Like many trade disputes, this one involves health standards and whether they are being abused for protectionist purposes. It centers on the clove and tobacco blends known as kretek that dominate the tobacco market in Indonesia but are little smoked outside the Southeast Asian country.
The U.S. Food and Drug Administration banned cigarettes with fruit, confectionery or clove flavors last September, arguing such cigarettes were particularly attractive to children.
But the U.S. ban does not include flavored cigarettes that are produced widely in the United States and smoked by about 19 million Americans.
Indonesia argues that discriminates against foreign producers of flavored tobacco to help domestic manufacturers.
"They have to prove that menthol doesn't have a bad impact," said the official, who asked not to be identified.
A spokeswoman for the U.S. Trade Representative's Office said U.S. officials were studying Indonesia's request for consultations, which comes as the two countries have been taking steps to boost trade and investment ties.
President Barack Obama abruptly canceled a trip to Indonesia in March to lobby for healthcare reform, but is expected to visit the country this year.
MENTHOL YES, CLOVES NO
U.S. tobacco companies told the FDA on March 31 that adding menthol did not make cigarettes more harmful or addictive [ID:nN31100715].
Under WTO rules, the two countries now have 60 days to resolve their differences through consultations, otherwise Indonesia can ask the WTO to create a panel of experts to rule on the issue.
The case is only the fifth brought at the WTO by Indonesia, the world's 21st biggest exporter.
Kretek cigarettes account for the bulk of tobacco consumption in Indonesia, the world's fifth biggest tobacco market, although unflavored or "white" sticks are gaining in popularity.
Indonesian exports of cigarettes and cigars totaled $357.8 million in 2008, the last year for which data is available.
Only relatively small numbers of kretek cigarettes are exported, and anecdotally they are coveted by young people in the United States who see them as an alternative to more conventional brands.
Foreign tobacco producers, keen to gain a bigger share of expanding markets for cigarettes in emerging economies, have been buying up Indonesian manufacturers to acquire kretek brands and expertise and build on the potential for white stick sales.
Last June, the world's No. 2 cigarette maker, British American Tobacco, bought an 85 percent stake in Indonesia's fourth largest cigarette maker by volume, PT Bentoel Internasional Investama.
Philip Morris International acquired the majority of Hanjaya Mandala Sampoerna in 2005. Other Indonesian manufacturers include Gudang Garam and unlisted conglomerate Djarum.
Supervising the consultations with Indonesia will be one of the first tasks of the new U.S. ambassador to the WTO, Michael Punke, whose Senate confirmation was held up for six months by a Republican senator from the tobacco-growing state of Kentucky.
Mar 29, 2010
Smokeless tobacco more popular than cigarettes
Some high school nurses say they have noticed fewer students smoking cigarettes, but they can't be sure if more are switching to smokeless tobacco as a substitute.
"(There is) definitely less smoking that we can detect on their clothes," said Marlborough High's Virginia Gadbois, a school nurse since 1986, after the release earlier this month of a survey that indicates teens have switched from cigarettes to other tobacco products.
The report, conducted by the state health and education departments and funded by the U.S. Centers for Disease Control, surveyed middle and high school students about their tobacco habits. It concluded that for the first time, high school students are using more smokeless tobacco and cigars than regular cigarettes.
The study says 16 percent of high school students said they had used cigarettes in the past 30 days, whereas 17.6 percent said they had used other kinds of tobacco products.
High school nurses say they haven't noticed any increase in such products, but don't deny students are using them.
"I'm not saying it's not here, I'm sure it is. I'm saying I'm not seeing it," Gadbois said.
She said she no longer smells smoke wafting from the girl's bathroom.
Nicole Marcinkiewicz, a nurse at Natick High School, said she hasn't dealt with any complications due to smokeless tobacco, such as oral cancer.
Still, organizations like Tobacco Free Mass, a policy organization based in Framingham, say youth are drawn to products like flavored tobacco lozenges, small flavored cigars and dissolvable bags of flavored tobacco.
"It's not surprising given the fact that the tobacco industry markets their products to young people," Executive Director Russet Morrow Breslau said.
These products cost between $1 and $7, she said, whereas a pack of cigarettes costs as much as $9.
"That points to the fact that youth are price-sensitive. They are turning to these less expensive products that are marketed to them," Morrow Breslau said.
The education department's study follows a proposal in Gov. Deval Patrick's fiscal 2011 budget to increase the sales tax on smokeless tobacco and cigars to the same level as regular cigarettes.
While these products are already taxed at rates varying from 30 to 90 percent, the governor's budget would raise the taxes to about 110 to 120 percent of their cost - the same increase imposed on cigarettes in 2008.
"These things weren't increased back then, and the idea is to sort of catch up," said Robert Bliss, a spokesman for the Department of Revenue.
Some Massachusetts legislators say raising the tax is a good way to discourage young people from buying tobacco.
"This is a product that's causing a lot of damage to people, hurting a lot of people, killing a lot of people. It makes no sense to me that a product like that wouldn't be taxed," said Sen. Jamie Eldridge, D-Acton, the Senate sponsor of a bill mirroring Patrick's budget proposal. The bill was recently sent to a study committee.
Rep. Peter Koutoujian, D-Waltham, who led the 2008 effort to increase cigarette tax by $1 per pack, spoke Wednesday at an anti-smoking rally.
"I'm not interested in taxes for raising money. However, if you can reduce consumption of a product that's going to be addictive, that'd be a tax I'd consider," Koutoujian said yesterday.
Other legislators, including Rep. Danielle Gregoire, D-Marlborough, and Rep. Alice Peisch, D-Wellesley, are wary of any new taxes.
Peisch said she likes the idea of an increased tax to dissuade young people from using tobacco, but she is hesitant to support any new taxes this year.
Peisch said her stance "is less connected to the merits of the particular tax on smokeless tobacco and more connected to the lack of support for taxes at this point in general."
Speaker Robert DeLeo has said the House budget will not include new taxes.
"(There is) definitely less smoking that we can detect on their clothes," said Marlborough High's Virginia Gadbois, a school nurse since 1986, after the release earlier this month of a survey that indicates teens have switched from cigarettes to other tobacco products.
The report, conducted by the state health and education departments and funded by the U.S. Centers for Disease Control, surveyed middle and high school students about their tobacco habits. It concluded that for the first time, high school students are using more smokeless tobacco and cigars than regular cigarettes.
The study says 16 percent of high school students said they had used cigarettes in the past 30 days, whereas 17.6 percent said they had used other kinds of tobacco products.
High school nurses say they haven't noticed any increase in such products, but don't deny students are using them.
"I'm not saying it's not here, I'm sure it is. I'm saying I'm not seeing it," Gadbois said.
She said she no longer smells smoke wafting from the girl's bathroom.
Nicole Marcinkiewicz, a nurse at Natick High School, said she hasn't dealt with any complications due to smokeless tobacco, such as oral cancer.
Still, organizations like Tobacco Free Mass, a policy organization based in Framingham, say youth are drawn to products like flavored tobacco lozenges, small flavored cigars and dissolvable bags of flavored tobacco.
"It's not surprising given the fact that the tobacco industry markets their products to young people," Executive Director Russet Morrow Breslau said.
These products cost between $1 and $7, she said, whereas a pack of cigarettes costs as much as $9.
"That points to the fact that youth are price-sensitive. They are turning to these less expensive products that are marketed to them," Morrow Breslau said.
The education department's study follows a proposal in Gov. Deval Patrick's fiscal 2011 budget to increase the sales tax on smokeless tobacco and cigars to the same level as regular cigarettes.
While these products are already taxed at rates varying from 30 to 90 percent, the governor's budget would raise the taxes to about 110 to 120 percent of their cost - the same increase imposed on cigarettes in 2008.
"These things weren't increased back then, and the idea is to sort of catch up," said Robert Bliss, a spokesman for the Department of Revenue.
Some Massachusetts legislators say raising the tax is a good way to discourage young people from buying tobacco.
"This is a product that's causing a lot of damage to people, hurting a lot of people, killing a lot of people. It makes no sense to me that a product like that wouldn't be taxed," said Sen. Jamie Eldridge, D-Acton, the Senate sponsor of a bill mirroring Patrick's budget proposal. The bill was recently sent to a study committee.
Rep. Peter Koutoujian, D-Waltham, who led the 2008 effort to increase cigarette tax by $1 per pack, spoke Wednesday at an anti-smoking rally.
"I'm not interested in taxes for raising money. However, if you can reduce consumption of a product that's going to be addictive, that'd be a tax I'd consider," Koutoujian said yesterday.
Other legislators, including Rep. Danielle Gregoire, D-Marlborough, and Rep. Alice Peisch, D-Wellesley, are wary of any new taxes.
Peisch said she likes the idea of an increased tax to dissuade young people from using tobacco, but she is hesitant to support any new taxes this year.
Peisch said her stance "is less connected to the merits of the particular tax on smokeless tobacco and more connected to the lack of support for taxes at this point in general."
Speaker Robert DeLeo has said the House budget will not include new taxes.
Mar 15, 2010
Bill takes aim at cigarette smugglers
A new law targeting cigarette smugglers has cleared both houses of the General Assembly and now goes to the governor for his signature.
The House of Delegates on Wednesday joined the Senate in unanimously passing Senate Bill 476, sponsored by Sen. John C. Watkins, R-Midlothian.
The bill would establish additional penalties for "any person who sells, purchases, transports, receives, or possesses unstamped cigarettes" in Virginia.
Cigarettes are stamped in most states to ensure that the tax on them has been paid. If a pack of cigarettes is sold in Virginia without a stamp, that means no tax has been paid to the commonwealth.
In Virginia, the tax on a pack of cigarettes is 30 cents. In South Carolina, the tax per pack is 7 cents, and that state doesn't stamp its cigarettes. Smugglers often purchase cigarettes in states with low tobacco taxes and sell them illegally in states with higher tobacco taxes, pocketing the difference as profit.
If Gov. Bob McDonnell signs SB 476 into law, first-time offenders would be charged $2.50 a pack, up to $500. For a second violation within 36 months, the fine would be $5 per pack, up to $1,000. And for a third violation, the penalty would be $10 per pack, up to $50,000.
If authorities determine that the violator had a willful intent to defraud the commonwealth, the penalty would be $25 a pack, up to $250,000.
On another tobacco-related issue, the House last week also gave final approval to SB 478, which would change the tax on moist snuff tobacco.
Currently, snuff is taxed at 10 percent of the manufacturer's sales price. Under SB 478, which was proposed by Watkins, the tax would be 18 cents an ounce.
The House voted 92-6 for the bill. It passed the Senate last month, 38-2. If McDonnell signs the bill, it would take effect on Jan. 1, 2011.
Bill Phelps, a spokesperson for the U.S. Smokeless Tobacco Co., said the bill would help both tobacco companies and the commonwealth. Phelps said it makes sense to change the tax on snuff to an excise tax, as Virginia taxes gasoline or beer. That way, the tax is based on the amount of the product sold, not the quality.
"We think that taxing moist tobacco by weight ... is a fair way to tax the product," Phelps said.
He said taxing snuff by the ounce will provide a more stable source of revenue for the commonwealth, because the price of snuff has gone down every year for the past six years.
The House of Delegates on Wednesday joined the Senate in unanimously passing Senate Bill 476, sponsored by Sen. John C. Watkins, R-Midlothian.
The bill would establish additional penalties for "any person who sells, purchases, transports, receives, or possesses unstamped cigarettes" in Virginia.
Cigarettes are stamped in most states to ensure that the tax on them has been paid. If a pack of cigarettes is sold in Virginia without a stamp, that means no tax has been paid to the commonwealth.
In Virginia, the tax on a pack of cigarettes is 30 cents. In South Carolina, the tax per pack is 7 cents, and that state doesn't stamp its cigarettes. Smugglers often purchase cigarettes in states with low tobacco taxes and sell them illegally in states with higher tobacco taxes, pocketing the difference as profit.
If Gov. Bob McDonnell signs SB 476 into law, first-time offenders would be charged $2.50 a pack, up to $500. For a second violation within 36 months, the fine would be $5 per pack, up to $1,000. And for a third violation, the penalty would be $10 per pack, up to $50,000.
If authorities determine that the violator had a willful intent to defraud the commonwealth, the penalty would be $25 a pack, up to $250,000.
On another tobacco-related issue, the House last week also gave final approval to SB 478, which would change the tax on moist snuff tobacco.
Currently, snuff is taxed at 10 percent of the manufacturer's sales price. Under SB 478, which was proposed by Watkins, the tax would be 18 cents an ounce.
The House voted 92-6 for the bill. It passed the Senate last month, 38-2. If McDonnell signs the bill, it would take effect on Jan. 1, 2011.
Bill Phelps, a spokesperson for the U.S. Smokeless Tobacco Co., said the bill would help both tobacco companies and the commonwealth. Phelps said it makes sense to change the tax on snuff to an excise tax, as Virginia taxes gasoline or beer. That way, the tax is based on the amount of the product sold, not the quality.
"We think that taxing moist tobacco by weight ... is a fair way to tax the product," Phelps said.
He said taxing snuff by the ounce will provide a more stable source of revenue for the commonwealth, because the price of snuff has gone down every year for the past six years.
Mar 10, 2010
Lawmakers raise cigarette taxes across USA
Governor Bill Richardson has plenty of company as he considers raising the state cigarette tax which has become a popular method of revenue enhancement in many other states besides New Mexico.
The state legislature passed a 75 cent per pack increase on the cigarette tax slated to begin on July 1st. Governor Richardson will likely sign the bill which is expected to generate about $33 million a year in revenue for the state's recession-shrunken bankroll.
New Mexico joins Utah, Kansas, South Carolina, and Georgia that have tobacco tax hikes on their agendas. And during the last year, 16 other states have raised cigarette taxes.
Tony Penate is a smoker who questions the tax’s effectiveness. "The number one cause of preventable deaths in this country is obesity now-- not cigarette smoking-- so I think I'd like to see a tax on soda before they put another tax on cigarettes."
Currently, the highest tax imposed on cigarettes is in the state of Rhode Island at $3.46 a pack while South Carolina sets the lowest pack tax at seven cents.
New Mexico’s tax on a pack of cigarettes is 91 cents and would raise to $1.66 a pack under the new legislation.
The state legislature passed a 75 cent per pack increase on the cigarette tax slated to begin on July 1st. Governor Richardson will likely sign the bill which is expected to generate about $33 million a year in revenue for the state's recession-shrunken bankroll.
New Mexico joins Utah, Kansas, South Carolina, and Georgia that have tobacco tax hikes on their agendas. And during the last year, 16 other states have raised cigarette taxes.
Tony Penate is a smoker who questions the tax’s effectiveness. "The number one cause of preventable deaths in this country is obesity now-- not cigarette smoking-- so I think I'd like to see a tax on soda before they put another tax on cigarettes."
Currently, the highest tax imposed on cigarettes is in the state of Rhode Island at $3.46 a pack while South Carolina sets the lowest pack tax at seven cents.
New Mexico’s tax on a pack of cigarettes is 91 cents and would raise to $1.66 a pack under the new legislation.
Mar 1, 2010
Superintendent bans tobacco in Seattle parks
Seattle Parks Superintendent Timothy Gallagher announced a ban on tobacco in Seattle parks Wednesday, overruling an advisory board that last week voted against it.
His ruling put an end to the public debate over whether people should be allowed to smoke and chew in Seattle's parks. In the end, Gallagher wrote in a memo, the ban was a health issue.
The ban aims to protect park users from secondhand smoke and cut down on litter caused by cigarette butts. It was also spurred by concerns that smokers set a poor example for children.
"The negative health effects of tobacco are well documented," Gallagher wrote. "As an agency that has a fundamental mission to support the health and well-being of Seattle residents, it is appropriate and beneficial to prohibit the use of tobacco products at parks and park facilities."
The ban takes effect April 1.
Gallagher's decision is within his authority as parks superintendent, but the Seattle City Council could pass an ordinance to overrule it.
Gallagher was on vacation Wednesday and couldn't be reached for comment.
Mayor Mike McGinn said through a spokesman that he supports Gallagher's move.
Smoking was among activities considered in an effort to list "all the things that can get you kicked out of a park," said Dewey Potter, the department spokeswoman.
The new code of conduct includes prohibitions as varied as drug use and sexual misconduct, disturbing park wildlife and the improper use of park bathrooms. The board briefly considered a ban on spitting but scrapped the idea because public outcry was so immense, Potter said.
Violators of the code of conduct face being banned from parks for 24 hours or a whole year, depending on the offense and how many times they've been caught.
The appointed Board of Park Commissioners voted 3-2 on Feb. 11 to restrict smoking to select areas of parks instead of banning it outright.
"I think that Tim really wanted this [the ban] to happen," Board of Park Commissioners Chairwoman Jackie Ramels said Wednesday.
Ramels voted against the smoking ban. Her thinking, she said, was: "Let's take it in smaller steps. Let's start with the beaches and the playfields and the sports fields, and after a while we can go to the whole park."
Gallagher said in his memo that he was opting for completely smoke-free parks after receiving public support and a recommendation from Public Health — Seattle & King County.
Sally Bagshaw, who heads the Seattle City Council's parks committee, said she thought the park board's solution was "more reasonable."
It's unusual for the superintendent to overrule the advisory panel's recommendation.
The last time in recent memory was in 2004, when the board wanted to exclude the Ballard Bowl skatepark from the design of a new Ballard Civic Center Park. Then-parks Superintendent Kenneth Bounds went against the board's recommendation and left the skatepark standing.
His ruling put an end to the public debate over whether people should be allowed to smoke and chew in Seattle's parks. In the end, Gallagher wrote in a memo, the ban was a health issue.
The ban aims to protect park users from secondhand smoke and cut down on litter caused by cigarette butts. It was also spurred by concerns that smokers set a poor example for children.
"The negative health effects of tobacco are well documented," Gallagher wrote. "As an agency that has a fundamental mission to support the health and well-being of Seattle residents, it is appropriate and beneficial to prohibit the use of tobacco products at parks and park facilities."
The ban takes effect April 1.
Gallagher's decision is within his authority as parks superintendent, but the Seattle City Council could pass an ordinance to overrule it.
Gallagher was on vacation Wednesday and couldn't be reached for comment.
Mayor Mike McGinn said through a spokesman that he supports Gallagher's move.
Smoking was among activities considered in an effort to list "all the things that can get you kicked out of a park," said Dewey Potter, the department spokeswoman.
The new code of conduct includes prohibitions as varied as drug use and sexual misconduct, disturbing park wildlife and the improper use of park bathrooms. The board briefly considered a ban on spitting but scrapped the idea because public outcry was so immense, Potter said.
Violators of the code of conduct face being banned from parks for 24 hours or a whole year, depending on the offense and how many times they've been caught.
The appointed Board of Park Commissioners voted 3-2 on Feb. 11 to restrict smoking to select areas of parks instead of banning it outright.
"I think that Tim really wanted this [the ban] to happen," Board of Park Commissioners Chairwoman Jackie Ramels said Wednesday.
Ramels voted against the smoking ban. Her thinking, she said, was: "Let's take it in smaller steps. Let's start with the beaches and the playfields and the sports fields, and after a while we can go to the whole park."
Gallagher said in his memo that he was opting for completely smoke-free parks after receiving public support and a recommendation from Public Health — Seattle & King County.
Sally Bagshaw, who heads the Seattle City Council's parks committee, said she thought the park board's solution was "more reasonable."
It's unusual for the superintendent to overrule the advisory panel's recommendation.
The last time in recent memory was in 2004, when the board wanted to exclude the Ballard Bowl skatepark from the design of a new Ballard Civic Center Park. Then-parks Superintendent Kenneth Bounds went against the board's recommendation and left the skatepark standing.
Subscribe to:
Posts (Atom)