Transcript Presenter Disclosures Hadii M. Mamudu, PhD, MPA The following personal financial relationships with commercial interests relevant to this presentation existed during the past 12

Presenter Disclosures
Hadii M. Mamudu, PhD, MPA
The following personal financial relationships with
commercial interests relevant to this presentation
existed during the past 12 months:
No relationships to disclose
Tobacco Industry, Regional Trade
Agreements and Tobacco Control in
Sub-Saharan Africa
Mamudu HM, PhD, MPA; Crosbie E, MA; Veeranki SP, DrPH, MD
American Public Health Association Annual Meeting
Tuesday October 30, 2012
Overview
O Background
O Aims of the study
O Methods for this study
O Mixed-method
O Quantitative data
O Qualitative data
O Analysis
O Preliminary results
O Discussion and conclusion
O Future of this research
Background
O Globalization of tobacco
O Worldwide diffusion of tobacco use
O >1.3 billion smokers worldwide
O Increasing usage in low and middle-income countries
O 80% of worldwide usage
O Influence of the tobacco industry
O Key facilitators for this globalization
O The natural expansion of tobacco industry
O National policies (e.g., the United States)
O Policies of international organizations (e.g., World Bank
and FAO in the past)
O Trade liberalization
Background
O Trade liberalization agreement
O The General Agreement on Tariffs and Trade (GATT),
1947
O World Trade Organization in 1994
O Regional trade agreements (RTAs)
O Bilateral investment/trade treaties (BITs)
O >4,000 worldwide
O Purpose of trade agreements
O Remove trade barrier
O Tariffs and non-tariffs
O Open (closed) markets to trade
O Effects
O Increase tobacco consumption (Chaloupka and
Laixuthai, 1996; Taylor et. al, 2000)
Goals
O To assess the impact of regional trade
agreements (RTAs) in Africa on cigarette sales
O Economic Community of West African States
(ECOWAS)
O Southern African Development Community (SADC)
O To understand how tobacco industry used RTAs
to expand operation and undermine tobacco
control
Methodology
O Mixed-methods Approach
O Quantitative analysis of cigarette sales
O Archival analysis of the tobacco industry activities
O Data sources
O Quantitative
O Mostly unavailable
O Index mundi
O
O
Compilation of data from the U.S. Department of Agriculture
Archival documents
O Tobacco industry documents
O
Legacy online library
O Analysis
O Time series-analysis (trends)
O Review and evaluation of documents
O About 500 documents
Preliminary Results
O Regional Groupings: A Galaxy
Source: Yang and Gupta, 2005
Preliminary Results
O Regional Groupings: A Galaxy
Source: McIntyre and Kalinga, 2005
Preliminary Results
Structure of African Regional Groupings
1960
1980
1990s
1975: Economic Community of West
African States (ECOWAS)
1993: Revised ECOWAS Treaty
1973: Economic Community of West
Africa (CEAO)
West African Monetary Union (UMOA)
1994: West African Economic and
Monetary Union
1983: Economic Community of Central
African States (ECCAS/CEEAC)
1994: Economic and Monetary Union of
Central Africa (CEMAC)
1981: Preferential Trade Area
1980: Southern African Development
Coordination Conference (SADCC)
1986: Intergovernmental Authority on
Drought and Development (IGADD)
1992: Southern Africa Development
Community (SADC)
1993: Common Market of Eastern and
Southern Africa (COMESA)
1993: Cross Border Initiative (CBI)
1996: Intergovernmental Authority on
Drought and Development (IGADD)
1999: East African Community (EAC) II
West Africa
1966: Customs Union of West African
States (UDEAO )
Central Africa
1961: Bank of the Central African
States (BEAC)
1964: Economic and Customs Union
of Central Africa (UDAEC)
Southern and Eastern Africa
1889, revised 1969: Southern
African Customs Union (SACU)
Common Monetary Area (CMA)
1967: East African Community (EAC) I
O
Source: UN Food and Agriculture Organization
Preliminary Results
• Trade liberalization in Africa
O Economic Community of West African States (ECOWAS)
O Chapter 8, Article 35 of revised treaty, 1993
• Southern Africa Development Community (SADC)
• Chapter 7, Article 21(3)(c) of revised treaty, 1992
Preliminary Results
O ECOWAS
• SADC
1994
1995
1996
1997
1998
West Africa
1.1
1.4
1.5
1.6
1.7
South Africa
2.6
2.4
2.4
2.4
2.5
Benson & Hedges Sales
(Growth – vol. in bn
(tid/zbu50a99)
Preliminary Results
O Regional Integration in Africa: Role of International
Organizations
O UN Conference on Trade and Development (UNCTAD)
O Initiative for economic development
O Economic Commission of Africa
O April 1998: Lagos Plan of Action
O An initiative of then OAU to promote economic development
O So, what is the TI role in this?
Preliminary Results
O Tobacco Industry and RTAs in Africa
Regional Trading blocs are expected to be of vital and strategic importance
and relevance to our business especially in relation to the proposed clusters
in AMESCA . CORA has an important role to play in bringing in advice to the
business and I hope you will keep this as one of your major commitments at
the Opco level. After all you are the fountains of all political advice and
counsel to the companies . You need to collaborate quite closely with [with]
your Finance and Company Secretariat departments to determine the course
of action in this area .
Please make a note as to the actual [viabilility] and seriousness of your
trading bloc and how you think they will relate to the WTO . Make a note as to
whether your country is a signatory of the trading bloc and indeed the WTO .
• February 5, 1996, Letter to BAT Managers in Africa (tid/umj44a99)
Preliminary Results
O Tobacco Industry and RTAs in Africa
Sothern Africa Development Community and Other Trading Blocs
I had a telephone conversation with Mr Richard Manning this morning
following the [Worldawre]/ODA meeting held yesterday . The purpose of my
inquiry is to get more information on the SADC and other trading blocs . We at
BAT are seeking to understand the evolution and development of these blocs
in order to be able to take advantage of their growth for our business in the
Africa region .
• March 1, 1996, Letter to Head of Africa Division of ODA (tid/gmj44a99)
Preliminary Results
O Tobacco Industry and RTAs in Africa: Priority Regions
• “Southern and West Africa”
There is much hope that with the death of the cold war, ideological and super power
rivalry and with the pressure from multilateral agencies, these trade blocs will be
forced by circumstances to develop and enhance economic opportunities across
borders. One certainty however is that two key elements will influence this trend: the
WTO protocol which is staggered in timings and the ascendency of global brands and
the power/influence of multinationals. In the end it may be a case of join them or
perish and the prediction is that most countries will choose to join rather than perish.
Survival at national level being almost impossible in the face of globalisation, most
countries will most likely take refuge in trade blocs and in so doing unwittingly find
themselves orchestrating globalisation and free trade. For us, the key therefore is to be
ready to partake of this opportunity with our international brands - hence the essence
of our Company plan vision stated at the outset.
• BAT report: Analysis of “Trading Blocs” (tid/mmb34a99)
Preliminary Results
O Tobacco Industry and RTAs in Africa: Priority Regions
• “Southern and West Africa” -- ECOWAS
ECOWAS, with its 16 members from Francophone and Anglophone West Africa is now
23 years old yet seems to have made little if any progress in the area of trade and
tariffs . Much seems to have been done in terms of easing travel and migration
though . ECOWAS has the objective to establish a customs union among member
states by the year 2005 . Again, like COMESA members of ECOWAS do ratify the treaty
selectively and individually thus not providing the necessary critical mass that is
currently needed . For example Ghana has ratified all the ECOWAS conventions and
protocols except three.
• BAT report: Analysis of “Trading Blocs” (tid/mmb34a99)
Preliminary Results
O Tobacco Industry and RTAs in Africa: Priority Regions
• “Southern and West Africa” -- SADC
Looked at in comparison, it seems evident that SADC, ECOWAS, COMESA and
UDEAC are the main trade blocs to plan around . SADC clearly seems to be the most
organised, receives the most assistance and advice from the West and is therefore the
one about which there will be most optimism. The realisation of SADC protocols in most
sectors is timed to happen in the new millennium . There is hope that all the fourteen
members will accede to the various protocols on schedule and that SADC will therefore
be a reality . The major stumbling blocs seem to be the fear of South Africa's dominant
role coupled with its non membership of the Lome convention and on the other hand
Mugabe's quite obvious rivalry for leadership of SADC with Mandela. It can be predicted
that this is likely to get worse not better once Thabo Mbeki succeeds Mandela.
• BAT report: Analysis of “Trading Blocs” (tid/mmb34a99)
Preliminary Results
O Tobacco Industry and RTAs in Africa: Priority Regions
• BAT “Southern Africa Area: 1998-2000 Plan”
With the slow emergence of the SADC and COMESA trading blocs, as well as
pressure from GATT, a general lowering of tariffs will eventually prevail .
However, since most countries fear South Africa dominance of the trading
community, the development will be slow and without a clear blueprint and target for
specific tariff reductions . We simply don't know if or when free trade areas or lower
tariffs will become a reality. We can, however, avail ourselves of preferential tariffs
within COMESA and a bilateral trade agreement between Zimbabwe and Malawi that
allows duty free import of cigarettes . In addition, the Lome Convention will continue to
offer export opportunities to the EU from Lome member countries (e .g., Zimbabwe) .
• BAT report (tid/nad65a99)
Preliminary Results
O Tobacco Industry and RTAs in Africa: Key Strategies
• BATs 2000-2002 Plan: Consolidation of markets
Overall strategy in West Africa is to consolidate and defend the Group's
strong market positions, and particularly to reverse competitor gains in the
lower price segments in Nigeria. The contracts with Coralma across
Francophone Africa are presenting increasing operational problems and are
being reviewed .
• BAT report (tid/vbi23a99)
Preliminary Results
O Tobacco Industry and RTAs in Africa: Key Strategies
• Factory Rationalization: “closure of factories and supply the
markets from elsewhere” (tid/qqo08a99)
“Factory Rationalisation: There is also an increasing momentum towards
factory rationalisation. This is due partly to surplus capacity in some countries,
partly to the opening-up of borders as groups of countries from free-trade
areas, and partly to the ever-increasing need for greater cost competitiveness.”
(BAT’s 1993 report; tid/gvqo8a99)
“Africa: Trade barriers remain significant in Africa and there is a low probability
that they will be reduced in the short term . With the closure of the Ibadan
factory in Nigeria in 1995. There is now no more than one factory in each
country.” (BAT’s 1996-1998 Company Plan; tid/zbu50a99)
Discussion
O Factors that limited the attempt to tease out effects of RTAs
O Inadequate and poor quality of data
O Galaxy of RTAs in Africa
O Still, trend analysis shows increase in cigarette sales
O RTAs facilitated activities of tobacco companies
O Possible explanations for how RTAs helped cigarette sales
O Factory rationalization
O Consolidation of production
O Economies of scale through larger markets
Future Research
Determinants of Cigarette Sales (volume/per capita) <<Fixed-effect
models>>
Consumption
RTAs
openness
index
GDP Per
Capita
Political
liberalization
t-1
Intercept
Adjusted R2
F
Production
Exports
Import
Acknowledgement
Rafie Boghozian-Khoygani, MBA
Research Data Manager
College of Nursing
East Tennessee State University
David M. Kioko
College of Public Health
East Tennessee State University
Yi He, DrPH
Department of Biostatistics and Epidemiology
East Tennessee State University
Yang Chen, MS
Department of Biostatistics and Epidemiology
East Tennessee State University
Preston Harness, BA
College of Public Health
East Tennessee State University
THANK YOU!!