Tobacco Loss at Home Is a Gain Overseas

Under the stress of battling US regulators, the internal tobacco industry mindset is getting easier to see. It realizes it has lost the battle for America's hearts and minds. It knows the public holds Big Tobacco in low esteem and expects it to make as few concessions to our health as possible.

So why do tobacco corporations bother to continue the charade and keep putting their case before an unreceptive public? Big Tobacco has turned up the volume on domestic US controversy to distract us from a higher-stakes game: the more lucrative international tobacco markets. Philip Morris's overseas sales are up 146 percent since 1990. With markets shrinking for Big Tobacco in North America and Western Europe, analysts project profits will grow at 20 percent a year in the rest of the world.

We correctly call it an epidemic when 400,000 American families a year lose loved ones to tobacco. Yet this is a fraction of the world pandemic. The World Health Organization projects that unless global trends reverse, tobacco will be connected to the deaths of a half billion of the 5.5 billion people alive today.

Bad as they are in the US, tobacco marketing and anti-regulatory tactics are more aggressive and dangerous abroad. In countries where cigarette advertising is restricted, tobacco transnationals practice "brand stretching." In Malaysia RJR Nabisco operates the "Salem Power Station" music store aimed at teens. In Ukraine, Philip Morris lures young smokers with its Marlboro Adventure Team sporting contests.

Public health experts in these countries know that while regulating tobacco in the declining US market may make us feel good, focusing on tobacco's apparent setbacks here only masks its advance overseas. As Konstantin Krasovsky of Ukraine's Alcohol and Drug Information Center points out, "the proposed US settlement is just a new way of expanding the tobacco industry" abroad. Under the McCain bill now in Congress, overseas subsidiaries as well as food divisions are shielded from liability and exempt from paying anything toward Big Tobacco's settlement with the US government. In effect, the bill tells tobacco transnationals that once the US deal is cut, they can be as aggressive as they like overseas, using subsidiaries to dodge accountability. Meanwhile on the international front, RJR Nabisco and Philip Morris have been working secretly on the Multilateral Agreement on Investment (MAI), a treaty designed to loosen foreign investment and regulatory restrictions on transnational corporations. The MAI is much bigger than NAFTA, or GATT, but without the public scrutiny and press coverage. It would allow transnational tobacco corporations to sue foreign governments directly, as legal equals, and would void national and local laws that conflict with it.

World Health Organization standards are needed as a legal countermeasure. But it will take more than laws to rein in Big Tobacco. Consumer action gets its attention. Since the 1994 launch of a boycott targeting RJR Nabisco and Philip Morris, which owns Kraft, Post, and Maxwell House, Big Tobacco's food divisions have fallen behind growth projections.

Global marketing of tobacco is a US policy concern, not only because of staggering human costs worldwide, but also because of implications for US marketing. Silence in the US about overseas marketing speaks volumes: Tobacco corporations don't want to remind us that international markets make good testing grounds for the US. If tobacco transnationals learn how to end-run around advertising limits, target children, and bully regulators overseas, they can learn to apply those same honed techniques in the US.

So when RJR Nabisco's CEO threatens more aggressive cigarette advertising here, as he did recently, we should remember tobacco's global tactics and take the threat seriously.

Our domestic tobacco problems must be addressed in a global context.

* Kathryn Mulvey is the executive director of INFACT, a Boston-based corporate watchdog group.