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The Tobacco Problem in U.S. Trade

Should tobacco be like any other product in U.S. trade? The question bedeviled U.S. policymakers for decades, but it has now arisen again, with much controversy, in the context of the Trans-Pacific Partnership (TPP), the pending trade deal between the United States and eleven other countries.

The White House has tried to finesse the issue, recently proposing that the TPP agreement acknowledge tobacco as a health concern but otherwise treat it no differently from other products. That compromise has satisfied no one. Health advocates are furious that the White House dropped its previous proposal for a stronger tobacco control exception in the TPP agreement. The business community opposes any special treatment for tobacco. With that controversy spilling into the press and threatening the conclusion of the TPP talks—the Obama administration’s signature international economic initiative—the White House should now formally resolve the question of the role of tobacco in U.S. trade policy. That answer is expected to come next week, when the final formal round of TPP negotiations commences in Washington, D.C.

For many years, there was no doubt that tobacco was a product like any other in U.S. trade policy. Throughout the 1980s and 1990s, the United States used trade measures to pry open emerging Asian economies to imported cigarettes. Those countries were unprepared for intensive marketing by the tobacco industry, particularly to women and youth. According to a U.S. Government Accountability Office report, after multinational tobacco companies entered South Korea in 1989, smoking among teens rose 11 percent and quintupled among girls in the first year. A public outcry ensued. In 1997, Congress conditioned the appropriations of several U.S. government agencies on those funds not being used to promote tobacco internationally.

An uneasy compromise over tobacco and trade emerged. U.S. trade officials refrained from tobacco-specific initiatives and, despite occasional, significant congressional pressure, declined to bring trade cases against other countries’ tobacco control measures. Meanwhile, nearly every U.S. trade and investment agreement negotiated over the past decade has reduced tobacco tariffs and continued to protect tobacco investments like those of any other U.S. industry.

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