New Trade Issue Smoldering : U.S. Tobacco Firms’ Push to Sell Cigarettes in Thailand Seen as Attempt to Export Health Risk to Asia, Third World
A bright-red billboard spanning the entrance to Patpong Road, the center of Bangkok’s tawdry bar and nightclub district, reads somewhat incongruously: “Winston. Style of the USA.”
The advertising seems more than a little out of place. Winston and other foreign brands of cigarettes have long been banned in Thailand, where tobacco sales are in the hands of a government monopoly.
But that may soon change if the American tobacco industry prevails in a battle to force open the Thai market to foreign cigarettes, using U.S. trade legislation designed to end unfair trade practices as the lever.
In recent years, American cigarettes have become the latest battlefield in the ongoing dispute between the United States and Asia’s economic powerhouses over allegations that American products are unfairly excluded from the Asian marketplace, contributing to the huge U.S. trade deficit with countries of the region.
Petition Considered
But the issue has gone far beyond trade relations, sparking allegations--which are denied by the American companies--that the United States is exporting its leading health risk to Asia and other Third World countries at a time its domestic market is declining because of the dangers of smoking.
So far, Japan, Taiwan and South Korea have bowed to U.S. demands and ended their exclusion of American brands. U.S. cigarettes have rapidly claimed 12% of the Japanese market and 16% of Taiwan’s market, according to industry figures.
The South Korean government opened its market to American cigarettes last July after the American tobacco industry filed an “unfair trade practices” complaint with the U.S. trade representative. If a complaint is accepted, the trade representative is empowered to investigate and assess monetary damages for lost trade.
After the victory in South Korea, where American brands have claimed 4% of the market in just six months, the American tobacco industry has turned its sights on Thailand, whose tobacco industry sold 33 billion cigarettes last year, for a total of $680 million.
An industry group known as the U.S. Cigarette Exports Assn. has “under active consideration” a petition against Thailand for unfair trade practices, according to a spokesman at the Winston-Salem, N.C., headquarters of cigarette giant R. J. Reynolds, one of the three companies in the association.
Disclosure of the pressure being applied to the Thai government to end the restrictions on foreign cigarettes provoked an outraged response in Thailand and has divided the government between the finance officials, who see cigarette imports as “inevitable” and therefore useful to ease other trade strains, and the Public Health Ministry, which sees imports as contradicting the government’s efforts to curb smoking.
“While America sees a dramatic decrease in the smoking habit, Asians aren’t American. Therefore, the (Bush) Administration has sought to pressure cigarette exports to Asian countries,” an editorial in the newspaper Thai Rath said. Several papers gave front-page coverage to a remark by California Rep. Mel Levine (D-Los Angeles) that the U.S. government apparently considered “Asian lungs more expendable than American lungs.”
Prakit Vathesathesatogkit, a doctor of internal medicine who leads Thailand’s anti-smoking campaign, said he feared that imports of American cigarettes would reverse a trend that showed a slight drop in smoking in Thailand, where 49% of males over 10 years of age are smokers.
“We’re concerned people will find imported brands, especially American cigarettes, more fashionable,” he said.
Even Punya Khwanyu, managing director of Thailand’s Tobacco Monopoly, said he opposed the imports on health grounds. The government, he said, has banned advertising of local brands and mandates a health warning on every locally produced pack of cigarettes, while foreign tobacco is widely advertised and carries no health warnings.
“Quite contrary to what our antagonists may state, this is a trade issue and not a health issue,” said Ray Donner of R. J. Reynolds’ regional office in Hong Kong. “The issue is whether the American companies are going to be allowed to compete. We’re looking for a level playing field.”
Trademark Disputes
An anomaly of the trade dispute is that huge numbers of American cigarettes already reach the market through smuggling. The tobacco companies argue that the smuggling would stop if the market were legalized.
The cigarette dispute comes at an awkward time for Thailand, which lost $165 million in U.S. trade benefits in January because of disputes over the issue of “intellectual property,” which generally includes patents, trademarks and copyrights.
Thailand has become renowned as a center of counterfeit goods, with everything from pirated music tapes to imitation Ralph Lauren shirts for sale in Bangkok’s voluminous street markets.
The issue of copyright violations, such as videotapes and music, moved a step closer to resolution March 1, when protection was extended to U.S. goods. Legal sources in Bangkok said they expected major American entertainment firms to file suit shortly seeking to test the new protection.
The main outstanding disputes now center on protection for computer software and medicines covered by U.S. patent. A judicial body has ruled that software is protected by copyright, but the issue has not been tested in court.
