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The Canadian government has enacted a law that could endanger the entire burley tobacco industry. U.S. tobacco growers need President Obama and the Office of the United States Trade Representative (USTR) to ensure that the Canadians honor their trade obligations and that other countries do not follow Canada’s lead in banning American blend cigarettes.
The Canadian government’s hypocrisy on trade is startling. Less than a month after Prime Minister Stephen Harper visited Washington to lecture President Obama about the dangers of “Buy American” laws, his government passed a “Buy Canada” tobacco ban that violates Canada’s World Trade Organization (WTO) responsibilities.
The legislation, C-32, was intended to ban candy-flavored tobacco products, a worthy goal that U.S. burley growers share. Unfortunately, C-32 morphed into an overreaching piece of legislation that prohibits the manufacture or sale of blended cigarettes that contain burley tobacco. This outcome is especially troublesome because American blend cigarettes are not candy-flavored in any way. The Canadian government conceded this vital fact during Parliament’s consideration of C-32, but it proceeded to target a legitimate American product anyway because small amounts of additives were used to reduce the harshness of the burley tobacco. U.S. burley growers educated policy-makers in Canada that they could rid the market of candy-flavored tobacco products without banning American blend cigarettes. The United States, France and Australia have all recently prohibited candy-flavored cigarettes and cigarillos without endangering jobs in the burley growing industry. But the Canadians decided to listen to uninformed rhetoric instead of hearing the facts.
It is also important to note that American blend cigarettes account for less than 1 percent of the cigarette market in Canada, and as the Canadian government’s own data show, these products are no more appealing to minors than traditional Canadian cigarettes that account for 98 percent of the market. Blended cigarettes also present no greater health risk than the flue-cured tobacco products that were not affected by C-32. There is simply no justification, outside of protectionism, for banning American blend cigarettes, while leaving the more popular Canadian style cigarettes alone.
While American blend cigarettes represent a small share of the Canadian market, they are the dominant type of cigarette in most of the countries around the world. Canada is an outspoken critic of the tobacco industry worldwide. If other nations follow the ill-conceived precedent set in Canada, the men and women who work in the burley industry could very well lose their livelihoods. To put this threat in perspective, the U.S. grew $336 million worth of burley tobacco in 2008, over 80 percent of which was exported to other countries where blended cigarettes are popular among adults.
At a time when so many sectors of the American economy are suffering, it is wrong for the burley tobacco industry to fall victim to an overreaching foreign law that violates the standards of free and fair trade. It is incumbent on USTR to send a strong message to Canada and other countries that banning blended cigarettes that contain burley tobacco is unacceptable and unnecessary to achieve the goal of reducing youth smoking.