U.S. Federal Issues

Tobacco and Trade

photo

Exclude Tobacco Products from Trade Agreements

The tobacco industry has a long history of using international trade agreements to force open new markets in low- and middle-income countries, sharply increasing tobacco use and the death and disease it causes. Increasingly, tobacco companies are also challenging measures to reduce tobacco use as violations of trade and investment agreements, threatening the authority of nations to protect the health of their citizens.

These tobacco industry tactics underscore the importance of excluding tobacco products from trade and investment agreements. These agreements should not promote or increase use of tobacco products, and they should not prohibit any nation from using its sovereign authority to protect public health by taking action to reduce tobacco use.

The United States must take the lead in excluding tobacco products from trade agreements to protect its own authority to reduce tobacco use, and to thwart the tobacco industry’s efforts to use trade agreements to undermine tobacco-control policies around the world.  Most urgently, the Obama Administration should work to exclude tobacco products from the Trans-Pacific Partnership (TPP) Agreement that the U.S. is negotiating with eight other countries.

Special Treatment for a Uniquely Lethal Product

The rationale for excluding tobacco products from trade agreements is strong and simple.  Trade agreements are intended to promote and expand trade in beneficial products. Tobacco products are universally recognized to be harmful, not beneficial.

In fact, tobacco products are uniquely lethal and highly addictive. Used as directed, tobacco products kill 1 in 2 users.

Tobacco products are the leading cause of preventable death in the U.S. and around the world.  Tobacco killed 100 million people in the 20th century.  Without urgent action, it will kill one billion people in the 21st century.  Freer trade in tobacco products directly conflicts with the goal of saving lives by stemming this global epidemic.

The goals of liberalized trade include lowering the price of products and increasing the number of consumers for them.  In stark contrast, public health measures seek to save lives by reducing consumption of tobacco products through policies such as higher taxes to increase prices, bans and restrictions on marketing, and large, graphic pack warnings that inform consumers about the disease and death caused by tobacco.

Nations across the globe have made legally binding commitments to implement such measures by signing on to the world’s first public health treaty, the World Health Organization Framework Convention on Tobacco Control (FCTC). All countries involved in the Trans-Pacific Partnership Agreement negotiations have ratified or signed the treaty.

Big Tobacco Uses Trade Laws to Fight Health Protections

Tobacco companies and their allies have been using trade and investment agreements to challenge and undermine tobacco control policies.  

In recent years:

  • Indonesia sued the United States in the World Trade Organization over a ban on clove cigarettes, which is part of a prohibition on flavored cigarettes that appeal to youth.

  • Philip Morris International sued Uruguay under a bilateral investment treaty over its laws increasing the size of warning label on cigarettes and limiting the number of variations of each brand. Uruguay adopted these policies to counter the tobacco industry’s use of the deceptive terms “light,” “low tar” and “mild.”

  • American business groups asked the Office of the United States Trade Representative to use the Trans-Pacific Partnership Agreement negotiations to prevent Australia from moving forward with a requirement for plain cigarette packaging.

  • Philip Morris International sued Australia over its new plain-packaging law under an Australia-Hong Kong bilateral investment treaty.

  • Philip Morris International has sued Norway and Ireland over legislation banning the retail display of tobacco products as a violation of European trade rules.

The United States risks having its own landmark law giving the Food and Drug Administration the authority to regulate tobacco products undermined by tobacco industry lawsuits attacking its key provisions.  Several elements of the FDA law, including the requirement for large, graphic cigarette warnings, marketing restrictions and flavoring ban, could be challenged under trade laws.  

Tobacco is simply not like any other consumer product, and should not be treated as one in trade agreements. What’s at stake is the authority of nations to take actions that literally would save millions of lives.