Tobacco Documents Online

WA.SIII1 GTO1 UGAL FOUNDATION 1705 N STiFtEET, N. W. WASHIN'GTOM', 0. C. 20036 202'- 8'57-0240 February 17, 198'8 Mir. John Bagrosky Executive Secretary Interagency Committee on Smoking and Health Park Buil''ding, Room 1-10 56010 Fishers Lane Rockville, MD 20857 Re: Tobacco and U.S. Trade Policy Dear Mr. Bag,rosky:. We noted with interest an item that appeared in the Federal Register annoumcing the February 18th meeting of the Interagency Committee on Smoking and Health at which you willl be discussing "the issue of tobacco and United States trade pollicy." 52 Fed. Reg. 48764 (December 24, 19'87). A'lthough this notice did not solicit comments, and we plan on sending a legal representative from the Washington Legal Foundation to attend tomorrow's meeting, we are nonetheless sufficiently concerned about your Committee's proposed activities to wish to express our views formally via thils letter. By way of introduction, the Washington Legal Foundation ("WLF") is a nationall, non-profit public interest law and policy center. WLF is headquarterd in Washington, D.C. and:presenitly has over 200,000 members, supporters, and contribvtors niationwid'e. WLF engages in litigation and in administrative proceedings N C which affect the public and national intere st in a wide variety N, of ways. In the past, WLF has noted and commented upon ill- considered attempts by both governmental and'.private groups to W ban cigarette and tobacco advertising from the airwaves. See, e.g., the two enclosed WLF Legal Backgrounders. 1~1 More specifically, inithis instance the Foundation is ~ concerned that the activities of your Committee -- a Committee W which, so far as we have been able to determine, has noia'uthority or expertise in the complex issue of tobacco and United States trade policy -- may impose a damaging, self-inflicted wound on our nationi's economy. In the Foundation's view, the economic stakes are simply too high to permit U'nited, States trade policy to be ad!versely affected

Mr. John~Bagrosky February 17, 1988 Page twoI by amover-zealou~s domestic anti-smoking agenda:. While such ill-advised regulatory efforts will defi~nitelly harm our national export position,, there iis no evidence that they willi reduce smoking abroad. In this regard we wish to point out that tobacco is one of very few American industries that has the ability to produce a world class export. In! sharp contrast to a persistent national trade deficit that quad'rupled'from $36 biillion in 1980 to a record of $170 billiion in 1986, the tobacco industry has consistently produced an annual trade surplus. These exports, in turn, help to maintain a high standard of living and production, across the nation. Thus, for example, new business generated by increased tobacco exports to Japan and Taiwan is expected to add~nearly $8'00 million to the U.S. trade surplus and has already required stepped~up production in cigarette plants in Virg,inia, Kentucky, Georgia:and North, Carolina. And if, as the Secretary of Commerce has recently reported, it is true that every billion dollars in exports creates 25,000 American jobs, it becomes clear that tobacco exporting has become essential to the economic well-being of coumtliess American families. As WLF views it, a U.S. trade policy designed~to decrease American exports of tobacco makes no economic sense. Rather it would'appear to constitute littlie more than a thinly veiled attempt by anti-smoking zealots to export theilr health views abroad. But the zealots are mist aken even in this regard. Smokers living abroad will not quit smoking if American brands are d'enied entry. They will simply smoke native brands or ?V cigarettes made in Germany, the Netherlands, England or ~ elsewhere. In fact, totali cigarette consumption in countries abroad has no correlation wiith:trend!s in American exports. For W ~ example, in,Jlapan, sale of U1.S. brands is up sharply but overall ~ cigarette consumption has been decliniing for the past five years.,,r,,, Moreover, a U.S. trade policy that actually worked to our ~ economic advantage by abolishing,foreign trade barriers against ~ tobacco exports would not increase smoking in countries overseas. Smoking has always been an extremely popular practice. Nearly five tri~llion cigarettes were produced and'consumed world-wide in 1986. About 593 bil'lion cigarettes, or better thanione in ten, were American made. The U.S. market share could expand considerably, if foreign trade barriers were lifted,. This, in turn, would increase domestic prosperity.

Mr. John Bagrosky February 17, 1988 Page three In conclusion, WLF points out that U.S.., trade policy has been carefully considered by experts in economics, business, trade and international finance and establ'ished by administration and congressional officials. Jurisdiction rests with the White House via the U.S. Special' Trade Representative and with such cabinet departments as State, Commerce, Agriculture, and Treasury.. Several standing committees of Congress also have oversight on trade iissues. The concern of members of the House and Senate is obvious as evidenced by the fact that a:conference committee of 199 conferees and~17 subcommittees is workiing the omnibus trade bill (HR 3'). Neither your Committee nor the Suirgeon General has been given a mandate to export an anti-tobacco/health campaign. Nor do foreign governments need help from your inter-agency commi,ttee iin dletermining, their national smoking policies. The economic stakes are simply too high to permit domestic smoking policy to endanger national trade policy. Given this nation's record trade deficit and'the weak condition of its financial markets folliowing October 14, 1987's plunge, it makes no sense to impose restrictions inspired by a domestic anti-tobacco campaign on a U.S. trade policy and anlindustry that has consistently contributed a favorable trade balance of about $2 billion, annually for the past six years. To adopt an anti-tobacco trade policy would have no impact on world smoking patterns. On the other hand, doling so would definitely impose a d'amaging self-inflicted wound on the national economy. Respectfully submitted, . Daniel J. Po eo General Counsel DJP/cme enc . cc: Honorable Otis R. Bowen Secretary of Health & Human Services N © C. Everett Koop C^7 U.S. Surgeon General t..~ ~ ~ ~ ~