Government Helps Push Cigarettes Overseas

May 31, 1994|By Ian Johnson | Ian Johnson,Bureau of the CensusSun Staff Writer

WASHINGTON -- In a sunny archive a few steps away from the Washington Monument, boxes of cassettes hold testimony to the U.S. tobacco industry's export genius. The cassettes, part of an oral history project that documents famous advertising campaigns, show how cigarette giant Philip Morris deftly used American-style marketing to turn the Marlboro man into a globetrotting cigarette salesman.

One of the campaign's most successful stops was Hong Kong. There, Philip Morris downplayed the Marlboro man (studies showed that Chinese did not respond well to a wizened old guy chasing cows through the dirt) and sponsored activities aimed at teens and young adults. Most of all, the tobacco company won customers by equating smoking with America:

"Hong Kong is such a small place, it's congested. America to them, it's the land of opportunity," William Kwan of Philip Morris Asia's Hong Kong office told historians from the Smithsonian Institution. "It's open. It's freedom. It's spacious. It's a dream."

Little wonder that Philip Morris linked smoking with the United States. For the past 10 years, the federal government has been tobacco's best friend in finding new markets. While losing no opportunity to browbeat tobacco companies and smokers at home, Washington has bullied foreign countries into allowing sophisticated advertising and marketing campaigns that have increased the rate of smoking, especially among women and young people.

This international lobbying effort on behalf of tobacco, however, is starting to come unraveled. The Clinton team, which has unleashed an unprecedented attack on tobacco at home, has slowly begun to withdraw U.S. support for tobacco's overseas forays, although it did recently use America's weight to stymie tobacco regulation in Thailand.

America still does not export the sort of health practices that it advocates at home, but domestic anti-tobacco sentiment seems be slowly seeping into its export policy.

"The United States government treats tobacco as a trade problem," said David D. Yen, chairman of the John Tung #F Foundation, a Taiwan foundation that fights smoking. "It's not a trade problem but a health problem -- for us."

After Hong Kong, the companies set their sights on prosperous Taiwan, Japan, South Korea and fast-growing Thailand and China. But these countries posed a challenge not present in Taiwan; their markets were closed to imports and the local market dominated by a government-controlled monopoly.

Enter Uncle Sam: Starting in 1985, the U.S. Trade Representative began pressuring Asian countries to open their markets. Using potent Chapter 301 of the 1974 Trade Act, U.S. negotiators threatened retaliation unless talks resulted in success by a certain date.

The successes came fast. The first country to submit was Japan in 1986, followed later that year by Taiwan and South Korea in 1988, giving U.S. manufacturers access to 60 million smokers and another 70 million potential smokers.

Those new markets helped U.S. tobacco manufacturers rack up increased foreign sales that helped offset dramatic decreases in cigarette sales back home. In Philip Morris' case, foreign sales of cigarettes make more money than domestic sales.

Reagan and Bush administration officials said the campaign to open foreign markets to U.S. tobacco companies was only designed to give U.S. companies a fair shot at closed markets. Many Asians are heavy smokers, they said, so it was only in support of free trade that they asked Asian countries to let in U.S. tobacco companies.

"My view [is] if a nation is selling its own cigarettes to its own citizens, that it ought not to bar the trade of cigarettes by another nation," former U.S. Trade Representative Carla Hills said.

But Philip Morris Cos. and RJR Nabisco Holding Corp. were doing more than just taking smokers away from tobacco monopolies in Japan, Taiwan and South Korea. As in Hong Kong, the American tobacco companies' sophisticated marketing campaigns were changing smoking patterns by winning new smokers among the young and women.

Increased smoking among young people has been especially dramatic, with the number of cigarettes sold to minors increasing from 6.5 billion to 36.1 billion between 1986, the year U.S. companies entered the Japanese market, and 1992. Health officials say the trend is not surprising; shortly after entering the Japanese market, U.S. tobacco companies began setting up vending machines on street corners, giving minors easy access to cigarettes.

The strategy of targeting young people seems deliberate. As the Smithsonian's oral history project shows, Philip Morris used promotional material to reach youths in discos and through support of sports programs -- "the places where young people go," in the words of Philip Morris' Mr. Kwan.

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