U.S. support for tobacco overseas: going out of business?

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November 2, 1999 — The exquisitely appointed anterooms leading to the secretary of state's office are a mix of 18th century antiques, crystal chandeliers, oil paintings of past envoys and carved moldings in the shape of tobacco leaves, blossoms and seed pods. It gives new meaning to the term tobacco lobby.

The ’60s-modern reception area was transformed in the mid-‘80s into seven elegant adjoining rooms, known collectively as the Treaty Room, through “the generous contributions” of Philip Morris U.S.A., R.J. Reynolds Tobacco Company, United States Tobacco Company, Brown & Williamson Tobacco Corporation, Lorillard, Inc., The American Tobacco Company, and Liggett & Myers Tobacco Company.

“Tobacco is intimately and historically associated with American diplomacy,” the tobacco companies said in a 1986 State Department brochure unveiling the Treaty Room suite.

The close working relationship overseas between Washington and Big Tobacco changed early in the Clinton administration, which snuffed out the aggressive promotion of tobacco overseas by the Office of the U.S. Trade Representative and formed an interagency task force, in late 1993, to formulate a coherent tobacco policy.

But six years later — despite some progress on the domestic front — U.S. policy on tobacco overseas is as clouded as ever.

The only laws prohibiting U.S. government assistance to tobacco overseas come in the form of annual amendments to the Agriculture and Commerce-State-Justice appropriations acts — subject to the will of Congress and whoever controls the White House. Even then, the restrictions allow for government assistance to tobacco companies in certain international trade disputes, and no law prohibits the promotion of tobacco as a cash crop in overseas aid programs, which increases the supply of tobacco bought by the major purchasers – most of whom are American.

As a result, in an impoverished country such as Malawi in southern Africa, thousands of smallholder farmers were encouraged to grow tobacco and were even helped with planting and transportation under a U.S. aid program.

The result: the amount of small-farmer tobacco sold at auction was 31 percent higher in 1997 than in 1996. By 1998, the amount of this tobacco sold at auction was 56 percent higher than in 1996. These farmers reaped economic ruin as tobacco prices collapsed and hunger spread in a country where tobacco reigned. By 1998, their tobacco earnings were 56 percent higher than they had been in 1996.

The Agriculture Department has been prohibited since 1993, through appropriations amendments, from promoting the sale or export of tobacco products. Two years ago, as states were negotiating what ultimately became their $246 billion settlement with the tobacco industry, Congress expanded the ban on U.S. government aid to tobacco abroad through an amendment to the 1998 appropriations bill for the Commerce, State, and Justice departments, authored by Rep. Lloyd Doggett (D-Texas).

“It bothers me that we want to stop American kids from smoking, yet we don’t seem to have the same degree of concern about Asian or African kids,” Sen. John McCain (R-Ariz.), a supporter of the measure and now a presidential candidate, said at the time.

Comprehensive tobacco legislation in Congress failed in the summer of 1998, after a successful lobbying campaign in which the industry spent $40 million on issue ads, according to a study by the Annenberg Public Policy Center at the University of Pennsylvania. And a November 1998 tobacco settlement with the states placed no restrictions on tobacco’s overseas operations, where profits are booming even as sales at home decline.

Although the government filed a civil suit against the tobacco industry, saying the companies lied about the dangers of smoking, Attorney General Janet Reno says that pursuing the suit will cost $20 million, which must be appropriated by a Congress subject to Big Tobacco’s moneyed influence. Meanwhile, a proposed tobacco tax that would rise or fall depending on the level of teenage smoking is hung up in budget battles between Congress and the White House.

None of this, however, gets at the issue of marketing tobacco overseas.

The Doggett amendment was originally intended to get the government out of the overseas tobacco business altogether. But the industry – which had contributed more than $30 million to Capitol Hill lawmakers and their national party committees from 1987 to 1996 – succeeded in getting an exception tagged onto the end.

“None of the funds provided by this Act shall be available to promote the sale or export of tobacco or tobacco products, or to seek the reduction or removal by any foreign country of restrictions on the marketing of tobacco or tobacco products, except for restrictions which are not applied equally to all tobacco or tobacco products of the same type,” the Doggett amendment said.

That exception referred to instances where different restrictions on tobacco applied, based on country of origin, and created the opening for U.S. government intervention in cases where countries’ policies were deemed discriminatory.

“Given that tobacco use will be the leading global cause of premature death and preventable illness early in the 21st century, there is a need to distinguish between protectionist policies and legitimate health-based actions, so as not to undermine other countries’ efforts to reduce the consumption of tobacco and tobacco products and improve the health of their citizens,” said subsequent guidelines drawn up by officials from State, Commerce, Agriculture, Health and Human Services, Treasury, and the Office of the U.S. Trade Representative.

The guidelines, dispatched to all diplomatic missions in February 1998 and again in February 1999, encouraged posts to assist and promote tobacco-control efforts in their host countries and repeated the prohibitions on promoting the sale or export of tobacco or tobacco products or seeking changes in national laws regarding tobacco. But — working from the tobacco industry-inserted exception – they also specified that “discriminatory” national laws, ones deemed protectionist, were fair game for attack.

“The U.S. government will continue to seek elimination of discriminatory trade practices and will strive to ensure that U.S. firms are accorded the same treatment in a foreign country as that country’s own firms and firms from other countries,” the guidelines said. “The overall objective of this policy is to ensure equal access to a shrinking global market for tobacco.”

That emphasis on trade over health and the lack of clarity about what constitutes discrimination in a global market that is expanding, not shrinking, are some of the worrying aspects of current U.S. policy for tobacco-control advocates.

“The most important thing about the Doggett amendment is that it tells people in the field that this product is not like other products and this industry is not like other industries and that special rules apply. That message, in and of itself, is very important,” said John Bloom, a Washington, D.C.-based lawyer and tobacco policy consultant to health groups.

“The problem is once discrimination is raised, health issues are off the table,” Bloom said. “Sometimes a policy that appears discriminatory is justified on health grounds.”

The guidelines also permit diplomatic posts to give the same “routine business facilitation services,” such as providing country information, to tobacco companies as they do for other U.S. businesses. When in doubt, diplomats are encouraged to check back with Washington.

But in the two years since the Doggett amendment has been in effect, there have been only four queries, from missions in Pakistan, Romania, Peru, and Taiwan, a State Department official said. There is no monitoring of compliance, and it’s not even clear how widely known is the new policy. (The State Department official said he hoped to incorporate the tobacco guidelines into future training sessions for government workers headed overseas.)

“They have been accustomed to a situation where promoting U.S. tobacco was considered a mission not a liability or restriction, so we’re trying to turn around a big ship,” said Doggett. “I’d be surprised if there weren’t some assistance going on somewhere.”

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