Dealing with Big Tobacco Bullies

December 16, 2013

This is a joint post with William Savedoff

The New York Times recently drew attention to Big Tobacco’s use of international trade and investment agreements to undermine anti-tobacco policies in low- and middle-income countries.  The report cites examples of tobacco companies suing or threatening to sue countries like Uruguay, Namibia and Uganda, arguing that tobacco rules unfairly restrict trade or hurt their investments.  This ‘bullying’ has made some countries choose not to enforce tobacco regulations to avoid legal battles against large companies.  The Times lays the onus for corrective action on the US Trade Representative (USTR).

But what about the institutions actually charged with supporting developing countries’ public health policies and programs like the World Bank and the US Agency for International Development? Or those international organizations with a mandate to oversee the interests of developing countries in their review and reform of taxation, trade and subsidy policies like the IMF and possibly the World Trade Organization?

In 2011, we blogged here, here and here on how agencies like the World Bank could use their money, technical assistance and policy dialogue to support cost-effective and inexpensive tobacco control measures.  For example, the World Bank could ride grants on policy-based or programmatic lending projects, conditioning their disbursement on maintaining tobacco taxes at two-thirds the level of price, or on routine reporting on the prevalence of tobacco use.

So far, there’s little evidence of progress.  Although tobacco surpasses every other risk factor for disease and disability except high blood pressure, the tobacco page on the World Bank’s website looks about the same as it always has, featuring a 1991 policy and some links to the World Health Organization. No lending operations are evident.  Over at the IMF, a web search on tobacco produces a 1999 report on the economics of tobacco control (excellent, but very dated!) and a link to the Malawi Memorandum of Economic and Financial Policies highlighting “improved price incentives for tobacco production.” 

Yet the case for action by the World Bank, the IMF and others is clear, even from experts that are not primarily concerned with health.  The recently released Global Health 2035 report led by Harvard’s Larry Summers cites “a crucial role” for international collaboration on global tobacco control, and for the IMF and the WTO on review of taxation, trade and subsidy policies to “ensure that health considerations are receiving proper weight.” A 2012 report from the Asian Development Bank clearly endorses higher tobacco taxes as a win-win for both health and fiscal policy.   This is all on top of the case made for years by the World Health Organization, the American Cancer Society, the Campaign for Tobacco-Free Kids, and many others.

While the USTR should pursue the sensible strategy laid out by Tom Bollyky at the Council on Foreign Relations, trade is an indirect way to get at the problem. What we really need is for the World Bank, the IMF, the regional development banks and others to provide big visible support for developing countries to implement their anti-tobacco policies. That’s the strongest way to face down the Tobacco Bullies.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.