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I have previously written about the absurdity of treating tobacco like any other good in the market, specifically the inconsistencies between antitrust law and public health regulation. It’s concerning – and frightening – when economists and free trade advocates forget that, unlike any other commercial good, tobacco products harm and frequently kill those that use them exactly as directed or intended. The global death toll from tobacco is currently 6 million people every year, making tobacco products and tobacco use something we should be seeking to eradicate, not to promote or protect through trade policies or agreements.
This time, the issue concerns a US imports program, the Generalized System of Preferences (GSP). The purpose of the program is to help “the world’s poorest countries to use trade to grow their economies and climb out of poverty” by eliminating tariffs or duties on specific products imported from these countries. You’ve guessed it – cigarettes and other tobacco products are on the GSP duty-free list.
Luckily, the GSP list of products undergoes periodic review, and the Office of the U.S. Trade Representative is currently reviewing the submitted comments and petitions. Surprisingly, over at least the past several years no one has submitted a petition to USTR to remove any tobacco products from the duty-free list. But the O’Neill Institute has just submitted a petition seeking the withdrawal of all tobacco products from the GSP list and encouraging USTR to consult with tobacco control and public health experts when taking any action relating to tobacco products or tobacco use.
Encouraging growth of the tobacco industry won’t help the development of poorer countries
For a policy that’s supposed to help developing countries grow their economies, it makes no sense to encourage the increased production for export of tobacco or manufactured tobacco products. Any such increased production for export will almost certainly translate into the increased availability of tobacco products at lower prices in the source country as well. And that will lead to increased tobacco use, along with all the related health harms and other costs.
That means less healthy families, reduced worker productivity, increased healthcare demands and costs, and higher government and business expenditures. It also means that scarce economic resources are being diverted away from the production of more constructive goods or from investment in more sustainable industries. We already know that mechanized tobacco production creates fewer jobs than production of other goods and services. Growing tobacco also creates unique environmental harms and takes land and other resources away from the production of food crops, which can reduce the availability of certain food staples and increase overall food prices. Promoting tobacco farming can interfere with a lesser-developed country’s ability to become more agriculturally self-sufficient, which is crucial for economic development. Child labor is also common in many developing tobacco-growing countries.
It also makes no sense to help increase the economic and political power of those countries’ domestic tobacco industries. As I’ve written about before, developing countries are already having a hard enough time fighting the powerful tobacco industry when trying to pass basic public health measures. US imports of tobacco may also be coming from these powerful multinational corporations that certainly don’t need discounts or additional support – especially when their profits may not even stay in that developing country.
This policy again highlights inconsistencies between economic policy and tobacco control laws
Similar to the case of antitrust law, this policy again demonstrates that the US needs to do a better job aligning economic policy with existing public health law. For example, this policy flies in the face of Executive Order 13193, which states that “It shall be the policy of the executive branch to take strong action to address the potential global epidemic of diseases caused by tobacco use . . . In the implementation of international trade policy, executive departments and agencies shall not promote the sale or export of tobacco or tobacco products.” (emphasis added)
Similarly, the so-called Doggett Amendments to Public Law 113–235 (concerning appropriations) state that “None of the funds provided by this Act shall be available to promote the sale or export of tobacco or tobacco products…”
Promoting tobacco imports and sale in the United States also contradicts the goals and purposes of the 2009 Family Smoking and Tobacco Prevention Act which aims to reduce the use tobacco products and the related public health harms.
The goals of trade liberalization cannot apply to tobacco products
Trade liberalization aims to increase consumer access to more goods and services at lower prices. In the case of tobacco products, this translates directly and unavoidably into higher use levels and increased tobacco-caused disease, suffering and death. Unlike any other consumable product, there is no way to use tobacco products safely, much less beneficially. Especially as the public health burden from tobacco use continues to spread to the developing world, it makes no sense to promote its production and use by including it on the list of products eligible for GSP duty-free treatment. Nor does it make sense to provide trade agreement protections to tobacco products, much less to permit tobacco industry use of trade agreements to impede tobacco control actions by national or local governments.
Recent reports suggest that the U.S. is moving in the right direction in the Trans-Pacific Partnership trade agreement, which will reportedly include new language to prevent the tobacco industry from directly using the agreement to attack tobacco control laws and rules. But the TPAA will likely still include other provisions, similar to those in most existing bilateral and multilateral trade agreements, that could be used to interfere with bona fide tobacco control efforts or work to reduce tobacco product prices and increase their availability.
At least the inconsistency between trade liberalization and tobacco control should be easy to correct in the GSP simply by removing tobacco products from the GSP list of duty-free products. In response to the O’Neill Institute petition, we hope the USTR will recognize that inconsistency and not only exercise its authority to remove all tobacco products from the duty-free list but also work closely with public health and tobacco control experts before making any trade-related decisions that relate to tobacco.