'Exporting Death': Cigarette Firms Attack Asia as Americans Smoke Less

Charles Babington is the Washington correspondent for the News and Observer and the Raleigh (N.C.) Times

A remarkable thing is happening in the U.S. cigarette industry: As America continues its 25-year decline in per capita smoking, total cigarette sales are booming.

The reason is that Asia suddenly, albeit reluctantly, dropped trade barriers to U.S. cigarettes. Pushed by Sen. Jesse Helms (R-N.C.), the Reagan and Bush administrations threatened costly sanctions against Asian countries that wouldn't allow the importation of billions of Merits and Marlboros.

U.S. cigarette exports rocketed to $2.6 billion last year, more than double the total three years ago. Sales have grown by more than 2,400% in Taiwan and South Korea since 1985. Japan, where nearly two-thirds of the men smoke, has replaced Belgium as the No. 1 importer.

An increasingly vocal group of public officials calls this a deal with the devil, contending that thousands of Asians will die from lung cancer and other smoking-related diseases after smoking the same products that the U.S. government has labeled hazardous. Some critics predict the aggressive U.S. export policy will one day reap worldwide resentment.

"I don't think that we as citizens can continue to tolerate exporting disease, disability and death," said outgoing Surgeon General C. Everett Koop.

This summer the U.S. effort to open Thailand's $744 million-a-year cigarette market reaches the touchiest issue of all: TV advertising. Like the United States, Thailand bans broadcast ads for cigarettes. But the U.S. trade representative recently launched an investigation of Thai import policies, spurred by a petition from major cigarette exporters that said, "In order to compete effectively in Thailand, the U.S. cigarette manufacturers need to advertise and promote their products."

Spokesmen for Philip Morris and R.J. Reynolds say Thailand banned TV ads only recently, figuring that its government-controlled cigarette monopoly could fend off U.S. imports by keeping their commercials off the air.

Yet the possibility of the U.S. government pressing for cigarette ads on foreign television infuriates Congress' anti-smoking forces.

"It is hypocritical of the United States to consider a television advertising ban abroad an unfair trade practice, but to consider a ban on television advertising at home a national health priority," said a letter to U.S. Trade Representative Carla A. Hills signed by 17 House members, including Californians Pete Stark (D-Oakland), Barbara Boxer (D-Greenbrae), Mel Levine (D-Santa Monica) and Norman D. Shumway (R-Stockton).

The group's leader, Massachusetts Democrat Chester G. Atkins, said recently: "Thanks in large part to actions by the U.S. government, a pandemic of lung cancer in Asia is not just likely, it is inevitable."

Government and tobacco leaders dismiss those arguments as naive, saying the critics are being unfair. They contend they merely want U.S. cigarettes to be treated the same as Asian-made cigarettes in the lucrative Far East market.

"Whether American cigarettes are purchased abroad is, and should be, up to the consumer," said Donald S. Harris, a spokesman for Philip Morris International. "The role of the United States trade representative is to ensure that our products get fair treatment."

Clayton K. Yeutter, the U.S. trade representative who led the fight during the Reagan years, is President Bush's secretary of agriculture. "If countries want to put in place regulations that in some way affect consumption of tobacco products, it's their sovereign right to do so," Yeutter said. "But they cannot be discriminatory about it."

The big U.S. assault on the Asian cigarette market began in July, 1986, when Helms, representing the nation's No. 1 tobacco-producing state, wrote a tough-worded letter to Japanese Prime Minister Yasuhiro Nakasone. Helms then was chairman of the Senate Agriculture Committee and was the second-ranking Republican on the Foreign Relations Committee. Those two positions, plus long-standing ties to Reagan, gave him a clout the Japanese could not ignore.

Japan is a big cigarette producer and consumer, its monopolistic tobacco industry controlled by government. In 1986, high Japanese tariffs and other trade restrictions resulted in less than a 4% market share for U.S. cigarettes, even though their quality is highly regarded.

Helms' letter was a thinly veiled threat that fellow senators were losing patience. He warned the prime minister that "very damaging decisions" regarding U.S.-Japanese relations might result. "May I suggest a goal of 20%" of the Japanese cigarette market for American producers within 18 months, he wrote.

Nakasone didn't move quickly enough; two months later, Helms and 12 other senators from tobacco-growing states wrote to President Reagan, advocating retaliation. Reagan told Yeutter's office to begin sanctions that would include bans on various Japanese exports. Japan quickly lowered the cigarette barriers.

One year later, then-Ambassador to Japan Mike Mansfield wasn't exaggerating when he wrote to Helms that the results "were spectacular."

By 1988, American cigarettes were grossing $606 million in Japan, more than six times the amount for 1985. The cigarette industry was ecstatic. It knew whom to thank.

"You have indeed accomplished a once-in-a-lifetime success for the U.S. tobacco business," Ernest Pepples, senior vice president of Brown & Williamson Tobacco Corp., wrote to Helms in October, 1987. "You got us in Japan."

Then Helms turned to South Korea, using the same tactics: letters followed by the initiation of trade sanctions. The Koreans gave in. Imports of U.S. cigarettes increased ninefold last year and South Korea agreed to allow aggressive print advertising--much of it aimed at women and young adults, an audience virtually ignored by the national cigarette monopoly.

The same scenario played in Taiwan, with widespread advertisements lacking the health warning notices required in U.S. publications.

Atkins, furious, said the message is that "Asian lungs are more expendable than American lungs." Cigarette makers, meanwhile, aren't ignoring Asia's biggest market, China, where 90% of adult males smoke and 1.4 trillion cigarettes are consumed yearly.

The international arm of R.J. Reynolds has opened a cigarette plant in Xiamen as a joint venture with a Chinese firm. The plant soon will produce 2.5 billion cigarettes a year, including Camels, Winstons and two Chinese brands, said Brenda H. Follmer, a spokeswoman for R.J. Reynolds Tobacco International Inc.

If current smoking trends continue in China, British health authority Richard Peto has said, 50 million of the half-billion Chinese now under age 20 eventually will die of smoking-related diseases.

Follmer, the Reynolds spokeswoman, said press reports overlook Asia's high smoking rate, which existed long before significant U.S. exports were allowed and was often encouraged by government-controlled monopolies: "The media never seem to want to follow through on the fact that these people have been manufacturing and smoking cigarettes for a long, long time," she said. "And if we stopped producing or exporting a single cigarette to those markets, they're going to keep on smoking, and we're not going to have any bearing on that."

Rep. Atkins disagreed: "We used to be the No. 1 exporter of good health; now we're the No. 1 exporter of death."

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