The Multinational Monitor

JUNE 1997 · VOLUME 18 · NUMBER 6


A Not-So Global Deal

"THE MARLBORO MAN WILL BE RIDING into the sunset on Joe Camel," intoned Robert Butterworth, Florida Attorney General (AG), at the celebratory news conference at which the U.S. state attorneys general announced the proposed tobacco settlement.

Butterworth got it right, but he left out one crucial element: if Congress legislates the tobacco deal into law, the Marlboro Man will be riding Joe Camel -- to Eastern Europe, Asia and elsewhere in the Third World.

For while the terms of the so-called "global" settlement with the tobacco industry will ban the use of cartoon images to promote smoking in the United States, the restriction will not apply to the tobacco companies' overseas operations.

In fact, the terms of the "global" settlement will not in any way restrict the tobacco companies' marketing, advertising, corporate acquisition, political influence-buying, lobbying or nicotine-manipulation strategies outside of the United States.

This is no small oversight. While smoking and tobacco use rates are relatively flat or declining in the United States, they are rising elsewhere, especially in the developing countries. By 2020, the World Health Organization predicts 10 million people will die annually from tobacco-related disease, 7 million in the developing world. Already, the major U.S. tobacco firms are selling more cigarettes abroad than domestically, and international sales are responsible for about half of Philip Morris and R.J. Reynolds' cigarette profits.

The U.S. tobacco companies are registering double-digit growth in international markets, and it is in Russia, China, the Philippines, Kenya, Argentina and elsewhere where they expect to hook their next generation of addicts.

In failing to include international tobacco controls, the settlement fails to affect industry behavior in the regions where the industry is most predatory and where it is pinning its hopes for future profitability.

Even worse, the settlement may actually exacerbate public health threats in the developing world. Here is how:

* In order to help generate the cash to pay off the settlement, the tobacco multinationals can be expected to intensify their invasion of the Third World and Eastern European markets.

* The settlement would shut off the flow of information that has strengthened other countries' tobacco control movements. The settlement does create a complicated process by which individuals or organizations could seek to force the disclosure of particular documents, but it is unwieldy, unlikely to be effective and sure to be subject to interminable tobacco-industry delaying tactics.

* The settlement will inevitably put a brake on the political momentum against Big Tobacco in the United States, with the media, government health officials and activists turning attention to other pressing matters. Since many other countries' tobacco control movements have fed on the momentum in the United States, the political decompression will hurt them -- even though they will not benefit from whatever gains the settlement may provide in the United States.

Most seriously, the settlement sacrifices the international public health community's greatest leverage over the tobacco industry -- lawsuits in the U.S. tort system -- without providing any international benefits. With few exceptions, other countries do not have legal systems that facilitate lawsuits such as those which finally brought Big Tobacco to the negotiating table. Even if governments or private parties are able to bring successful lawsuits against the U.S. tobacco companies, they are likely to find that the companies do not maintain sufficient assets in their countries to pay for the costs of the damage they have caused. If those governments or private parties try to collect damages in the United States, they may find their ability to do so limited by the caps included in the proposed settlement.

Fears of exactly this sort of outcome led tobacco control activists from 19 countries to issue a joint statement in June imploring U.S. settlement negotiators to include international issues on their agenda. "To avoid doing public health harm, a settlement must set a worldwide floor on U.S. tobacco company practices without limiting the ability of countries to require companies to exceed the global minimum standard," they stated.

The international advocates recommended a range of provisions to be included in a settlement. Among them:

Unfortunately, the settlement's terms do not include any of the international activists' recommendations. The deal's failure to include provisions to regulate the tobacco companies' overseas operations and to protect the rights of the companies' overseas victims is reason enough to reject it.

A special July/August issue of Multinational Monitor will analyze the tobacco deal in detail.

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