Trade agreements and tobacco control policy: analysis of the impact of FCTC on regulatory contents of trade agreements from 2001 to 2019

As a first study evaluated the impact of FCTC on regulatory contents in trade agreements, we found that FCTC do have the impact on regulatory contents of trade agreements overtime. Also, the trade flows change when regulatory contents change were found.

In specific, the use of trade measure “the exclusion list” in trade agreements significantly decreased from 10% to 2011 to 0% in 2011. With significant increase of “FCTC contained contents” in trade agreements after 2011, the word counts of FCTC contents also increased with time. In addition, we found only EU-led trade agreements contain the term “FCTC”. With the finding, an additional analysis of trade values showed that, although the EU signed trade agreements with “FCTC”, the trade values of tobacco products still increased with time. But the gap in the average import and export values between countries involved in trade agreements with and without the FCTC content being widened with time.

Our results show that the use of “the exclusion list” in trade agreements decreased significantly. This trend might reflect the increased focus of global community on the issue of international trade and tobacco control [19]. It also reflects changing ideas about the use of exclusion list for tobacco products [4]. Prior to 2011, governments preferred approaches such as “the exclusion list” to avoid inconsistency between health measures and trade rules and because there were concerns that tobacco companies would sue [30]. However, McGrady (2007) argued that exclusion lists are problematic, especially because a contradiction between increasing and decreasing the price of tobacco and its relevant products might happen if the government failed consider the issue of domestic support. The exclusion policy would indirectly support protectionism and may thereby undermine the potential benefits of trade liberalization [36]. These reasons may explain the reduction in the use of exclusion lists to control tobacco products.

The finding that all the six trade agreements containing FCTC provisions were ratified after 2011 might be explained by the development of the COP4 of the FCTC in 2010 [22, 37]. In addition, one of the outcomes of COP4 [37] was a request that the FCTC to cooperate with the WTO, which may explain increased FCTC adoption. Since the cooperation between the WHO and the WTO signals a supportive relationship instead of parallel issues between trade and public health policies. FCTC contents were appeared in trade agreements and turned into more concrete with increased word counts after.

Similarly, the adoption of the “Protocol to Eliminate Illicit Trade in Tobacco Products” in FCTC COP5 may be the reason for the appearance of content related to the smuggling of excisable products. The geographic connection might also be the reason for the mention of smuggling in the agreements.

Interestingly, we found the six trade agreements containing FCTC provisions were all signed by the EU. The involvement of the EU implies that the EU played an active role in supporting the implementation of the FCTC [38]. The tobacco industry even tried to intervene the process of legislating the EU Tobacco Products Directive (hereinafter “TPD”) in 2001. Despite remaining political pressure and tobacco industry influence of campaigns to amend the TPD, the EU insisted on including FCTC Article 5.3 in the TPD Revision legislation in 2014. This article is not only a tool against industry interference but also keeps policymakers accountable and transparency when dealing with the tobacco industry [39]. After the TPD Revision, the EU continued to promote tobacco control policies vigorously in the FCTC and further incorporated FCTC provisions in new trade agreements.

The findings that the average import and export value of tobacco products of the six EU-led trade agreements containing FCTC is lower might be the evidence that incorporating FCTC provisions in trade agreements might reduce the trade flow of tobacco products between countries. However, the increasing exportation of tobacco products from EU to Ukraine and Korea under trade agreements with FCTC contents raise uncertainties.

The finding showed that rhetorical commitments to FCTC implementation are not necessarily linked to a commitment to implement its provisions. In addition, the formal inclusion of text on FCTC implementation may be a necessary, but not sufficient, condition for reducing the value of tobacco trade. Therefore, further research is required to fully understand the connections between the inclusion of FCTC provisions in trade agreements and reductions in the availability of tobacco products.

Besides, the WTO RTA Database may not cover all the trade agreements in the world, however, the trade agreements collected from the WTO RTA Database are representative. Because the WTO members and observers already cover 164 economies which representing 96.4% of global trade value. Additionally, the transparency mechanism established by the WTO General Council in 2006, has compelled WTO members and observers to notify the WTO of any new trade agreement. This mechanism enhances the reliability and sensitivity of the data from the WTO RTA Database [40].

Limitations

In this study, the Database of International Trade Statistics 2001–2019 of ITC comprises more complete information in the “value” but not the “quantity” of the export and import of tobacco products. Therefore, the trade performance of tobacco products does not indicate the quantity of tobacco products.

With the fact that keywords we used for searching as “tobacco” or “cigarette” were not showed in the “health exception provisions” in trade agreements, and the contents of such provisions were not analyzed in our study. Health exception provision might have potential contribution on tobacco control, further studies on the issue are recommended. In addition, a trade agreement which would encompass tobacco products without any keywords being used in this study is not covered by our study.

Similarly, the “Trans-Pacific Partnership (TPP)” shown in our study as regular agreement with keywords in its provisions of “Rules of Origin (ROO)” and “Other exclusive measures”. Since the TPP has provided a new possibility as the first regional trade agreement including tobacco carve-out measure by containing related language in the “general exceptions” chapter, further study on the issue is recommended.

Given that the EU is the exception in terms of trade agreements making explicit reference to FCTC and its implementation, the finding of this study is limited.

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