March 29, 2000

Common Sense Goes Up In Smoke

By Hugh High, professor of economics at the University of Cape Town, South Africa.

The World Health Organization lists smoking as a disorder under its International Classification of Diseases. Because of this sleight of hand, smoking is being treated as an epidemic, and one of the largest health crusades ever devised has been set in motion. But this crusade will not just be about television advertisements of men and women with diseased lungs, or living smokers telling us to quit. It is intended to have the full force of international law.

The World Health Organization has just published its draft Framework Convention on Tobacco Control, which can be seen at www.who.int on the Web. On Monday, health ministers from around the world gathered for three days of discussion about the convention in Geneva. It makes scary reading for anyone who believes that laws should be made by accountable legislatures and that consumers ought to be free to make informed choices without undue interference. If you are a shareholder in a major tobacco company you should consider shedding the stock.

The WHO convention (FCTC) will condemn smokers world-wide to pariah status, encourage a black market in cigarettes that will make the one in cocaine seem trivial, and will reduce revenues for treasuries. The latter will especially harm developing countries. Ministers the world over should reject the WHO's paternalistic nannying.

The WHO Tobacco Convention claims these Draconian measures are necessary since an alleged 10 million people will die annually from tobacco use by 2030, 7 million of those in developing countries. Yet this figure is based on just one dubious World Bank assertion, not a thorough study. Worse still, the FCTC says that of these 10 million "half will die in middle age." But middle age to the World Bank includes an age as old as 69. Not exactly middle age for most developing countries.

The world-wide restrictions that WHO proposes be placed on smoking are substantial. There is to be guaranteed protection from passive smoking -- that is, no smoking anywhere indoors where a non-smoker may be. Taxation should make up at least two-thirds of the pack price -- a massive hike for developing-country smokers. Other proposals include a ban on cigarette-vending machines, the removal of tobacco from retail price (inflation) indices, and WHO regulation of all chemicals in tobacco products. The WHO envisions bans on all forms of advertising and sport sponsorship -- say goodbye to decent funding for polo in Buenos Aires and football in Cape Town. It also wants to ban sales of cigarettes in packs of less than 20, ban any use of terms like "light" or "mild" to describe products, mandate that tobacco packaging include at least 50% coverage with anti-tobacco pictures and warnings, require data submission by tobacco companies to the WHO nannies, and secure international legal compensation for "victims" of tobacco. The list goes on.

One could reasonably argue that the WHO has a role in informing smokers around the world about potential harm from smoking. And one could even reasonably argue that there should be international standards regarding health warning labels on tobacco products. But the WHO is undermining the democratic prerogatives of nations when it tries to harmonize tax rates across the world. Not only would harmonization be economically inefficient, as the World Bank report acknowledges, but it would drive the market underground. Smuggled and counterfeit cigarettes already account for over 20% of the market in developed countries like Britain, costing the U.K. treasury over $3 billion a year.

Yet Britain has significant well-policed customs control. It doesn't require a fertile imagination to realize the damage to the treasury of even a middle-income, moderately developed country like South Africa that would result from smuggling if South Africa had the same tax rates as Britain. The incentives to smuggle and counterfeit are enormous since the profits to be made from dishonesty are huge and the penalties far lower than for drugs like cocaine.

'Nico-Nazis'

The WHO draft says it will "eradicate smuggling." This is impossible. The higher the tax rates, harmonized or otherwise, the greater the number of cigarettes that will be smuggled. No doubt the WHO will direct funds from the massive tobacco taxes into work schemes and expand the number of customs officers. These "Nico-Nazi" cops will have to be given massive powers to search and seize suspect packages, since tobacco is so easy to smuggle. The invasion of privacy is painful to contemplate, especially in many countries of the world that are barely struggling to free themselves from oppression.

It is not the WHO's job to dictate how countries balance the economic growth that tobacco farming, manufacture and sales provide with the health danger tobacco poses. After all, smoking is a choice, it is not a disease. Even being addicted is a choice. There are more former smokers in the U.S. than there are smokers.

Drafting the WHO's convention is, of course, creating numerous jobs for Western researchers and bureaucrats. This is primarily paid for by Western taxpayers, especially Western smokers. Ministers in developing countries should stop the FCTC before it starts hurting their revenues and taking away the pleasure smoking brings to millions in their countries. Perhaps more importantly, ministers should not allow their democracies to be further undermined by the nannies of the WHO.

-- From The Wall Street Journal Europe