International Trade

The controversy surrounding cigarette advertising and promotion has intensified in recent years in the United States and abroad. In many countries, cigarettes can be advertised with few restrictions--in print and broadcast media as well as through cigarette companies' sponsorship of cultural and sporting events. Health proponents, however, view these activities as contrary to international efforts to reduce cigarette consumption and the illnesses associated with smoking. This report (1) elaborates on the continuation of the conflicting U.S. government policy of pursuing antismoking initiatives domestically while helping U.S. cigarette companies sell their products abroad and U.S. government regulation of cigarette exports compared with exports of other potentially harmful products or substances; (2) summarizes the restrictions on cigarette advertising and promotion imposed in Japan, Taiwan, South Korea, Thailand, Hong Kong, Malaysia, and Indonesia and describes alleged violations by U.S. cigarette companies as reported by the foreign governments; and (3) reviews the advertising and promotional activities of U.S. cigarette companies in these countries and specifically looks at whether these companies are targeting children and nonsmokers.

GAO found that: (1) the Department of Health and Human Services (HHS) participated in the September 1992 cigarette trade talks with Taiwan; (2) foreign health officials have expressed concerns about the U.S. Trade Representative's tobacco-related trade activities; (3) HHS provides financial and technical support for international antismoking health programs and implementation of tobacco control and smoking cessation programs; (4) U.S. cigarette exports are generally exempt from federal controls and regulations governing the export of potentially harmful products or substances; (5) the Japanese government made no allegations that U.S. cigarette companies violated advertising and promotional trade restrictions; (6) the South Korean government cited certain cases in which U.S. cigarette companies violated implicit advertising restrictions, but it did not provide sufficient information to determine the extent of the infractions; (7) the Thai government claimed that U.S. cigarette companies continued to indirectly advertise by sponsoring sporting events; (8) the Hong Kong government provided some examples of U.S.-brand cigarette advertisements that were allegedly targeted to nonsmokers and children; (9) the Indonesian government stated that cigarette companies heavily sponsored their products through rock concerts, athletic events, bazaars, and seminars; (10) the U.S. Cigarette Export Association provided documents to support its position that member tobacco companies have not actively promoted well-known trademarks on products intended for children; (11) U.S. cigarette companies generally controlled the advertising and promotional campaigns for their brands marketed in Asian countries; (12) U.S. cigarette brands did not have dominant market shares in any Asian country, except Hong Kong; (13) during 1990, U.S. cigarette companies spent more money on advertising than on promotional sponsorships; and (14) the majority of cigarette promotional activities were held at sporting or cultural events.