US Cigarette Producers Ignite Antismoking Crusade in Thailand

TWO American exports, cigarettes and antismoking fervor, are at the eye of a political storm in Thailand. Last month, Thai officials surrendered to United States pressure in an 18-month-old trade feud and agreed to lift a ban on US cigarettes. Thailand's decision was forced by threats of American trade sanctions and a ruling under the General Agreement on Tariffs and Trade that the country could not exclude foreign brands.

Yet, in prying open the Thai smoking market, US cigarette producers have ignited an antismoking crusade, diplomats, and political observers say.

A ban on cigarette advertising remains intact despite the plea of US producers. And the dispute, which drew in the American antismoking lobby, has helped prod the Thai government into a campaign against smoking and advocating public health.

``The irony is that this controversy is creating the beginning of a public health movement in Thailand,'' says a Western diplomat.

``There was a loss and a gain. The loss was the market access. The gain was keeping the advertising ban,'' says Judith Mackay, a Hong Kong-based medical consultant who works with antismoking organizations in Asia. ``Antismoking now has a national prominence it never had.''

Thailand is the latest front in a growing war against tobacco companies in Asia.

Antismoking advocates say cigarette producers target women and children and charge the US is using its trade clout to promote free trade over health. Tobacco companies aggressively pursue new markets abroad to offset lagging demand at home.

So far, in the world market, the cigarette companies seem to be winning. According to a recent report by the US Agriculture Department, cigarette consumption in the US has declined continuously because of higher prices and taxes, spreading smoking restrictions and health worries.

But overseas in 1990, the US exported 160 billion cigarettes, three times the amount five years ago, the report said. The booming trade is centered on Asia where US trade muscle has pried open markets in Japan, Taiwan, and South Korea in recent years.

Thailand is the latest salvo. The country of 55 million people has 10 million smokers, almost half of the adult population. Smoking has become intertwined with culture and religion as many of the country's Buddhist monks smoke, and cigarettes are a frequent offering at temples.

The cigarette companies see Thailand as a prime target because, compared with the US, average per capita consumption of 700 cigarettes per year is still low, says Prakit Vatee-Satokit of the Thai Anti-Smoking Campaign Project, a nongovernment organization started in 1986.

In this developing agricultural country, disposable incomes are low, and, in villages and the countryside, many people still roll their own cigarettes, says Dr. Prakit, a Bangkok physician.

Still, demand is growing. Despite the ban, Thailand has a booming black market in smuggled foreign cigarettes, which cost double the price of Thai cigarettes, observers say.

With an estimated 5 percent of Thailand's market of 90 million packs a year, foreign producers hope that their legal foothold will broaden into a distribution network, boost their market share, and create new smokers, especially among Thai women. Two-thirds of Thai men smoke; only 6 percent of Thai women do.

However, the US has paid a high price for championing the cause of its cigarette manufacturers, diplomats and Thai observers say. The confrontation has further soured Thai-US relations at a time of escalating trade tensions between the two countries.

In the last five years, US investment in Thailand has grown and trade between the two countries has doubled. Still, the close allies have drifted apart over Thailand's widening trade surplus and trade disputes over rice subsidies, protection of garment and textile markets, aviation rights, and copyright and patent protection.

In December, US Trade Representative Carla Hills announced an investigation into Thai copyright piracy at the urging of US recording and motion picture industries. If copyright protection is not stepped up, the US could penalize Thailand with tariffs on a list of imports.

Equally damaging is a Thai threat to cut flights to Thailand by US airlines by more than 25 percent if a new aviation accord is not reached by March. The two governments are at odds over the freedom of US carriers to increase passenger and cargo capacity at the expense, Thailand says, of its carrier, Thai Airways International.

In a recent speech, US Ambassador Daniel O'Donohue called the resolution of the cigarette controversy ``an outstanding example of bilateral cooperation in handling a sensitive issue.'' However, privately, officials admit US credibility has been hurt. ``There's an image problem for the US,'' says a diplomat. ``It was a public relations and diplomatic disaster.''

Indeed, Western and Thai observers say the controversy continues to smolder. The dispute could flare anew over the issue of import and excise duties, which price legal American cigarettes out of the market, even smuggled US brands.

In addition, the powerful political connections of the cigarette smugglers and tobacco industry will complicate the working of any agreement, observers say.

Critics say the US and Thai antismoking forces who teamed up in the case have been tarnished by their alliance with Thai cigarette smugglers and the tobacco industry in opposing the US brands.

In the meantime, activists under the banner of the Thai Anti-Smoking Project Campaign are pushing for legislation that would ban the sale of cigarettes to those under 16, prohibit vending machine distribution and free samples, and devote 1 percent of sales revenues to aiding those with smoking-related diseases.

Still, the cigarette opponents admit there is no groundswell against smoking in Thailand. While smoking has been successfully banned in movie theaters, riders of buses openly flaunt threatened fines.

Indeed, industry critics say the best they can do is slow the rapid growth of cigarette consumption.

``Cigarette smoking and health is not on the priority list of policymakers,'' says Prakit, who heads Thailand's antismoking campaign. ``Cigarette consumption will continue to rise for another two decades. But if we had not done what we have, it would have risen much faster.''