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Groups laud exclusion of tobacco from AFTA tariff list

Online Publication Date: 17 July 2012

A Malaysian coalition of tobacco control groups respond positively to the reported agreement by ASEAN health ministers to exclude tobacco from the ASEAN Free Trade Agreement (AFTA) tariff list.

Malaysia’s Health Minister Liow Tiong Lai had said the decision was made during the ASEAN Health Ministers Meeting in Thailand a week earlier as part of efforts to fight against non-communicable diseases.

According to a news report by The Star/ANN which appeared on July 10, 2012, the AFTA agreement which comes into force in 2015 provides for the reduction of tariffs of goods to below 5%. (http://my.news.yahoo.com/asean-does-not-want-tobacco-afta-list-090001547.html)

The Malaysian Council for Tobacco Control – which is made up of about 40 Malaysian health, consumers, faith-based and university associations – said that given the dangerous and addictive properties of tobacco products, it is “not only appropriate but crucial that tobacco be removed from AFTA and in any free trade agreement negotiated currently or in the future.”

MCTC also called for Malaysia to be consistent over the Trans-Pacific Partnership Agreement (TPPA) and EU-Malaysia FTA with its stand on AFTA and “completely carve out tobacco from both these agreement texts if they value Malaysian people's health.”

MCTC Press Statement - 12th July 2012

On behalf of the Malaysian Council for Tobacco Malaysia (MCTC) I would like to comment on the Health Minister’s statement re Tobacco & AFTA. I would like to applaud the ASEAN Health Ministers for agreeing to revisit the issue of tobacco and AFTA after 20 years when this trade bloc was officially signed in Singapore on 28 January 1992. This is timely now that the Secretary-General of ASEAN had declared a smoke-free policy for ASEAN at this year's WCTOH in Singapore.

I would also like to give special thanks and express our full support for Malaysia’s Minister of Health, Dato’ Seri Liow Tiong Lai, for enlightening us with the good news that a consensus was reached to remove tobacco from the AFTA during the recent 11th ASEAN Health Ministers Meeting in Phuket Thailand.

The Health Ministers are right on target for several reasons. Generally in Free Trade Agreements, the main objective for lowering or eliminating import duty for any commodity is to increase market access, tobacco and tobacco products are unlike other traded goods. Collectively it is the only consumer product that injures and kills its addicted customers if used as intended by the manufacturers – the tobacco industry. It is the only legal product that has an international treaty (i.e. WHO Framework Convention on Tobacco Control – WHO FCTC) ratified by over 170 countries, to control its demand and production. Within AFTA, liberalization of trade (including the tobacco trade) would facilitate movement of tobacco products from exporting countries within ASEAN, thus posing great health hazards to the ASEAN people. Ethically, is it correct to allow the producers of something so dangerous and addictive to be given so much privilege? It was reported in our newspapers not too long ago, that even the US Government had taken USD 280 billion legal actions against prominent tobacco companies for racketeering. How is it then that this same industry deserves the right and liberty to propagate the deadly product to our people and our children in ASEAN, in the name of free market when it endures intense restrictions in its country of origin?

Tobacco is highly addictive and in the global scale, it kills over 5 million lives annually, while in Malaysia over 10,000 people die from tobacco related diseases every year. So, without doubt, an extremely dangerous product such as tobacco cannot be treated the same way as we would treat any other products. Under AFTA, tobacco was initially listed in the sensitive list by Malaysia, but by 2010 it has now been fully liberalized. Tobacco trade liberalization (or elimination of import duties/ tariffs) will lead to very harmful impact on public health esp. tobacco control measures; i.e.

• low tobacco tariff will reduce cost for cigarette production

• cheaper cigarettes will in turn increase consumption and thus raise tobacco attributable health effects & economic burden.

We are already seeing the grave outcome of the tobacco epidemic with increasing incidence and prevalence of fatal diseases like heart attacks, chronic obstructive lung diseases, cancers and strokes. Epidemiologically, the heavy toll borne by the society’s past tobacco use will not decline in the near future instead the situation will only get worse, unless Governments take bold steps to curb the tobacco problem right now. The Ministry of Health itself had listed tobacco as the Number One risk factor in its official document on the National Action Plan for managing Non-Communicable Diseases (NCDs) – the number one killer in the country.

Therefore, it is not only appropriate, but crucial that tobacco be removed from AFTA and in any Free Trade Agreement negotiated currently or in the future. I would also like to draw the attention of our political leaders, particularly the Prime Minister and the Minister of Trade and Industry to the highly secretive Trans Pacific Partnership Agreement (TPPA) and the EU- Malaysia FTA that are currently being negotiated. They must be consistent with the ASEAN and make the decision to completely carve out tobacco from both these Agreement texts if they value Malaysian people's health. Information from the leaked TPPA chapters gives us great concerns as we learn that foreign investors ( including transnational tobacco industry) have the rights to sue governments of TPPA member countries when these governments regulate their businesses to protect public health.

The decision made by the ASEAN Health Ministers to exclude tobacco under AFTA must be fully supported by all governments and the whole population of ASEAN. We in MCTC will stand firm behind the Ministry of Health and would like to appeal to the Minister of International Trade and Industry, Minister of Domestic Trade and Consumer Affairs and the Prime Minister for their support and to uphold the 1Malaysia slogan, “People first, performance now!”.

As the leader of a responsible caring government the Prime Minister must do the right thing by putting health before trade or profit. The country must implement with sincerity its commitment to the FCTC which it signed and ratified many years ago and not allow the Tobacco Industry to hijack the Government's agenda for the people. The Ministry of Finance must increase tax on tobacco particularly cigarettes by 2 fold this year in order to make up for the loss opportunity of collecting millions of ringgit this year. We therefore like to take this opportunity to propose that cigarette tax be increased by at least 2 sen per stick, that is, from 24 sen to at least 26 sen per stick.

Dr Molly Cheah,

President, MCTC


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