[Intl-tobacco] WSJ: Opposition to US action on Korea

[Robert Weissman]

U.S. Effort to Stall Tax on Tobacco Draws Ire of Cigarette Opponents - Wall
Street Journal

Wednesday, June 27, 2001
Politics & Policy

By HELENE COOPER and GORDON FAIRCLOUGH
Staff Reporters of THE WALL STREET JOURNAL

WASHINGTON -- Just as the Bush administration is mending fences with
global AIDS protesters, it is coming under fire from an arguably more
powerful activist group: the antitobacco lobby.

Cigarette opponents have complained President Bush is getting too friendly
with the U.S. tobacco industry. Now they are riled about a recent U.S.
effort to slow down South Korea from imposing new trade requirements on
foreign tobacco companies, and say they may focus their ire on President
Bush's plans to expand his trade agenda in Congress.

"A lot of us are now focusing on the connection between tobacco and trade,
and how global trade rules could undermine" antismoking campaigns, says
Robert Weisman, co-director for Essential Action, an activist group that
targets smoking. "We want [U.S. Trade Rep. Robert Zoellick] to know that
if he's going to get involved in this, he's going to set fire to a
constituency that has stayed out of trade fights in the past."

Two weeks ago, U.S. trade officials pressured South Korea not to proceed
with plans to put an immediate 40% tax on foreign cigarettes, the
Washington Post reported in Tuesday's editions. The South Korean
government had approached the trade representative's office about its
plans, as required by international trade rules, and when U.S. officials
complained, South Korea amended its plans, moving to phase in the tariff
over four years instead of one.

Administration officials say their action to protest the South Korean
tobacco tax was a fair trade issue and nothing more. Seoul was seeking to
unfairly protect its domestic cigarette industry, they say.

"For us it was a clear case of fairness and discrimination with no basis
in health and safety issues," said Rich Mills, a spokesman for the U.S.
trade office. Added Ari Fleischer, White House spokesman: "It was a
straight trade issue."

Tobacco companies echo that response.

"Our hope is that the Bush administration will fully implement U.S. laws"
on discriminatory trade practices abroad, said Peggy Roberts, a
spokesperson with Philip Morris Cos. She said that past administrations
also have objected to excise taxes on cigarettes in other countries.

But for Mr. Bush, the issue has now attracted the attention of antismoking
activists, who say they may lobby lawmakers to oppose White House plans to
expand the global trade agenda.

Mr. Bush wants Congress to grant him "fast track" authority to negotiate
trade deals abroad that Congress can approve or reject but not amend. The
activists say they will press Congress to reject fast track if the White
House doesn't ease up on its support of the U.S. tobacco industry.

Under the Bush administration, things have eased up a little for cigarette
companies, compared with the Clinton administration, which generally
treated cigarette makers more harshly. The biggest signal came earlier
this month when the Justice Department offered to start settlement talks
in its multibillion-dollar suit against the tobacco industry, giving the
impression it had a weak case. The suit, which accuses tobacco companies
of a 50-year conspiracy to mislead the public about the health risks of
smoking, was filed in 1999 under the Clinton administration, and as a
candidate Mr. Bush expressed doubts about it.

Tobacco companies have said they are willing to meet with Justice
Department officials, but contend that the suit is without merit and there
is no need to settle.

In last year's elections, cigarette makers gave about $8 million in
campaign contributions and about 80% of that went to Republicans.

Earlier this week, Bush officials earned praise from AIDS activists when
they abandoned a World Trade Organization complaint against a Brazilian
patent law that Brazil said was aimed at helping get AIDS medicine to poor
people.

Write to Helene Cooper at helene.cooper@wsj.com and Gordon Fairclough at
gordon.fairclough@wsj.com