U.S. on Sidelines as Nations Launch Negotiations on Treaty to Combat Illicit Tobacco Trade

Statement of Matthew L. Myers, President, Campaign for Tobacco-Free Kids

Feb. 11 2008

GENEVA, SWITZERLAND — Beginning here today, more than 150 countries will launch negotiations on an historic international treaty to combat smuggling, counterfeiting and other illicit trade in tobacco products – a global problem that funds organized crime and terrorist organizations, costs governments billions in revenue and undermines efforts to reduce tobacco use and save lives.

Unfortunately, the United States will not have a seat at the table in these negotiations despite its significant interests in the outcome. That is because the U.S. has abdicated its leadership in the global fight against tobacco use by failing to ratify the World Health Organization tobacco control treaty, the Framework Convention on Tobacco Control (FCTC). The new treaty governing tobacco smuggling and counterfeiting will be negotiated as a critical supplement to the existing tobacco control treaty, which has been ratified by more than 150 nations. The U.S. cannot participate as a full party in the coming negotiations until it ratifies the existing treaty.

By failing to ratify the treaty and not being a party to these negotiations, the U.S. is leaving its own borders more vulnerable and sending a message to the rest of the world that the wealthiest and most powerful nation is failing to address a global tobacco epidemic that kills 5.4 million people worldwide each year.

Cigarettes are the world’s most widely smuggled – but otherwise legal – consumer product. Experts have estimated that, in 2006, illicit trade accounted for 10.7 percent of global cigarette sales, or about 600 billion cigarettes. The global scope and multifaceted nature of the problem requires a coordinated international response. There are several aspects to the problem:

• It is a public health problem that undermines nations’ efforts to reduce tobacco use and its growing burden of death, disease and health care costs. Sellers of smuggled and counterfeit cigarettes do not pay taxes on those products and therefore circumvent tax policies designed to reduce tobacco use and increase government revenue. WHO has concluded that raising tobacco taxes is the most effective way to rapidly reduce tobacco use and increase revenue needed to fund effective tobacco control programs. Cigarette smuggling and counterfeiting increase consumption, especially among price-sensitive young people, by making cigarettes available cheaply. A 10 percent increase on a pack of cigarettes is likely to reduce tobacco consumption by about four percent in high-income countries and about eight percent in low- and middle-income countries.
• It is a law and order problem, and a threat to international security. There is evidence that tobacco smuggling and counterfeiting is carried out by transnational criminal groups and has been used to raise funds for terrorist organizations.
• It is a financial problem, especially for low and middle-income countries. The illicit tobacco trade is estimated to cost governments more than $40 billion (U.S.) annually in tax revenue. This is greater than the GDPs of two-thirds of the world’s countries.

The existing treaty obligates ratifying countries, which now number more than 150, to implement effective measures to reduce tobacco use including: higher tobacco taxes; bans on advertising, promotion and sponsorship; smoke-free workplaces and public places; and stronger health warnings. The importance of these public health measures was reinforced by a WHO report on the global tobacco epidemic released just last week.

The upcoming negotiations are critical to global health and global development. The number of deaths from tobacco is projected to rise to more than eight million by 2030, with more than 80 percent of these deaths in developing nations. By effectively implementing proven tobacco control measures, and negotiating and implementing a strong illicit trade treaty to prevent the undermining of these measures, nations can reverse the tobacco epidemic and save countless lives.