[Intl-tobacco] WHO: Trade liberalisation, without safeguards increased tobacco usage: WHO

[robert weissman]

(see below. The full WHO report is available at:
http://www.who.int/tobacco/research/economics/publications/mdg_book/en/index.html


Trade liberalisation, without safeguards increased tobacco usage: WHO
Lanka Business Online
Other Side
5 September 2005

The World Health Organization (WHO) says trade liberalisation, without
safeguards
has, increased tobacco usage in developing countries.

"Trade liberalisation policies have made developing countries more
vulnerable to
trade in harmful substances such as tobacco, and have significantly
increased the
spread of the tobacco epidemic into developing countries, especially the
poorest
nations," says the WHO Millennium Development Goals and Tobacco Control
report.
Trade liberalisation under the World Trade Organisation increased
opportunities for
developing countries to increase trade earnings. But trade
liberalisation also
reduces prices of tobacco products because of increased competition.

Things get worse when trade liberalisation agreements are used to force
developing
countries to open up to the inflow of foreign-made cigarettes. For
example in the
late 1980s and early 1990s, the US put trade pressures on Japan, the
Republic of
Korea, China (Province of Taiwan) and Thailand, forcing them to lift
restrictions
on the importation of American cigarettes.

Opening up tobacco markets increased the share of American cigarettes in
these
countries and also increased the average per capita tobacco consumption
by nearly
10 percent, points out the WHO report. In the Republic of Korea, within
two years
of opening its market, young male smoking rates increased from 18
percent to 30
percent and young female smoking rates went from 2 percent to 9 percent.
WHO notes
that tobacco companies are using global trade liberalisation policies to
expand
market share in developing countries.

"Policy-makers should expect, based on precedent, that trans-national
tobacco
companies will act aggressively to increase their hold in developing
countries,
including those that are currently very poor," says the WHO report. "In
fact,
developing countries represent key new markets for tobacco companies,"
it says.

Meanwhile, because of price reduction of tobacco products, tobacco usage
patterns
have also changed. Now, smoking is more common among the poor, than
among the more
educated rich. Although global per capita consumption of cigarettes is
now more or
less constant, consumption actually decreased in richer countries and
increased in
poorer countries.

"Smoking was once predominant in the developed world, but this is
changing rapidly.
Now, 50 percent of males in developing countries smoke, compared with
only 35
percent of males in developed countries," says the WHO report.
"Comparable figures
for females are 9 percent and 22 percent, respectively, although in
addition, many
women in South Asia chew tobacco."

Three-quarters of all tobacco users are now in developing countries, and
they
consume nearly 60 percent of the 5700 billion cigarettes worldwide
smoked each
year," says the report.

Accordingly, the cost of healthcare for tobacco related illnesses
coupled with
productivity losses and other associated costs, can counter gains from
increased
trade liberalisation. For instance in China, in 1989, the cost of lost
productivity
from nearly 900,000 premature tobacco-related deaths was around US$ 2.42
billion,
with medical costs estimated at US$ 836 million.

Together these costs were greater than revenues to the Chinese
government from
tobacco taxes, and accounted for 1.5 percent of GDP. In India, in 2000,
the Indian
Council of Medical Research estimated the costs of three major
tobacco-related
diseases (cancer, heart disease and chronic obstructive lung disease) at 270
billion rupees (US$ 5.8 billion).

This is a lot higher than the direct contribution of the tobacco
industry to Indian
government revenue of 70 billion rupees (about US$1.5 billion). WHO
notes that many
developing countries, even those that produce tobacco, have a negative trade
balance in relation to tobacco.

They lose more hard currency importing cigarettes than they gain by
exporting
tobacco and tobacco products.
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