaty parties to take additional steps before passing laws to protect public health. In fact, as clarified in the USTR's statement, the additional step--of consulting the parties' public health authorities--would come before one country lodged a tobacco-related trade complaint against another. The post has also been edited to reflect the fact that China National Tobacco Corporation has the most worldwide sales by volume. 

Lydia DePillis is a reporter focusing on labor, business, and housing. She previously worked at The New Republic and the Washington City Paper. She's from Seattle.
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