U.S. Chamber Interference in Countries’ Efforts to Reduce Tobacco Use: Country Case Studies

Australia

Dates: 2009-2011
Issue: Standardized Packaging

As the Australian government approached the finalization of standardized packaging legislation, the U.S. Chamber tried to prevent passage of the law by submitting comments on the legislation, sending a letter to the Department of Health and releasing a joint statement of opposition with other business groups — all threatening that the measures violated international trade agreements and intellectual property rights. Additionally, the AmCham in Kiev, Ukraine encouraged Ukraine to submit a complaint about the Australian legislation to the World Trade Organization. Standard tobacco product packaging has been in place in Australia since December 2012.

Burkina Faso

Evidence from around the world shows that large, graphic health warning labels on tobacco products effectively inform smokers about the health hazards of smoking, encourage smokers to quit, prevent nonsmokers from starting
to smoke and can decrease intentions to smoke among adolescents. Graphic warnings are also more effective than text-only warnings in informing populations with low literacy rates about the harms of tobacco use. Article
11 of the FCTC requires parties to adopt and implement effective measures to ensure that tobacco product packages carry large, clear, rotating health warnings and messages that should preferably cover 50 percent or more, but not less
than 30 percent, of principal display areas and that are in the parties’ principal language(s).

Burkina Faso, which has one of the lowest literacy rates in the world, passed
a law in 2011 mandating graphic warning labels covering at least 60 percent
of tobacco packaging. For four years, the government has worked to finalize regulations to implement the graphic warning labels. According to the Ministry of Health, the long delay in implementing graphic warning labels was due to interference by the tobacco industry and its allies. In January 2014, Prime Minister Luc Adolphe Tiao received a letter from the U.S. Chamber warning that the Minister of Health’s graphic warning label proposal violated international intellectual property rights and trade agreements, implying that the tobacco industry might use international trade agreements to entangle the Burkina Faso proposal in costly trade litigation, which as a low-income country it cannot afford.

Contrary to the U.S. Chamber’s claims, to date more than 70 countries and territories have mandated graphic health warnings labels covering 50 percent or more of the product package without being found in violation of international trade agreements or intellectual property rights. After significant delay, in April 2015 Burkina Faso finally issued regulations to implement graphic health warnings. The new warning labels should be on packaging by April 2016.

El Salvador

Dates: 2015
Issue: Comprehensive Tobacco Control Policies

In a letter sent by the U.S. Chamber of Commerce to the vice president of El Salvador, the Chamber questions steps taken by the Ministry of Health to strengthen implementation of the national tobacco control law stating that actions taken “go beyond the scope of the legislation, undermined legal certainty in El Salvador, and are inconsistent with the principles of the rule of law.” The Chamber asked the vice president to intervene by ensuring that the Ministry of Health consult with the Ministry of Economy, a tobacco industry supporter, when developing regulations. Despite opposition, the President signed the regulations proposed by the Ministry of Health that strengthen tobacco advertising bans, graphic warning labels and smoke-free provisions of the law. The final regulations were published in June 2015.

European Union

In 2009, the European Commission formally launched the process to revise the European Union’s (EU) Tobacco Products Directive (TPD), which provides 
a framework for EU member states’ legislative action to reduce tobacco use through tobacco product and packaging regulation. The development of a revised TPD to reflect advances in tobacco control policy was significantly delayed for five years due in large part to interference by the tobacco industry and its allies.

The U.S. Chamber and its European AmCham affiliates, expressing many of the same arguments used by the tobacco industry, intervened at a number of points during TPD negotiations arguing that proposed measures such as standardized packaging (also known as plain packaging) and large graphic warning labels would violate EU law, EU and international intellectual property law and EU member states’ international trade obligations. Instances of interference Europe included:

  • Releasing AmCham EU position papers expressing strong opposition to the TPD and, in particular, standardized packaging. Civil society advocates in Europe reported that the position papers were given to policymakers during meetings with AmCham representatives. One such paper, released in 2010, aimed to deter the European Commission from proposing standardized packaging as part of the TPD review. A 2014 paper, reportedly written by PMI, opposed EU member states’ adoption of standardized packaging and has since become the official position of the AmCham EU.
  • Sending at least three letters to EU representatives and European governments falsely arguing that proposed provisions were not based on science, violated member states’ international trade obligations and potentially endangered U.S. - EU trade negotiations.
  • Writing to the Lithuanian ambassador to the United States warning against the possible consequences of passing the TPD. The Chamber, along with other business organizations, warned the ambassador to the U.S. that Lithuania’s support of the TPD during its presidency of the European Commission could harm EU trade relations with the U.S. and violate international trade law and could potentially increase already high rates of illicit trade in Lithuania.

These activities served the tobacco industry’s objectives of significantly weakening the TPD – including the removal of standardized packaging and a ban on point-of-sale displays – and delaying its adoption. The TPD was formally adopted in March 2014, five years after the revision process started.

Ireland

Dates: 2014
Issue: Standardized Packaging

During the development of standardized packaging legislation, the U.S. Chamber was a part of a coordinated response by the tobacco industry and its allies. In March 2014, the Chamber and other business associations wrote to the Taoiseach (prime minister) urging him to rethink standardized packaging. Despite significant industry threats and lobbying, Ireland approved a law requiring standardized packaging in March 2015.

Jamaica

Dates: 2014
Issue: Large Graphic Warning Labels

After Jamaica announced that it was going to increase graphic warnings to cover 75 percent of tobacco packaging, the U.S. Chamber of Commerce wrote to the prime minister stating “that there is no scientific basis to demonstrate that [graphic warning labels] covering 75 percent of the pack will advance public health objectives. They will, however, erode the [intellectual property] rights of trademark owners, and create unnecessary obstacles to trade.” Jamaica ultimately reduced pictorial warning labels to 60 percent of packaging.

Kosovo

Dates: Comprehensive Tobacco Control Policies
Issue: Standardized Packaging

During the development of tobacco control policy, the AmCham in Kosovo convened a meeting involving representatives of the tobacco industry, policymakers and ministry representatives to discuss the provisions of a comprehensive tobacco control bill just days before a vote on the bill was scheduled. Despite tobacco industry objections, Kosovo enacted a very strong tobacco control law in April 2013.

Moldova

In 2013, the Republic of Moldova began developing amendments to strengthen the country’s tobacco control law. As proposed, the draft amendments call for improved provisions to fully ban smoking in indoor public places; require graphic warning labels to cover 65 percent of packs; comprehensively ban tobacco advertising, promotion and sponsorship; ban the sale of smokeless tobacco products and slim cigarettes; and include measures to prevent tobacco industry interference in setting and implementing policy.

Although the prime minister of Moldova approved a bill with these provisions in 2013 and submitted the draft for final parliamentary approval, the U.S. Chamber and the AmCham in Moldova have led a two-year campaign to delay and weaken the proposed legislation. Local tobacco control advocates report that the AmCham consistently pressured government officials and actively lobbied legislators throughout the drafting and legislative process in order to weaken the bill. During the drafting of the amendments, the AmCham submitted a letter to the Ministry of Health introducing proposals from BAT, JTI and PMI that if adopted would have weakened the provision. Additionally, in February 2014, the president of the U.S. Chamber sent a letter to the president of Moldova’s Parliament warning that many of the proposed amendments were not evidence-based, ignored regulatory procedures and violated Moldova’s international trade obligations.

Despite this intensive multi-year effort by the tobacco industry and its allies to derail the bill, in May 2015 Moldova’s Parliament passed a comprehensive bill to reduce tobacco use containing a total ban on tobacco advertising, promotion and sponsorships; large graphic health warning covering 65 percent of cigarette packs; and a provision for 100 percent smoke-free indoor public places and work places. The final bill also contains a prohibition on partnerships with the tobacco industry by the state. Immediately after Parliament approved the bill but before it had been signed into law by Moldova’s president, the AmCham sent a letter to the head of Parliament arguing that the law had been passed in a process not in keeping with standard parliamentary procedure and stressing the importance of the tobacco industry to Moldova’s economy. In spite of the U.S. Chamber’s two-year campaign to delay the legislation, on July 10, 2015 the president of Moldova signed the bill into law.

Download: Letter from the U.S. Chamber of Commerce to Moldova (May 2015)

Nepal

Dates: 2012-2014
Issue: Large Graphic Warning Labels

In response to the Ministry of Health and Population of Nepal increasing graphic warnings from 75 percent to 90 percent of tobacco packaging, the U.S. Chamber sent a letter to the deputy prime minister of Nepal threatening that the new warning labels were a violation of international trade obligations. As a follow-up to the letter, the U.S. Chamber facilitated meetings between a delegation of U.S. Chamber members, including PMI and BAT, and a number of ministries. In one meeting with the Ministry of Health, the delegation threatened lawsuits if the regulation was implemented. The new graphic warning labels were scheduled to be implemented in May 2015.

New Zealand

Dates: 2012-2014
Issue: Standardized Packaging

While New Zealand policymakers have been discussing the development of a standardized packaging law, the U.S. Chamber has submitted comments on the draft legislation, mobilized the AmCham in Indonesia to write letters to the Ministry of Health, and released joint statements with other business associations — all claiming that standardized packaging would violate international trade obligations and intellectual property rights. The government of New Zealand has stated that it will delay introducing standardized packaging legislation until current legal challenges to Australia’s law have been resolved.

Philippines

In 2012, cigarette prices in the Philippines were among the lowest in the world. Article 6 of the FCTC provides for the use of taxation and pricing policies on tobacco products to decrease the demand for tobacco. Evidence and experience from around the world conclusively show that increasing the price of cigarettes by raising tobacco taxes increases government revenue even as tobacco consumption declines. Consequently, the tobacco industry consistently opposes tax increases designed to reduce consumption.

In the Philippines, the U.S. Chamber and the AmCham in the Philippines aggressively fought an effort by legislators to reduce tobacco consumption by raising taxes on cigarettes. As reported by the Business Mirror, a Filipino business daily, the U.S. Chamber and the US-ASEAN Business Council argued that any effort to significantly increase tobacco taxes would "undermine the government's revenue growth targets and subsequently pose serious threats to national security,” and that "there are signs that smuggled cigarettes have already made limited inroads in parts of the country, but with the right stimulus [a significant tax increase], this situation could rapidly grow into a massive nationwide phenomenon." In a separate letter to the finance secretary of the Philippines, the U.S. Chamber stated that "exorbitant tax increases on tobacco products will stimulate persistent and corrosive growth in smuggling and other illicit trades, which only fuels organized criminal activity and its consequences." The U.S. Chamber’s arguments mirrored those made directly by tobacco companies.

Since enacting a significant tobacco tax increase in the Philippines, tobacco tax revenues in the Philippines have been higher than expected despite significant protests from the tobacco industry and its allies. In December 2014, commissioner of the Bureau of Internal Revenue Kim Hernares confirmed that higher-than-expected revenues refuted claims by the tobacco industry that the government would fail to reach its revenue targets and lose substantial revenues through illicit trade.

Ukraine

Dates: 2009
Issue: Tax

Protesting a proposal to increase tobacco taxes, the AmCham in Ukraine and the European Business Association sent a letter to a number of government officials. Ukraine passed a significant tax increase in 2009 and again in 2010.

United Kingdom

Dates: 2012-2014
Issue: Standardized Packaging

During the development of standardized packaging legislation, the U.S. Chamber released a joint statement with other business associations and sent letters to the secretary of health, prime minister and policymakers opposing standardized packaging. In one letter, the U.S. Chamber states that the “bill sends a negative message to the United Kingdom’s trading partners and undermines its reputation for the rule of law.” The UK passed a standardized packaging law in March 2015.

Uruguay

Each year, the tobacco industry spends billions of dollars around the globe on advertising, promotion and sponsorships to attract new tobacco users to replace smokers who quit or die from tobacco-related diseases. As a result, tobacco companies develop massive marketing campaigns to entice potential customers to become long-term smokers. Some of these campaigns use youth-oriented messages and images that appeal to youth.

Tobacco advertising, promotion and sponsorship (TAPS) bans reduce tobacco use, especially among young people. Article 13 of the FCTC requires parties to comprehensively ban all TAPS in accordance with their constitutions or constitutional principles. According to the WHO, at least 24 countries have implemented comprehensive TAPS bans and an additional 104 countries have taken some steps to ban TAPS. In countries that do not have complete bans, the tobacco industry continues to exploit loopholes and unrestricted marketing channels, including setting up elaborate tobacco product displays at the point-of-sale, which have been found to increase the chances that youth will start smoking.

In 2013, the president of Uruguay submitted a proposal to the Senate to ban tobacco product displays at points-of-sale. In April 2014, the president of the U.S. Chamber wrote to the president of Uruguay’s Senate, stating that the proposed ban would violate the World Trade Organization Agreement
on Trade-Related Aspects of Intellectual Property and make it difficult for "consumers, who may have less readily available information to make educated choices among different brands." The letter further argued that a full display ban would create a slippery slope that would lead to overly restrictive bans on other products and increase illicit trade of tobacco products, which would fund organized crime and terrorism. Despite pressure from the industry and its allies, the Uruguayan General Assembly passed the ban on tobacco product displays at the point-of-sale in July 2014.

Download: Letter from the U.S. Chamber of Commerce to Uruguay (April 24, 2014)