International Trade:

Advertising and Promoting U.S. Cigarettes in Selected Asian Countries

GGD-93-38: Published: Dec 31, 1992. Publicly Released: Jan 4, 1993.

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Pursuant to congressional requests, GAO reviewed the advertisement and promotion of U.S. cigarettes in Japan, Taiwan, South Korea, Thailand, Hong Kong, Malaysia, and Indonesia, focusing on: (1) the conflicting U.S. government policies of pursuing antismoking initiatives domestically while assisting U.S. cigarette companies in selling their products abroad; (2) U.S. government regulation of cigarette exports compared with exports of other potentially harmful products; (3) the restrictions on cigarette advertising and promotion imposed in the countries; and (4) the advertising and promotional practices of U.S. cigarette companies in these countries.

GAO found that: (1) the Department of Health and Human Services (HHS) participated in the September 1992 cigarette trade talks with Taiwan; (2) foreign health officials have expressed concerns about the U.S. Trade Representative's tobacco-related trade activities; (3) HHS provides financial and technical support for international antismoking health programs and implementation of tobacco control and smoking cessation programs; (4) U.S. cigarette exports are generally exempt from federal controls and regulations governing the export of potentially harmful products or substances; (5) the Japanese government made no allegations that U.S. cigarette companies violated advertising and promotional trade restrictions; (6) the South Korean government cited certain cases in which U.S. cigarette companies violated implicit advertising restrictions, but it did not provide sufficient information to determine the extent of the infractions; (7) the Thai government claimed that U.S. cigarette companies continued to indirectly advertise by sponsoring sporting events; (8) the Hong Kong government provided some examples of U.S.-brand cigarette advertisements that were allegedly targeted to nonsmokers and children; (9) the Indonesian government stated that cigarette companies heavily sponsored their products through rock concerts, athletic events, bazaars, and seminars; (10) the U.S. Cigarette Export Association provided documents to support its position that member tobacco companies have not actively promoted well-known trademarks on products intended for children; (11) U.S. cigarette companies generally controlled the advertising and promotional campaigns for their brands marketed in Asian countries; (12) U.S. cigarette brands did not have dominant market shares in any Asian country, except Hong Kong; (13) during 1990, U.S. cigarette companies spent more money on advertising than on promotional sponsorships; and (14) the majority of cigarette promotional activities were held at sporting or cultural events.

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