Abstract
BackgroundIn principle, trade and investment agreements are meant to boost economic growth. However, the removal of trade barriers and the provision of investment incentives to attract foreign direct investments may facilitate increased trade in and/or more efficient production of commodities considered harmful to health such as tobacco. We analyze existing evidence on trade and investment liberalization and its relationship to tobacco trade in Sub-Saharan African countries.MethodsWe compare tobacco trading patterns to foreign direct investments made by tobacco companies. We estimate and compare changes in the Konjunkturforschungsstelle (KOF) Economic Globalization measure, relative price measure and cigarette prices.ResultsPreferential regional trade agreements appear to have encouraged the consolidation of cigarette production, which has shaped trading patterns of tobacco leaf. Since 2002, British American Tobacco has invested in tobacco manufacturing facilities in Nigeria, Kenya and South Africa strategically located to serve different regions in Africa. Following this, British America Tobacco closed factories in Ghana, Rwanda, Uganda, Mauritius and Angola. At the same time, Malawi and Tanzania exported a large percentage of tobacco leaf to European countries. After 2010, there was an increase in tobacco exports from Malawi and Zambia to China, which may be a result of preferential trade agreements the EU and China have with these countries. Economic liberalization has been accompanied by greater cigarette affordability for the countries included in our analysis. However, only excise taxes and income have an effect on cigarette prices within the region.ConclusionsThese results suggest that the changing economic structures of international trade and investment are likely heightening the efficiency and effectiveness of the tobacco industry. As tobacco control advocates consider supply-side tobacco control interventions, they must consider carefully the effects of these economic agreements and whether there are ways to mitigate them.
Highlights
In principle, trade and investment agreements are meant to boost economic growth
Tobacco control proponents have primarily engaged with three aspects of trade liberalization as it pertains to tobacco: trade agreements and policy space, tobacco company influence and tobacco affordability [10,11,12]
Regional trade and investment agreements This study focuses on the six main regional trade agreements (RTAs) in sub-Saharan Africa which cover 39 out of 48 countries and have bearing on the economic policy of the member governments: the Economic Community of West African States (ECOWAS), the Common Market of Eastern and Southern African States (COMESA), the Southern African Development Community (SADC), the West African Economic and Monitory Union (WAEMU), the Southern African Customs Union (SACU) and the East African Community (EAC)
Summary
Trade and investment agreements are meant to boost economic growth. the removal of trade barriers and the provision of investment incentives to attract foreign direct investments may facilitate increased trade in and/or more efficient production of commodities considered harmful to health such as tobacco. Appau et al Globalization and Health (2017) 13:81 This deepening liberalization is thought to be problematic for tobacco control [9]. There has been a proliferation of challenges to tobacco control measures through trade and investment agreements, including recent claims that plain packaging of tobacco products violates provisions within these agreements [13]. Investment agreements include investor-state dispute settlement mechanisms that permit companies to directly challenge governments through international arbitration when they believe a policy violates an agreement. Philip Morris sought compensation for purported damages [15,16,17] Such actions can constrain and deter government decisions to strengthen tobacco control considering the cost of litigation, for smaller countries
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
