industry documents and international issues

[Robert Weissman <rob@essential.org>]

Following is a rather long article we published recently (July/August
1998) in Multinational Monitor that highlights industry documents that
have to do with tobacco issues outside of the United States. The article
includes at least some information that should be of interest on topics
relating to political influence in the developing countries, Latin America
(Mexico, Argentina, Uruguay), China, marketing in developing countries,
labeling in developing countries, WHO, ETS in Asia, and the domino effect
of tobacco regulations in one country encouraging them elsewhere.

There are citiations to bates numbers throughout the article -- an
explanation appears at the end of the piece which explains how you can
find the referenced documents on the web. 

Unfortunately, we have not yet managed to post this issue of the Monitor
on the web. When we do, I'll post a notice.

Robert Weissman
Essential Information			|   Internet:	rob@essential.org


Big Tobacco Goes Global
Multinational Monitor, July/August 1998
by Robert Weissman

A. Assault on the Third World

"Whatever you may think is happening to the cigarette market of the USA
and the UK, the tobacco business world-wide is still very much a growth
business and BAT distinguishes itself from the world average growth rate
of 2.5 percent by growing at a point or two above this."

	So declared the then-chair of BAT, Peter Macadam, in an address to the
American Chamber of Commerce in London in 1980 <BAT100506546/6551>. In
the nearly two decades since that speech, the international markets have
taken on ever greater importance for the tobacco multinationals. Philip
Morris and R.J. Reynolds, the two leading U.S. companies, sell nearly
two-thirds of their cigarettes in foreign markets, and earn nearly half
of their profits overseas.

	The tobacco papers disclosed in connection with the Minnesota
litigation provide additional insight into just how highly Big Tobacco
values markets in the Third World and Eastern Europe and the former
Soviet Union, the steps it has taken to thwart international tobacco
control activism, its broad market development strategies overseas, its
efforts to block national tobacco control legislation and more. But as
revealing as they are, because the disclosed tobacco papers are those
requested by the state of Minnesota in relationship to its litigation,
the documents provide only a glimpse into Big Tobacco's overseas
strategies and activities. What is undoubtedly the overwhelming majority
of important industry documents relating to the international market
remain sealed in industry file cabinets.

Fear of the domino effect

Following its practice in the United States on domestic issues, the
tobacco industry has moved rapidly to confront any upsurge in
international tobacco control activities, whether they come from
U.S.-based activists concerned about international issues, or activists
in other countries focusing on international issues or on domestic
tobacco control. 

	One special reason for rapidly addressing any overseas tobacco control
measure has been industry fear of the domino effect: the notion that
strong regulations in one country will serve as an example for similar
measures elsewhere, including perhaps the United States. 

	"A policy whereby the Institute is involved in combating the intensive
foreign anti-cigarette activity is necessary, because there has been no
abatement of such activity, which bids fair to go to such extremes that
harsh measures will be taken that will become precedents for similar
measures in this country," wrote the Tobacco Institute, the industry
trade association and political representative, in a 1973 draft
memorandum proposing that it undertake a new program to address overseas
issues <RJR502429369/9373>. 

	A similar sentiment appeared in a Philip Morris analysis of an industry
legislative campaign in Argentina: "The impact of anti-tobacco
legislation may have a domino effect in neighboring countries.
Congressional approval of restrictions such as those contained in
Argentina's Neri Bill can inspire other governments in the region to
adopt similar legislation. Similarly, a presidential veto in one country
can influence initiatives in nearby countries" <pm2023005316/5320>.

	The industry has gone to extraordinary lengths to monitor and
counteract the effect of the tri-annual World Conference on Tobacco or
Health. Hundreds of internal industry papers report on what was
scheduled to take place at the conferences, what actually happened, who
attended and how much media coverage they received.

	In anticipation of the fourth world conference, in 1979, the industry
established a special task force to monitor and counter the efforts of
tobacco control advocates. A subcommittee proposed a long list of
surveillance and high-level political and public relations actions:

	* "Public relations agency to provide names of Third World delegates to
the conference."

	* "Contact to be made through appropriate channels with: Agricultural
Ministers of influential tobacco-growing countries to enable them to
communicate the commercial interests of their respective tobacco
industry to their official Health Ministers attending the conference."

	* "Oblique/indirect contact to be made with WHO [World Health
Organization] governors from Third World countries to suggest to them
that the extreme WHO anti-smoking position could be detrimental to the
well-being of their countries."

	* "Position papers to be prepared for modification during the
Conference on Third World accusations. Timely distribution will then be
made to lead companies in Third World countries."

	* "Contact may possibly be made with FAO [Food and Agricultural
Organization] (as natural ally) with the view to asking FAO to write WHO
in advance of Conference and possibly to send a telegram during the
Conference" <pm2501015341>.

	A follow-up memo, written a month later in February 1979 by a Philip
Morris executive, indicated that the industry was proceeding with its
delegate monitoring ("I have been told that the number of definite
acceptances is as yet very, very limited, and that a first list will
probably not be available before April 20"), preparation of position
papers and contact of agricultural ministries. The memo expresses some
uncertainty about the wisdom of approaching FAO <pm2501015287/
5288>.

 	The internal industry papers show ongoing industry concern with the
activities of the WHO. The 1973 Tobacco Institute proposal suggesting
expansion of the Institute's activities to include international
matters, for example, asserted that "The foreign anti-cigarette activity
is largely a result of constant preaching by the World Health
Organization delegates, who return home from conventions on smoking and
health to badger their governments into taking action against tobacco"
<RJR502429368/ 9371>. As the World Bank in the early 1990s decided to
abandon support for tobacco projects and support tobacco control
measures as a matter of sound economic development, Philip Morris
worried in a 1992 memo about "the integration of the World Bank into the
anti-tobacco-front formed mainly by WHO <PM2028464078>. (To head off the
Bank joining anti-tobacco forces, the Philip Morris memo suggests,
"Shouldn't we react maybe by alerting tobacco-growing countries, farmers
unions, etc?") 

	One industry response to its concern about WHO has been to smear the
agency. The Philip Morris files contain a fax from the PR firm Burson
Marstellar of a 1989 paper by Paul Dietrich, a Catholic University
researcher, attacking WHO "for funding wasteful programmes and top-heavy
monument addresses rather than the critical health issues in the
developing world" <PM 2501047810/7812>. Atop the paper is a notation
that it should be circulated to tobacco trade press, travel trade press
and feature editors.

Labeling concessions

The industry papers are replete with detailed rationalizations of
tobacco companies' overseas behavior, many prepared as backgrounders for
dealing with media questions. "The Activities of Philip Morris in the
Third World," for example, asserts that the company follows the laws of
countries in which it operates, that its ads do not encourage smoking
but only lure smokers from other brands and that the tobacco business
creates jobs, raises taxes and helps the economy <pm2015006010/6021>. A
Brown & Williamson draft letter makes similar points, adding that
tobacco exports from the United States help the U.S. trade balance
<BW536502252>. The same language is recycled again and again, in policy
fights in countries across the globe.

	Much more interesting than standard public relations stonewalling is
top-level discussions within Philip Morris of the idea of adding
U.S.-style health warnings on all of its exported cigarettes. In a July
24, 1991 memo, Murray Bring, counsel to Philip Morris and a lawyer at
Arnold  & Porter, a top Washington, D.C. firm suggested to Michael
Miles, then Philip Morris CEO, "that we should consider placing health
warnings on all of our exported cigarettes" <PM2023003838>.

	"I have been in favor of doing this for some time," Bring wrote. "I
believe that doing so would improve our litigation posture somewhat in
the product liability area, and would eliminate a focus of considerable
criticism from health organizations, shareholders and even some friendly
members of Congress." 

	He added that when Geoffrey Bible -- the current CEO of Philip Morris
-- headed Philip Morris International, "he had just about concluded that
it would be sensible to place warnings on all exported cigarettes."
Others, he wrote, including former CEO Hamish Maxwell, have not
"object[ed] to the concept, in principle," but "have felt that we should
not make this concession without getting something for it in return. For
example, we might be able to use it as a bargaining chip in legislative
negotiations."

	Bring followed up in October 1991 with another note to Miles urging
again that Philip Morris, quietly and voluntarily, add health warnings
to its exports. He suggested issuance of a statement of policy that
"Starting [date], all cigarettes exported by Philip Morris contained
health warnings. To the extent that those warnings are not required by
local law, we have placed the rotating United States Surgeon General's
warnings which are required under U.S. law. "The warnings are set forth
in the language of the country to which the cigarettes are being
shipped" <PM2023003853/3854>. Philip Morris did in fact place labels on
its exports, although it appears the company uses English language
warnings rather than those in the language of the recipient country.

Sabotaging public health

The industry has succeeded in aggressively organizing to stop numerous
tobacco control initiatives in Latin America, through methods detailed
in the tobacco papers.

	A Philip Morris document, "Veto of Anti-Tobacco Law, Case Analysis:
Argentina," describes an industry-orchestrated campaign to defeat a
far-reaching legislative proposal to eliminate tobacco advertising and
promotion, and to restrict smoking in public places <pm2023005316/5321>.
The bill passed the Argentine lower house in 1990 and the upper house on
September 30, 1992, leaving the president with 10 days to veto the
legislation or it would become law. "Industry's objective was to create
an atmosphere in which presidential veto would be politically
acceptable," the analysis states. Immediately, the industry activated an
alliance of advertising agencies and others formed following passage of
the bill by the lower house in 1990. "On October 5, tobacco industry
organized a closed door working session with media owners, sports
figures, advertising executives and other interested parties to initiate
a campaign in favor of a presidential veto," according to the analysis.
The result: "129 articles appeared in newspapers and magazines between
October 1-15 of which 105 were favorable to the industry's arguments.
Total estimated cost of coverage if media space and time had been
purchased: US$2.8MM." On October 13, President Menem vetoed the bill.

	Among the conclusions of the Argentine case study: "When a crisis
situation emerges, such as the Argentine Congress' approval of tobacco
advertising ban, a rapid response is essential. A contingency plan which
clearly defines the role and responsibilities of each affected party is
a prerequisite to effective, broad based counteraction."

	Similarly, in Uruguay, a Philip Morris memo reports on a successful
effort to head off proposed tobacco control legislation. "During the
course of the past six months, the tobacco industry in Uruguay has
demonstrated how industry-government deliberations can lead to a
successful resolution," states a December 1982 memo <pm2023274146/4148>.
Following proposal of a bill to ban tobacco advertising, require health
warnings and restrict sales to minors, "Abal Ilnos., SA working with
other industry members through the local cigarette manufacturers
association took immediate action," contacting members of the
parliamentary committee working on the bill and working closely with
advertisers. "After a series of negotiations, the Public Health
Commission of the State Council repealed the proposed legislation to ban
advertising."

	In each of these cases, well-organized industry associations played a
key role in defeating public health legislation. The importance of local
industry organization in Third World countries had long been impressed
on Big Tobacco. In a hand-written note at the bottom of a 1970 memo from
a Mexican cigarette manufacturer, a writer who appears to be a Philip
Morris official states, "suggest if not already so constituted Mexico
City manufacturers form a group of themselves to adequately represent
industry. We have learned many lessons in countries. Prevention at
minimum alleviates and buys time" <pm10051238982>.

Fighting the ETS Asian contagion

In the United States, the tobacco industry has faced some of its most
difficult challenges with the second-hand smoke (also referred to as
passive smoking or environmental tobacco smoke, ETS) issue. The tobacco
papers show it fears the spread of the issue to other countries.
Notably, a February 1990 report titled "Asia ETS Consultant Status
Report" describes an elaborate joint effort by Philip Morris, R.J.
Reynolds, British American Tobacco and also Japan Tobacco to develop a
roster of Asian scientific consultants who could refute public health
activists' claims about the hazards of second-hand smoke
<PM250048976/8999>. The target countries for finding consultants were:
Hong Kong, the Philippines, Taiwan, Korea, Japan, China, Malaysia,
Singapore and Indonesia.

	"One key objective of the project has been to recruit and educate
scientists who then would be available to testify on ETS in legislative,
regulatory or litigation proceedings in Asia or elsewhere," the report
states. 

	It explains: "This objective was based on recognition of the fact that
there were essentially no local scientists with a background in ETS
issues and that experience elsewhere has shown that it is essential to
have credible, local scientists prepared to speak out when ETS becomes
an issue, which often occurs on short notice."

	Among the initial consultants, according to the report, was Dr.
Wongphanich in Thailand. "Although not expected to act as a full-fledged
consultant, our consultant relationship with Dr. Wongphanich was agreed
to because of her position as president of the Asian Association of
Occupational Health and her potential, partly as a consequence of that
position, to support our activities in the Asia region." The project
also recruited the expected successor to Dr. Wongphanich as president of
the Asian Association of Occupational Health.

	An example of the kind of research the consultants were expected to
undertake was the "Asia Cities Monitoring Project," which would monitor
air pollution in Asian cities, with the findings used to argue that "air
pollution (particularly pollution from motor vehicles) is a serious
problem in the target Asian cities and that the much less serious indoor
air pollution problems that exist in those cities are, in turn, caused
largely by pollutants that are generated outdoors."

	Reporting as the project was moving into its second year, and following
extensive efforts to "orient" the new consultants through industry
conferences and exposure to industry-chosen scientific papers, the
project coordinators were optimistic about the future of project.
"Having now achieved a reasonable command of the relevant literature,
and with a substantial level of enthusiasm for the project, our
consultants are prepared to do the kind of things they were recruited to
do -- which, in the final analysis, is the project's real test."

B. Philip Morris in China

For nearly a century, China has represented the Holy Grail for
multinational tobacco companies. But with Communist China's market
closed for more than four decades, Big Tobacco allowed its attention to
stray elsewhere around the globe. 

	By 1993, Philip Morris concluded that the Chinese market opening was
real, and "a bigger opportunity than we'd really focused on," according
to a November 1993 memo from company CEO Michael Miles
<pm204698206/8207>. Comments by company director and media mogul Rupert
Murdoch, as well as a BusinessWeek story describing General Electric's
Jack Welch's emphasis on China, Miles wrote, "doesn't 'prove' it's there
for us, but it certainly indicates that our sense of a truly huge
opportunity is shared by some other, very savvy international
businessmen." Miles implored fellow executives "to at least think big,"
suggesting some consideration be given to the idea that Philip Morris
offer "something in the billions for all or part" of the China National
Tobacco Company (CNTC).

	Three sets of Philip Morris three-year plans for China, all written in
the 1990s, plus marketing analyses, suggest three company preoccupations
-- gaining rights to produce in China, marketing and pricing issues --
plus some concern about a nascent anti-smoking movement in China.

Entering china

The first challenge confronting Philip Morris, as well as the other
tobacco multinationals, is entering the China market, given government
restrictions on imports and foreign investment.

 	Although the company's strategic plans show a desire to work with the
U.S. government to open the market to imports, the company plans to
expand its market share through locally manufactured cigarettes. "Over
the long term," notes the 1992-1994 plan, "local production appears to
be the only means through which we can gain broad access to the total
Chinese market, as any growth in the domestic import segment will be
severely limited by the tight foreign exchange controls and import
quotas imposed by the CNTC to protect the Chinese tobacco industry"
<pm2504007940/7964>.

	For the foreseeable future, local production would be through joint
venture agreements with the CNTC. The 1992-1994 Philip Morris plan notes
that BAT, RJR and the South African Rothmans all had cooperative
arrangements with the CNTC. Philip Morris' arrangements at the time
included two factories at which it was providing technical assistance.
Closer ties had been thwarted by a conflict over Marlboro licensing
disputes. Philip Morris has since entered into much closer joint venture
agreements with the CNTC.

Masculinity & Marlboro marketing

The Philip Morris files describe extraordinary market research and
promotion activities, and reveal the company's stunning success in
promoting brand recognition for Marlboro.

	A marketing review by Philip Morris Asia shows a gigantic leap in
smoker awareness of Marlboro <pm2504052490/2501>. In 1981, 42 percent of
smokers in Guangzhou, the southeastern city formerly known as Canton,
were aware of Marlboro; that number soared to 100 percent in 1991.
Marlboro brand recognition in Shanghai jumped from 57 percent to 99
percent over the same period. And in Xiamen, the Marlboro brand
awareness rate rose from 28 percent in 1981 to 99 percent a decade
later. 

	British American Tobacco's 555 brand, Marlboro's major direct foreign
competition in China, achieved similar leaps in brand recognition,
rising from 36 percent in Guangzhou, 8 percent in Shanghai and 37
percent in Xiamen to 98, 91 and 99 percent respectively.

	These spikes in brand awareness of Marlboro and its chief competitors
were the result of determined efforts by the foreign tobacco
multinationals to publicize their brands aggressively and to attach
certain images to them. The companies  monitored the success of these
efforts through careful research such as that documented in a Philip
Morris "Premium Brands Study," based on a door-to-door study of 500
random smokers in Shanghai <pm2504019119/9149>. That study concluded
that "Marlboro has no clear edge over 555 with regard to product image,
class and trendiness. However, Marlboro is stronger in terms of
masculinity and youthfulness."

	The Philip Morris papers show significant concern over the competitive
challenge of 555, also known as SE 555. "SE555 is close behind our heels
in terms of marketing expenditure," says a presentation on the 1994-1996
Philip Morris plan for China <pm2504033297/3321>. "SE 555 builds huge
outdoor signs to create a 'big brand' image and is aggressive at retail.
It's also active in sports sponsorships."

	To meet the 555 challenge, the Philip Morris documents show company
plans to capitalize on Marlboro's "American" image, to build its
association with youthful vitality through sports sponsorships and to
rely heavily on television advertising:

	* "We will continue to run Marlboro Country theme advertising, in
addition to the World of Sports program," says the 1992-1994 plan.
"Publication of a regular Marlboro World of Sports magazine is being
evaluated." <pm2504007940/7964> The 1994-1996 plan reiterates these
plans, emphasizing soccer as the company's major focus
<pm2504033297/3321>.

	* "We will maintain [Marlboro's] extensive media mix, with particular
focus on wide-reach media like television to stimulate consumer demand,"
says the 1991-1993 plan. "We are also exploring possibilities for
sponsorship of a breakthrough event that would benefit us through
increased government contacts and widespread favorable publicity"
<pm2500098237/8268>.

	* Versus 555, "Marlboro has a high brand awareness, and the Marlboro
Country represents American heritage which is aspirational to the
Chinese consumers," according to a presentation of the 1994-1996 plan
<pm2504033297/3321>. "Our brand is in a better position to appeal to
young adult smokers. We also have a strong leadership on TV, the most
effective medium."

	* "Our strategies behind Marlboro are to strengthen the young and
modern image of the brand," says the presentation of the 1994-1996 plan
<pm2504033297/3321>. "We need to add aspirational value by promoting its
international image. We will also focus promotions behind the box
packaging to project quality and prestige."

	Philip Morris has also sought ways to introduce other brands in the
Chinese market, including especially Parliament. "Parliament's imagery
appeals to consumers' aspirations for upscale western life styles," says
the 1991-1993 plan, "and we believe the brand has good potential in
Northern urban cities like Shanghai and Beijing, where living standards
are higher than average" <pm2500098237/8268>.

	The relative prosperity that many Chinese citizens have enjoyed in the
last decade is heavily concentrated in eastern coastal areas, and so are
Philip Morris marketing efforts. A presentation on the 1994-1996 Philip
Morris plan for China effectively writes off the Chinese interior:
"Under the austerity program [of the Chinese government], remote inland
provinces will be hard hit by recession. Consumption power will be
weakened. Therefore, we must rationalize our marketing resources to
focus on priority markets" <pm2504033297/3321>.

	The 1994-1996 plan identifies four key markets: Tianjin (located
outside of Beijing), Shanghai, Guangzhou and Shenzen, a city bordering
Hong Kong. It also designates seven cities as secondary markets, all but
one on the eastern coast. 

The Price of Success

For all its marketing success, pricing remains a serious issue for
Philip Morris in China. Marlboro and Parliament are in the premium range
of the cigarette market, and face competition not only from other
premium cigarettes, but also from lower-priced products hawked by the
CNTC. Brand choice is price sensitive, the Philip Morris papers show,
but the problem for the company is that it does not control crucial
price-determining factors.

	Bumps in price in 1993 led Marlboro smokers to switch to lower priced
local brands, according to the presentation of the 1994-1996 plan.

	The restrictions on domestic manufacturing has meant that foreign
cigarettes sold in China are largely imports. As a result, import taxes
can have a decisive effect on product price, and the Philip Morris
strategic plans show company efforts to persuade the government to lower
tax rates.

	Changes in the exchange rate, the 1994-1996 plan presentation explains,
will significantly determine sales opportunities. In fact, China's
currency has slightly appreciated from the estimate used in the
presentation, meaning U.S. imports such as Marlboros are relatively
cheaper for Chinese customers.

	While seeking to manage external factors that increase price, the
strategic plans show, Philip Morris has also sought to increase price
gradually to improve profitability without price shocks that would cause
Marlboro smokers to switch brands.

Countering anti-tobacco sentiment

The Philip Morris papers also document some slight concern with the
growth of anti-smoking sentiment China, almost surely a more substantial
concern for the company now than at the time the available strategic
plans were written.

	Still, the tobacco industry is nothing if not always prepared. The
1991-1993 plan in particular reports company strategies to address an
upsurge in anti-smoking sentiment in a country where almost 90 percent
of men (but few women) smoke. Most disturbing, perhaps, is the
suggestion that Philip Morris will spur the CNTC -- which in the early
1990s was open to collaborating with foreign public health advocates on
developing tobacco control measures that would deter smoking and limit
the influence of foreign companies -- to develop aggressive pro-smoking
initiatives.

	"Though immediate impact is not likely, we are preparing for increased
anti-smoking activities," says the 1991-1993 plan. "Our key action will
be to strengthen cooperation with CNTC, especially in sharing with them
our expertise and resources to counter anti-smoking initiatives."

C. The USTR Connection

Following the Reagan and Bush administration's widely condemned practice
of using the threat of trade sanctions to break open Asian markets for
tobacco, the Clinton administration swept into office in 1993 with a
promise that it would not promote tobacco exports. 

	In practical terms, this promise primarily meant that the Office of the
U.S. Trade Representative (USTR) would not push parochial tobacco
interests in bilateral or multilateral trade negotiations. It also would
govern the activities of a wide range of other government agencies,
including the State Department and U.S. embassies around the globe.

	In 1996, the U.S. embassy in Thailand appeared to violate the informal
policy with a strongly worded letter demanding that the Thai government
provide a cost-benefit analysis to justify an ingredient disclosure law.

	Now internal tobacco industry documents show not that the USTR violated
the no-tobacco promotion policy, but how USTR officials expressed regret
about not being able to advance tobacco companies' interests and advised
Big Tobacco on how to work around the no-tobacco policy.

Dancing with USTR

Mickey Kantor, a tobacco industry lawyer, worked as the Clinton
administration's first U.S. Trade Representative. He recused himself
from all tobacco-related issues, putting Deputy USTR Charlene Barshefsky
-- the current U.S. Trade Representative -- in charge of tobacco
matters.

	The Philip Morris papers show that, in May 1993, Leo Burnett Worldwide,
a key tobacco industry public relations firm, arranged a meeting with
Barshefsky and USTR staff to discuss a proposed tobacco ad ban in Taiwan
<pm2500052165/2166>. Representatives from the tobacco industry did not
attend the meeting; instead, Big Tobacco's interests were represented by
the International Advertising Association, the American Association of
Advertising Agencies and Hearst Publications.

	"We discussed first the importance of USTR representing market access
for freedom of commercial speech in trade negotiations with other
nations generally," says a Leo Burnett letter to Philip Morris Asia's
director of corporate affairs. "We then discussed the specific Taiwan
situation, explaining that it was an advertising issue, not a tobacco
issue."

	"Ms. Barshefsky was intrigued by our positioning of the issue at a
distance from a pure tobacco industry issue," the letter adds. 	

	Barshefsky "encouraged" the tobacco industry's proxies "to again write,
as we did last fall, to everyone in the administration who plays a role
in determining American trade policy," according to the letter.

	"We didn't win, but we are farther away from losing than we were before
we had this meeting."

	In August 1993, Craig Fuller -- a tobacco industry lobbyist and close
adviser to former President George Bush -- met with USTR officials to
discuss a range of issues. A memo from Fuller <pm2046988364> reports
that the USTR officials asked Philip Morris for help -- to forestall a
major political fight over approval of Most Favored Nation (MFN) trade
status for China. "USTR's representatives were most interested in having
us do anything we could to comment to both U.S. officials and Chinese
officials on the importance of having clear steps defined and taken to
avoid a crisis over MFN."

	But while USTR officials were eager to help Philip Morris on
beer-related issues, Fuller was told not to expect help on
tobacco-related business. "We were informed that despite personal
feelings to the contrary, USTR career officials are under instructions
not to engage in any discussions regarding tobacco issues."

Supporting USTR

Whatever the efforts to circumvent the Clinton administration's tobacco
and trade policies, the cigarette makers must have been disappointed
with the change from the battering-ram style of the Reagan/Bush USTR.
Under Republican rule, the USTR forced open tobacco markets in Japan,
South Korea and Taiwan. 

	The effect was stark: according to a General Accounting Office (GAO)
study, smoking rates rose from 18 to 29 percent among teenage boys in
South Korea in the single year after South Korea opened its market to
U.S. cigarettes. The rate among girls quintupled, to 8.7 percent, in the
same year.

	With the Bush USTR eagerly knocking down trade barriers in Asia, the
task for industry was not to persuade USTR to take action, but to
provide the agency with political space to do the industry's dirty work.
Philip Morris created a USTR task force and a full-fledged "USTR Support
Plan."

	Philip Morris was particularly worried about the then-pending GAO
report and the adverse publicity it might generate, as well growing
involvement of U.S. and Asian tobacco control groups in protesting the
actions of USTR.

	The task force "agreed we should implement a plan that would have PM,
other U.S. tobacco companies and third parties more aggressively tell
our side of this story both here and in Asia," according to a June 16,
1989 memo <pm2023263571/3575>.

	In a follow-up June 19 memo, Philip Morris articulated its USTR support
plan, relying on help from the PR firm Burson-Marstellar and the
well-connected law firm Arnold & Porter <pm2023263568/3570>. The memo
outlines plans to: prepare brochures for distribution in Congress and
the public; commission studies on the U.S. economic benefits of
cigarette exports and on Asian cigarette consumption trends; develop
material for U.S. embassies; design press material for Asia and the
United States; write opinion pieces for daily newspapers; prepare print
ads "for possible use if the issue escalates;" write a comparison of how
other industries use USTR; "ask our friends in Congress to contact the
GAO and either add to the scope of the current investigation or begin
another investigation focusing on a wider range of issues;" and rely on
Burson-Marstellar "to try to find an expert on the changing lifestyles
of Asian women to show that smoking is only part of a larger picture."


----------------------------------------

Finding the documents on the 'net All of the documents referenced in this
article can be found on the World Wide Web using the following key: 
        Commerce Committee Site: All documents referenced with PM, BW, TI,
RJR are located on the House Commerce Committee's web site at
http://www.house.gov/commerce/TobaccoDocs/documents.html. After arriving
at the site on a web browser, click on the appropriate company link under
the heading "39,000 Documents Released April 22, 1998." In the screen that
appears, type in the document's "Bates numbers." In order to view the
documents some users may need to download the special TIFF or Adobe
Acrobat viewer plug-ins available on the Committee's site. 
        e.g. "TI0061487/0061504"
1) Go to http://www.house.gov/commerce/TobaccoDocs/documents.html. 2)
Scroll down and click on "Tobacco Institute" under the heading "39,000
Documents Released April 22, 1998" 3) In the fields provided, type
"0061487" and "0061504." 4) Click "Search."
        Tobacco Resolution Site: All documents referenced with pm, ti, bw,
rjr are located on the Tobacco Resolution web site at
http://www.tobaccoresolution.com. After arriving at the site in your Web
browser click on the "Document Archives" link. In the screen that appears,
click on the appropriate company and follow the prompts to the search
screen. Type the entire Bates number into the search field.  e.g.
"pm2021398527/8528"  1) Search for "2021398527/8528"  Note: When searching
for Tobacco Institute documents (ti) attach the prefix "TIMN" to the
complete Bates number range.
        e.g. "ti0136055/6056"
        1) Search for "TIMN0136055/6056"