Tobacco Documents Online

W:ASII I\ fA'O\ 1,1:~~(;mLFwA 1).VTl C)~~.N 1705 N' STREET, N. W' WASHINGTON„ D. C 20036 202-857-024 0 February 17, 198& Mr. John Bagrosky Executive Secretary Interagency Committee on Smoking and Health Park Building, Room 1-10 5600 Fishers Lane Rockville, MD 208'57, Re: Tobacco and U.S. Trade Policy Dear Mr. B.agrosky: We noted with interest an item that appeared in the.Federal Register announcing the Fe ruary 1&th meetiing,of the Interagency Committee on Smoking and Health at whichiyou will be discussing "the issue of tobacco andl United States trade policy." 52 Fed. Reg. 48764 (December 24, 1987). Although this notice d'id not solicit comments, and we plan on sending a legal representative from the Washington Legal Foundation to attend tomorrow'ss meeting, we are nonetheless sufficiently concerned about your Committee's proposed activities to wilsh to express our views formalliy via thiis letter. By way of introduction, the Washington Legal Foundation ("WLF") is a national, non profiit public i~nterest law and policy center. WLF is headquarterd in Washington, D.C. and presently has over 20'0,000 members, supporters, and contributors nationwide. WLF engages in litigation and iniadministrative proceedings which affect the public and national interest inia wilde variety of ways. In the past, WLF'has noted~and commented upon ilil- considered attempts by both governmental and private groups to ban cigarette and tobacco advertising from the airwaves. See,, e.g., the two enclosed WLF Legal Backgrounders. More specifically, in~this instance the Foundation is concerned that the activities of your Commilttee -- a: Committee which, so far as we have been able to determine, has no authority or expertise in the complex issue of tobacco and Uni,ted States trade policy -- may impose a damagi~ng,, self-inflicted wound on, 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

Mir. J'ohn Bagrosky February 17, 1988 Page t'wo by an over-zealous domestic anti-smoking agenda. While such ill-advised regulatory efforts will definitelly harm our natiional export position, there is no evidence that they will reduce smoking abroad. In this regard we wish to point out that tobacco is one of very few American industries that has the abiliity to produce a worl'd class export. In sharp contrast to a persistent nationaL trade deficit that quadrupled' from $36 billion in 1980 to a recordi of $170 billilion ini 1986, the tobacco industry has consistently produced an annual' trade surpluis., These exports,, ini turn, help to:maintain aihigh standard of liiving and production, across the nation. Thus, for example, new business generated by iincreased tobacco exports to Japan and Taiwan is expected~.to add nearly $8010 millionito the U.S. trade surplus and has already required stepped up production ini cigarette plants in Viirginia, 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 2'5,0'00 American jobs, it becomes clear that tobacco exportiing has become essential' to the economiic well-being of countless Americanifamillies. As WLF vi.ews it, a U.S. trade policy desiigned to decrease Americaniexports of tobacco makes no economic sense. Rather it wouil'd appear to constitute little more than a thinly veiled, attempt by anti-smokiing zealots to export their health views abroad. But the zealots are mistaken even in this regard. Smokers living abroad will not quit smoking if American brands are denied entry. They will simply smoke native brands or cigarettes made iin Germany, the Netherlands, England or elsewhere. In fact, total cigarette consumption in countries abroad has no correlation withitrends iniAmerican exports. For example, in Japan„ sale of U.S. brands is up sharply but overall cigarette consumption has been declining for the past five years. MLoreouer,, a U.S. trade policy that actually worked to our economic ad'vantag,e by abolishing foreign trade barriers agaii.st tobacco exports would not increase smoking, in cou'ntries overseas. Smoking has always been an extremely popular practiice. Nearly five trillion cigarettes were produced andlconsumed'worlid-wide in 1986. About 593 billion ciga:rettes, or better than one ini ten,, were American made. Thie Ui.S. market share could: expand considerably, if foreign trade barriers were lifted. This, in turn, would, increase domestic prosperity.

N;r . Johni Ba.grosky Februiary 117, 1938 Page three In conclu~sion, WLF points out that U,.S. trad'e policy 11as beenicarefully consid'ered by experts in econom~ics, busiiness, trade arrd'international finance andlestablished by adminilstration, and'. congressi~onal officialls. Jurisdiction rests with the White House via the U1.S. Special'. Trade Representative and with such cabinet departments as State, Commerce, Agri.cullture, and Treasury. Several standing,committees of Congiress also have oversight onitrad'e issues. The concern of members of the House and Senate is obvious as evidenced by the fact that a.co:nference committee of 199'conferees and 17 subcomm~ittees is working the ominiibus trade bill (HR 3). Neither your Committee nor the Suirgeon.General h~as been given a mandate to export an anti-toblacco/health campaign. Noir dlo forei~gn governments need help from your inter-agency committee in determining their natiional smoking policiles. The economic stakes are simply too high to permit domestic smokiing policy to endanger national trade policy. Given this nation's record trade deficiit and!the weak condition of iits financial markets following October 1~4, 19'87's plunge, it makes no sense to impose restrictions i~nspired by a domestic aniti-tobacco campaign on ai U.S. trade policy and an!industry that has consistently contributed a favorable trade balance of about $2 billilon annuall!y for the past six years. To adopt an anti-tobacco trade policy would have rro impact on world~smoking patterns. On the other hand, doing so would definitely impose a damaging self-infliicted wound!on the national' economy. Respectfully submitted, DJ,P/cme enc. cc: Honorable Otis R. Bowen Secretary of Health & Human Services C. Everett Koop U.S. Surgeon General