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Asians kick big tobacco in the butt
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.
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.
Asia Times Online


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Asians kick big tobacco in the butt
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