Big Tobacco, Free Trade

By Robert Weissman, CorpWatch. Posted April 17, 2001.

An international conspiracy to poison millions of men, women and teenagers around the world is killing four million people a year. By 2030, it will take 10 million lives annually, 70 percent of them in developing countries. This "conspiracy" is run by Big Tobacco: companies like Philip Morris, British American Tobacco and R.J. Reynolds, to name just a few.

If we lived in a rational world, the Bush administration's foreign policy team would focus energy and attention on how to stop the health ravages of the global tobacco trade. But we don't live in a rational world. As a result, far more is known about the Bush administration's plans to pursue a fantasy-world Star Wars missile defense system than whether the new administration will confront the global scourge of tobacco-related death and disease. In fact, the new administration has so far been silent on almost every important tobacco control policy question.

That's not surprising, given the record of key players in the administration and the strong support Philip Morris and the rest of the tobacco industry provided to the Bush campaign and the Republican Party. Critics say there is little reason to be hopeful that the administration will adopt a pro-public health posture on international tobacco control. Instead, trade considerations are expected to trump global health concerns.

Meanwhile, a growing international public health movement is advocating for meaningful tobacco control. Tobacco activists are demanding that the Bush administration oppose Philip Morris' efforts to increase overseas sales, and to support -- or at least not undermine -- efforts to negotiate an international tobacco control treaty. And they are calling attention to a series of domestic policy fights that will have significant ripple effects on international tobacco control, including conflicts over federal regulation of tobacco.

Tobacco and Trade

International trade issues are central to the world's largest tobacco company, U.S.-based Philip Morris. Philip Morris now earns more than half of its cigarette profits overseas, garners almost two-thirds of its tobacco revenues in foreign markets, and sells more than three-quarters of its cigarettes outside the United States. The company's international gains come after two decades of heavy overseas spending to advertise its products, buy newly privatized cigarette companies, set up joint ventures, and build distribution networks. (The second leading U.S. tobacco company, R.J. Reynolds, has sold its international operations, including the right to market RJR products in foreign countries, to Japan Tobacco.)

Activist concern about potential trade impacts on tobacco control has risen dramatically over the last year. They worry about both the harmful consequences of market opening measures, and that tobacco control regulations could be vulnerable to challenge in the WTO or other trade institutions. (For example, regulations that call for plain, black-and-white cigarette packaging could be considered a violation of trademark protections contained in the WTO agreement on intellectual property.) Even Ira Shapiro, former USTR general counsel, now states that he believes tobacco should be excluded from international trade agreements.

The most critical test of whether tobacco control advocates are able to win a "carve out" of tobacco from international trade agreements is likely to come during upcoming negotiations on the proposed Free Trade Area of the Americas agreement (FTAA). That agreement would effectively extend NAFTA to cover the entire Western hemisphere, except Cuba.

The new USTR, Robert Zoellick, has signaled that he intends to aggressively advance corporate interests in trade negotiations, which includes seeking fast-track negotiating authority from the U.S. Congress on the FTAA. However, he has not been forced to specifically comment on tobacco-related issues.

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