Tobacco Documents Online

W,ks~HrNGTON . Li:G.U. FO~~U~NWiTIUN ~ 1705 N STREET, N W: WASHINGTON, D.C 20036 202-857-0240 February 17, 1988 Mr. John Bagrosky Executive Secretary Interagency Committee on Smoking and Healith, Park Building, Room 1-10. 5600 Fishers Lane Rockville, MD 20857 Re: Tobacco and U.S. Trade_Policy Dear Mr. Bagrosky: We noted with interest an item that appeared iin the Federal Register announcing the February li8th meeting! of the Interagency Committee on Smoking and Health at whilch you will be discussing "the issue of tobacco and Uniited States trade policy." 52 Fed. Reg. 48764 (December 24, 1987). Although this notice didinot solicit comments, and we plan on sending a legal representative fromi the Washington LegaT 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 thi~s letter. By way of introduction, the Washington Legal Foundation ("WLF") is a national, non-profit public interest 1aw, and poli~cy center. WL,F is headquarterdl in, Washington, D.C. and presently has over 200,000, members, supporters, and contributors nationwide. WLF engages in litigation and in, administrative proceedings whichl affect the public and national interest in a wide variety of ways. In the past, WLF has noted and commented'upon ill- conisidered attempts by both governmental and private g,roups to ban cigarette and tobacco advertising from the airwaves. See, e.g., the two enclosedlWLF Legal Backgiround'ers. More specifi~cally, in this instance the Foundation is concerned that the activities of your Committee -- a Comm,ittee whilch, so far as we have been able to determine, has nio authority or expertise in the complex issue of tobacco and United States trade policy -- may impose a damaging, self-inflicted wound!onn our nation's economy. In the Foundation's view, the economic stakes are simply too high to permit United States trade policy to be adversely affected

Mr. John IIagrosky February 17, 1'988 Page two by an over-zealous domesttc anti-smoking agenda. Whiile such ill-adlvi~sed regulatory efforts will d'efiniltely harm, our national export positilon, there is no evidence that they will reduce smoking abroad. In thils regard'we wish to point out that tobacco is one of very few American industries that has the ability to prodvice a world class export. In sharp contrast to a persistent nationali trade deficit that quadrupled from $36 billion in 1980 to a record of $170 bi1'lion.in 1986, the tobacco industry has consistently produced an annual trade surplius. These exports, in turn, help to maintain a hi~gh standard of liviing and production,, across th~e nation. Thus, for example, new business generated by increased tobacco exports to Japan and Taiwan is expected to add nearly $800' mi~llion to the U.S. trade surplus and! has already requii1red stepped up production in cigarette plants in Virginia, Kentucky, Georgia and'N!orth Carolina. And if, as the Secretary of Commerce has recently reported, it is true th~at every bi~llion dollars in exports creates 25,0010 Americani jobs, it becomes clear that tobacco exporting has become essent-tal to the economic well-bei~ng of countless 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 constiltute little more than a thinly veiled attempt by anti-smoking zealots to export their health, views abroad. But the zealots are mistaken even in this regard. Smokers li~ving abroad willi not quit smo:ki~ng if American, brands are denied entry. They will simply smoke native brands or cigarettes made in Germany, the Netherlands, Engliand or elsewhere. In fact, total ci~garette consumption in countries abroad has no correlation with trends in American exports. For example, in Japan, sale of U.S. brands ils up sharply but overall cigarette consumption has been declinling for the past five years. moreover, a.U.S. trade poliicy that actually worked to our economic advantag,e by abolishing foreign trade barriers against tobacco exports would not increase smoking in countries overseas. ~ Smoking has always been an extremely popular practice. N!early ~ five 1986. trillion cigarettes were produced and consumed world-wide in About 593 bil'ili~on cigarettes, or better than one in ten, W © were American made. The U.S. market sh~are could expand considerably, if foreiign, trade barriers were lifted. This, iin ~ turn, would increase domestic prosperity. ~ ~i•y

Mr. John Bagrosky February 17, 1988 Page three In conclusion,, WLF'points out that U.S. trade polilcy has been carefully'considered by experts in economics, business:, trade and internationial finance and established by administration and congressional officials. Jurisdiction rests withithe 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:h1ave oversight onitrad!e iss,ue&. The concern of members of the House and Senate is obvious as evidenced!by the fact that a conference committee of 1199 conferees and 17 subcommittees is working the omnibus trade bill (HR 3). Neither your Committee nor the Su!rgeonlGenerall h~as been gilvenia mandate to export an anti-tobacco/health campaign. Nor do:folreign governments need help fromiyour inter-agency committee in determining their national smoking policies. The economic stakes are simply too high to permit domestic smoking policy to endanger national trade policy. Given this natilon's record trade deficit and the weak condlition of its financial markets following October 14, 1987's plunge, it makes noisense to impose restrictions inspired by a domestic anti-tobaccoicampaign on a U.S. trade policy and an'industry that has consistently contributed a favorablie trade balance of about $2 billion annually for the past siix years. To adopt an anti-tobac o trade policy woulid have no impact on worldismoking patterns. On the other hand, doing,so woulid definitely impose a damaging self-inflicted wound on the national economy. Respectfully submitted, pap-Daniel J. Po eo General Counsel DJP/cme enc. cc: !?onorable Otiis R. Bowen Secretary of Health & Human Services C. Everett Koop U.S. Surgeon General O T~' Q C.)