[Intl-tobacco] TFK Disappointed by Tobacco Provisions in China Trade Bill (fwd)

[Robert Weissman]

28 April 2000

Contact: Judith P. Wilkenfeld
=09    Director, Campaign for Tobacco Free Kid's WHO/Framework Convention
Initiative

CAMPAIGN DISAPPOINTED BY TOBACCO PROVISIONS IN CHINA TRADE BILL

The Campaign for Tobacco Free Kids today released the following statement:

The Campaign for Tobacco Free Kids is deeply disappointed that the
Administration has negotiated with China for a significant reduction in
its tariffs on tobacco and tobacco products, as disclosed in the recently
declassified text of the agreement now before Congress. Smoking in China
is already predicted to claim the lives of more than 150 million current
smokers and more than 50 million of the children alive in China today.
While it was not the intention of the Administration to effect smoking
rates in China, we believe that the proposed tariff reductions could have
that result. If this were to occur by =93only=94 one or two percent, millio=
ns
of additional deaths will result.

Should this agreement be approved, we will call on the Administration and
Congress to waive enforcement of the tobacco-related provisions in the
bill unless the Department of Health and Human Services can demonstrate
that they promote public health. If the trade pact is ultimately rejected
by Congress, we will urge the Administration to abstain from seeking
increased market access for tobacco products in future negotiations.

China: Why Trade Policy Affects Public Health

Econometric research in other markets forced open by U.S. trade pressure
(Thailand, Japan, South Korea and Taiwan) found that the average increase
in per capita cigarette consumption attributable to U.S. tobacco trade
actions was 10 percent. Providing open access to China=92s vast existing an=
d
potential tobacco market will create a huge economic incentive for
domestic and foreign companies to compete aggressively for =93new smokers=
=94,
which in China means targeting traditionally nonsmoking women and
children. Increased competition will also make highly sophisticated
Western cigarettes much more available.  Cigarettes such as Marlboro are
carefully engineered to create and sustain addiction, and include
flavorings and other additives that make them more appealing than Chinese
cigarettes to traditionally nonsmoking women and children.

Lower tariffs and increased competition will also create more intense
price competition and thus lower cigarette prices. Price is known to be an
enormous factor in smoking prevalence and cigarette consumption,
especially in developing nations and among children.  Finally, trade
pressure on China=92 s domestic tobacco monopoly will inevitably lead it to
compete aggressively in the cigarette export market to make up for lost
market share. Logical targets for China=92s cigarette exports are other
developing nations in Asia and beyond. This likely transformation of
China=92s enormous monopoly into a global competitor means that forcing
increased access for Western cigarettes in China is likely to be a public
health catastrophe both for China and the world.

When U.S. Trade Policy Conflicts with Public Health

The Campaign believes that when U.S. trade policy conflicts with public
health interests, concern for human life and public health should take
precedence over other goals such as increased market access for the U.S.
tobacco industry. In no case should the United States take any action that
has the effect of increasing tobacco consumption overseas.

The entry of multinational tobacco companies in previously closed markets
has been shown to increase tobacco use within those markets.  Therefore,
the United States should not seek to lower foreign tariffs or other trade
barriers on tobacco products - even if those policies were developed for
protectionist purposes - if those barriers are applied equally to all
foreign countries.  In all other cases, the United States should not seek
to break down tobacco-related trade barriers unless the Secretary of
Health and Human Services determines that the trade action does not pose a
threat to public health by stimulating higher rates of tobacco use.
Tobacco trade policy decisions should be dealt with openly with ample
opportunity for public input, and the reasoning behind any decision should
be made public before any action is taken.