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Asians kick Big Tobacco in the
butt
By Alan Boyd
SYDNEY - It won't show up in health
statistics for another generation, but the
developing countries of Asia are gaining the upper
hand after two decades of arm-wrestling with the
multinational tobacco giants.
Employing a
low-tar blend of tax measures, litigation and
Third World bluster, some of the world's biggest
cigarette markets have been able to stem the
inflow of foreign cigarettes without the
confrontational strains that have poisoned past
trade ties. Their proudest achievement was
unveiled on Sunday, when the Framework Convention
on Tobacco Control (FCTC), the first international
health convention, came into force with the
backing of 170 countries.
Among other
things, the FCTC bans advertising, promotion and
sponsorship involving tobacco products, requires
tougher health warnings on cigarette packs,
tightens laws on second-hand smoke, cracks down on
cigarette smuggling and seeks to increase
tobacco-manufacturer liability.
Almost
quashed by tobacco companies and their political
lobbyists in three bruising years of negotiation,
the treaty was rescued by an extraordinary
alliance of developing nations that declared they
were tired of being pushed around by big business.
"Once again, the countries of Africa,
Southeast Asia and the Middle East are playing a
lead role in protecting people from the deadly
tobacco epidemic," said Kathryn Mulvey, executive
director of Corporate Accountability
International, which was formerly known as Infact.
"Attempts by Philip Morris/Altria, British
American Tobacco [BAT] and Japan Tobacco
International [JTI] to prevent an effective treaty
from entering into force have proved futile," she
added.
The treaty has limitations,
including a let-out clause for nations that have
constitutional barriers to the banning of tobacco
advertising. It does not even have comprehensive
backing: although scores signed up, only 57
countries have completed the ratification process.
Yet the signatories have adopted a
consensus position, almost unprecedented in global
diplomacy, on the need to make a clear distinction
between health and trade interests.
Multinationals have benefited since the
mid-1980s from a US and European strategy of
securing export access in the developing world
through the simple expedient of withdrawing
preferential tariffs for goods entering their own
markets. Japan, South Korea, Taiwan and Thailand
were forced to open their retail sales to US
cigarettes under the threat of sanctions.
According to World Health Organization (WHO) data,
South Korea's cigarette consumption rose from
68,000 tonnes in 1980-82 to 101,000 tonnes in 1999
after the market opening, and consumption in
Thailand over the same period grew from 31,000
tonnes to 40,000 tonnes.
China slashed
tariffs on imported leaf tobacco and cigarettes in
2000 in return for a trade-liberalization
agreement with Washington. It is now considering
licensing a foreign cigarette production plant.
While Thailand became one of the leading
Asian advocates of the FCTC, along with India,
Singapore, Pakistan, Vietnam, Bangladesh, Sri
Lanka, Bhutan, Myanmar, Brunei and East Timor, the
Chinese and South Koreans have not ratified the
treaty. Japan has, but with marked reluctance. A
significant manufacturer through its a state
tobacco monopoly, Tokyo sought to weaken the
convention but ultimately deferred to regional
opinion.
The United States is also
outside, after a concerted campaign by the
administration of President George W Bush to
distance itself from the more proactive stance
taken by former president Bill Clinton, whose team
bartered the original framework.
Washington's involvement has been emotive,
with its former top negotiator, Thomas E Novotny,
abruptly quitting in 2001 out of frustration over
the softening of the US position on such key
issues as restrictions on second-hand smoke and
the advertising and marketing of cigarettes.
Of the five biggest cigarette exporters,
only India has fully endorsed the treaty. Its
innovative approach to consumption curbs, while
carefully circumventing trade sensitivities, has
been cited by anti-tobacco groups as a model for
keeping marketeers at bay. A recent WHO report
urges the Third World to embrace Delhi's strategy
of using litigation, public inquiries and
scientific breakthroughs, as well as a judicious
mix of tax disincentives, to prevent commercial
pressures intruding on national health.
India was forced to enact tighter smoking
regulations after a landmark public-interest writ
petition was issued in the Delhi High Court in
2000 charging the government with failing to
implement the Smoking and Non-Smoker Health
Protection Act, passed in 1997. Bowing to the
petition, health authorities agreed to ban
cigarettes for anyone under the age of 18, to
comply with sections of the act intended to keep
tobacco products away from children and
adolescents.
Singapore and Thailand are the
only other Asian countries with comprehensive
tobacco-control laws, including bans on tobacco
advertising and sponsorship, smoke-free public
places, large, clear health warnings, and
health-education campaigns (see Thailand
lights up anti-smoking drive).
The
FCTC, in endorsing the need for a buffer between
the two contradictory aims - slowing the inflow of
foreign cigarettes without unduly risking trade
ties - offers another option that intriguingly
adopts the US tactics of the 1980s, but in
reverse.
Asian negotiators seized upon a
1989 ruling by the General Agreement on Tariffs
and Trade (GATT), predecessor to the World Trade
Organization (WTO), that granted Thailand the
right to ban tobacco advertising on the basis that
countries could give "priority to human health
over trade liberalization".
Adopting the
same principle, the FCTC seeks to neutralize
potential conflicts of interest at WHO on tobacco
control and nutrition policy by giving governments
a clear mandate to protect the well-being of their
populations without risk of trade retaliation.
Under the terms of the treaty, fellow
signatories are duty-bound to enforce its
provisions and oppose any breaches.
Governments will have to pursue their
grievances through the WTO's disputes forum, which
is dominated by some of the non-signatory
countries that ship cigarettes around the world -
including the US, China, Brazil and Turkey.
But the Third World has already
demonstrated through its leverage in the United
Nations General Assembly and other global arenas
that it has the clout to challenge the commercial
giants, provided enough nations are convinced
there is a net gain for their own economies. After
all, the FCTC draft was hammered out under
considerable duress: the committee chairman and
architect of the original treaty framework was
Brazilian Ambassador Celso Amorim, whose country
is the biggest exporter of tobacco leaf.
One dividend from tough anti-smoking
policies that has become apparent is the flow-on
benefit for drug companies, as therapies and
addiction treatments increasingly generate big
profits of their own. In India, manufacturers
Pfizer and Elder Pharma have unveiled plans to
launch treatments aimed squarely at smokers who
want to quit, creating a de facto alliance of
opportunity with health authorities. Elder Pharma
has agreed to market Ceejay Healthcare's
nicotine-replacement therapy product Nu Life by
mid-March, and Pfizer said it would import similar
products from its global network within two years.
Early indications have not been positive,
with Sun Pharma struggling to sell Smoquit as a
prescription product, while GlaxoSmithKline was
forced to withdraw Zyban following overseas
reports of side-effects. But the market is
expected to expand rapidly as other jurisdictions
move toward high-tax regimes for tobacco:
Thailand, Pakistan, Malaysia, Hong Kong and
possibly Taiwan and South Korea are viewed as
potential markets for anti-smoking therapies.
Undoubtedly the taxes are hurting. Early
last month Malaysia's biggest tobacco company
forecast a substantial decline in consumption
because of a Tak Nak! (Say No!) campaign
launched a year ago that has brought sharply
higher excise duties.
The tobacco industry
isn't taking the multi-pronged attacks on its
profitability lightly, keeping regulators at arm's
length by resurrecting the time-honored argument
of protecting freedom of choice. It appears to
have found a staunch ally in President
Bush.
On Thursday, as the anti-smoking
movement was preparing to celebrate the start of
the FCTC, the US Senate approved a measure
sponsored by the White House that will help shield
businesses from large class-action lawsuits like
the ones that have been brought against tobacco
companies in recent years.
Lawsuits will
no longer be able to be heard in small state
courts and must be taken to the more conservative
federal judges, who generally have been opposed to
class actions as a matter of principle.
"Our country depends on a fair legal
system that protects people who have been harmed
without encouraging junk lawsuits that undermine
confidence in our courts while hurting our
economy," Bush said in a statement.
Alan Boyd, now based in Sydney,
has reported on Asia for more than two decades.
(Copyright 2005 Asia Times Online Ltd.
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