U.S. hopes to lower tobacco tariffs in Asia

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.

For several decades, the United States 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 18 and older.

Now, the United States 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," said Greg Connolly, director of the Center for Global Tobacco Control at the Harvard School of Public Health. "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 — Altria (formerly Philip Morris), British American Tobacco, Japan Tobacco and R.J. Reynolds — have been looking to new markets to offset their domestic losses for decades. During the 1980s and '90s, 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 did not stop the tobacco companies, however. When a nation tries 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 cases pending against Uruguay and Australia over their requirements that cigarettes be sold in either completely generic or 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.

President Barack Obama was expected to help stem the flow of tobacco into developing countries with the Trans-Pacific Partnership, a free-trade agreement that has been in negotiations for three years now. In May, U.S. Trade Representative Michael Froman outlined a tobacco proposal 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 are 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," said 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."

On Friday, Froman briefed Stumberg and a group of about a dozen other academics and nonprofit groups on a change in policy, reported simultaneously by Inside U.S. Trade, that would add steps for countries to justify restrictions on tobacco sales and 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 campaign said in a news release. "The end result is that the Obama Administration's strong commitment to reducing tobacco use in the United States will remain vulnerable to international trade challenges."

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

But it also strengthens it: The TPP 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 cannot afford to fight trade lawsuits that could cost millions of dollars might not act to protect their citizens in the first place.

Froman said in a statement late Wednesday that "this proposal will, for the first time in a trade agreement, address specifically the public health issues surrounding tobacco . . . while remaining consistent with our trade policy objectives of negotiating a comprehensive agreement that does not create a precedent for excluding agricultural products."