Globalization and Tobacco: Enabling Healthy and Sustainable Trade Governance
Raghavendra Madhu underscores the immediate need for transnational trade regulatory bodies to come forth and frame a protective policy framework on tobacco and allied trade which degenerates the lives of millions, paradoxically barring development in the developing world.
Transnational linkages between trade and health issues are evidently growing. [1] These links are drawing increasing attention from public health researchers, particularity as the recent paradigm of global health governance provides inclusive reasoning from a macro-perspective and puts health on the political agenda. Indeed it is argued that neglecting the spillover of health issues into the economy could have numerous consequences, including hampering trade prospects.
It is often said that the Tobacco industry represents a unique global health challenge through its promotion of a product which kills the consumer when used as directed. Furthermore the industry has an organized lobby that campaigns for its products at all levels. Despite this, the Framework Convention on Tobacco Control (FCTC), which has been ratified by 166 countries, is the first global public health treaty designed to tackle this challenge by the World Health Organization (WHO). Its ratification represents a move towards ‘health over trade’.
The Framework instructs signatory countries to implement the Convention within their domestic systems. This focus arguably arose in response to the dilemma that although tobacco is widely considered dangerous, no routine regulatory approach can make sense of it, particularly from a ‘trade’ perspective. Indeed it is neither a food nor a drug.
However it has been indicated that the FCTC alone has not been able to resolve health-trade issues from a global governance perspective and at best provides a stringent domestic regulatory framework to cope up with tobacco use. [3] There are likely numerous causal factors for the FCTC’s limitations, including evidence of the tobacco industry undermining tobacco control efforts and obfuscating scientific findings through its ability to influence policies. Furthermore it was reported that Germany, the U.S. and Japan, all G8 countries with major tobacco industries, made several attempts to dilute the tobacco control measures within the treaty. [4] Indeed the U.S. is yet to ratify the FCTC, preventing the tobacco control movement from enjoying its backing.
Organizations like World Trade Organization (WTO), the World Bank and the International Monetary Fund have had increasing prominence within the global governance of health. Indeed most decisions on how health-care development needs to be organized have been moderated by these organizations alongside their primordial agenda of economic development through liberalizing markets. However trade agreements in the past have reportedly protected the tobacco industry, even allow it to evade human right principles. [5] For example, the liberalization of trade has resulted in lower pricing strategies and is associated with increased transnational tobacco trade and use, resulting in greater morbidity and mortality. [3]
Despite this history, it remains essential that these organizations use their power to play a role in reducing conflict between global health goals and trade obligations. Moreover it is argued that whistleblowers and advocates for health should participate towards involving organizations such as WTO to develop public health sensitive trade policies.
Ambiguity and conflicts related to the governance of the tobacco trade are inevitable as there is incongruence in policies between global trade and health. Indeed they remain despite the WTO’s attempts at regulation. [6] For example, in 2009 the US FDA banned cigarettes with fruit, confectionery or clove flavors, arguing that they encourage young people to smoke. This resulted in ban of imports of clove flavored kreteks from Indonesia, but domestic menthol cigarettes were left untouched and widely available to the US population. When this ban was eventually challenged, a WTO ruling accepted that both were equally harmful and the ban was withheld. More recently, a notification from the WTO in response to an Australian draft bill for plain packaging by fourteen of its members argued that there was missing evidence that plain packaging helps to reduce tobacco use, especially among young people. The Tobacco Industry supported these members and argued that there is no credible evidence to substantiate what the Australian government’s claims; namely that people make the decision to smoke or continue smoking because of the colour of the packs of the cigarettes they buy. [7] However, despite the political odds and aggressive lobbying by the tobacco industry, the Australian Plain packaging bill passed in November 2011.
The global progress report on implementation of FCTC (2010) reported high compliance rates for measures on protection from exposure to tobacco smoke (Article 8), packaging and labeling (Article 11), sales to and by minors (Article 16), and education, communication, training and public awareness (Article 12). Compliance rates were low in other areas such as regulation of the contents of tobacco products (Article 9), tobacco advertising, promotion and sponsorship (Article 13), provision of support for economically viable alternative activities (Article 17), protection of the environment and the health of persons (Article 18), and the use of litigation as a tool for tobacco control (Article 19). [8] Thus there remains a caveat in the themes related to sustainable and healthy trade. Illicit trade in tobacco products (Article 15) is a significant barrier to sustainable trade. Around 30% of the parties to FCTC are yet to strengthen laws in this regard. The progress of the protection of public health policies with respect to tobacco control from commercial and other vested interests of the tobacco industry (Article 5.3) remains unanswered. It has been suggested that the lack of information on this issue needs to be addressed. The revenue losses are particularly high in sectors such as tobacco and alcohol, where excise taxes are high and the smuggling of counterfeit products to avoid taxes is widespread. This inadequacy of policy reforms to regulate the tobacco trade shall eventually deteriorate the plexus of transnational trade relations.
Participation from major regulatory bodies is needed to spotlight governance issues linked to healthier trade and drive the conception of an effective tobacco control plan. However it arguably cannot be encouraged in the case of tobacco due to the competing interests of industry. For instance, the G-20 which consists of 19 country members and the European Union, representing 90% of global GDP and 80 % of global trade, is an important arena within which tobacco policy reforms must be advocated. The WHO, based on its Technical Manual on Tobacco Tax Administration, has advocated for an EU wide increase in tobacco taxes, highlighting its own benchmarks for tobacco excise taxes i.e. at least 70 per cent of the pack price. Yet member countries are still to adopt the suggestion, arguing that a one tax-policy does not suit all and that research suggests a considerable increase in price of cigarettes would cause a rise in their illicit trade, damaging their long-term tax bases and undermining public health efforts. [9] This is a looming concern and the lack of a comprehensive plan to regulate global tobacco trade, including the issue of illicit trade, is favoring the tobacco industry’s arguments against tax increases and regulation.
Tobacco control efforts have always been considered incompatible with the industry’s standard practices. Yet recent research makes it clear that at the international level, coherence in health and trade policies needs to be prioritized. As tobacco governance continues to evolve and become increasingly complex, the formation of a health sensitive trade think-tank could provide a significant resource for those working in this area. Indeed it has been emphasized by the WHO that there needs to be more opportunities for ‘health’ to contribute to WTO’s negotiation mechanisms. There are several debatable propositions, the most prominent being over whether tobacco as a part of international trade agreements jeopardizes better trade policies. However public health experts have largely stayed with ‘tobacco exceptionalism’. For many, this approach limits the scope for policy innovation and potential synergies for a global pact on integrated trade policies. [10-12] Keeping the current situation in view, it is essential that the rationales underpinning the global tobacco trade be examined and the foundations for an explicit healthy trade policies be laid.
Raghavendra Madhu is a senior consultant to Government of India and practices development policy and social governance research. This perspective was written solely by the author during his work at the Public Health Foundation of India.
References
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