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Thomas Bollyky on Tobacco and Trade

Author: Thomas J. Bollyky, Senior Fellow for Global Health, Economics, and Development
August 18, 2011
Council on Foreign Relations

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Tobacco is reemerging as a polarizing issue in U.S. trade policy. Last month, Representative Linda Sanchez (D-CA) circulated a letter demanding that the Office of the U.S. Trade Representative (USTR) exclude tobacco entirely from its eight-country Trans-Pacific Partnership (TPP) trade talks. Philip Morris asked USTR to use these TPP talks to eliminate tobacco tariffs and block the use of large health warning labels on cigarette packs. The U.S. Chamber of Commerce has joined in, supporting the tobacco industry's efforts on labeling.

It is unclear how U.S. officials will proceed, but the stakes are high. The position that the White House adopts on tobacco will set the precedent for future U.S. trade agreements.

A decision to exclude tobacco entirely will incite active TPP opposition from the tobacco industry and perhaps some international business groups. With the sluggish U.S. economy and the 2012 presidential election looming, the Obama administration is looking to the TPP talks to improve its trade credentials and standing among the business community. Tobacco is a legal product and the United States is its largest exporter.

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