Not too surprisingly, Todd Tucker of Global Trade Watch is unhappy with the recent WTO panel ruling in the Clove Cigarettes case, where the panel found that a U.S. law which bans clove cigarettes while allowing menthol cigarettes violates the National Treatment obligation of the TBT Agreement. In a nutshell, a violation was found because Indonesian producers make mostly clove cigarettes, and thus fared much worse under the law than U.S. producers who make a lot of menthols. I'll mention some of his concerns, and then raise some questions that Todd is welcome to answer (or ignore) in the comments.
Todd seems to be concerned about what the U.S. might do to come into compliance. He says "the U.S. will have to water down the teenage smoking measure or face trade sanctions." But is that really accurate? It's true that the U.S. could comply by removing the ban on clove cigarettes, which would lead to a tiny, tiny amount more of flavored cigarettes being sold in the U.S. market: "Clove cigarette consumption accounted for approximately 0.1 per cent of the U.S. market between 2000 and 2009." On the other hand, it could attempt compliance by banning menthols, which would make a huge impact on smoking: "approximately one-quarter of the smoking population smokes menthol cigarettes." (Para. 2.25) Here's my question for Todd: If the WTO ruling led to stronger anti-smoking rules in the form of a menthol ban, would that be a good thing? As the Panel noted, "it is not in dispute that youth smoke menthol (and regular) cigarettes in far greater numbers than clove cigarettes." (Para. 7.394)
In addition, Todd is upset that a U.S. justification for the measure was not taken into account by the Panel. He cites the following U.S. argument:
the U.S. did not ban all types of cigarettes. In particular, regular tobacco and menthol cigarettes were excluded from the ban. The justification for these exclusions was that, unlike candy flavored or clove cigarettes, large numbers of adults are also hooked on regular and menthol cigarettes. To abruptly pull these products out of the market could cause a strain on the U.S. healthcare system (as lifetime addicts would instantly seek medical treatment for wrenching withdrawal symptoms) and might lead to a rise in illicit black market sales and associated crime. Nonetheless, various studies were ordered on the feasibility of banning menthol cigarettes in the future.
Putting aside the substance of the argument, I was surpised to see someone from a Public Citizen group express so much concern about the costs of regulation. This raises some questions I'd love to hear Todd's thoughts on:
- What is more important, a strain on the U.S. health care system, or the health of U.S. citizens who would benefit from a removal of flavored cigarettes from the market?
- As a general matter, when the U.S. government is considering regulating for health and safety purposes, should it avoid doing so whenever this would lead to higher costs, black market sales, or crime?
Finally, I think that what's really bothering Todd is the following. In his view, it should be completely up to the U.S. government to decide whether de facto discrimination against foreign products is necessary in order to enact legislation that, on the whole, furthers public policy goals such as health. If a little discrimination is required to get the legislation passed, then so be it, and WTO rules should not interfere. But if that is his view (and Todd should feel free to correct me if it's not), then let me ask Todd this:
- Do you have any objection if foreign governments put this kind of discrimination into their own legislation in ways that hurt U.S. producers and workers?
- Should there be any international regulation of discrimination of this sort? If so, what would it look like?
