From cigarette smuggling to illicit tobacco trade

Background Tax policy is considered the most effective strategy to reduce tobacco consumption and prevalence. Tax avoidance and tax evasion therefore undermine the effectiveness of tax policies and result in less revenue for governments, cheaper prices for smokers and increased tobacco use. Tobacco smuggling and illicit tobacco trade have probably always existed, since tobacco's introduction as a valuable product from the New World, but the nature of the trade has changed. Methods This article clarifies definitions, reviews the key issues related to illicit trade, describes the different ways taxes are circumvented and looks at the size of the problem, its changing nature and its causes. The difficulties of data collection and research are discussed. Finally, we look at the policy options to combat illicit trade and the negotiations for a WHO Framework Convention on Tobacco Control (FCTC) protocol on illicit tobacco trade. Results Twenty years ago the main type of illicit trade was large-scale cigarette smuggling of well known cigarette brands. A change occurred as some major international tobacco companies in Europe and the Americas reviewed their export practices due to tax regulations, investigations and lawsuits by the authorities. Other types of illicit trade emerged such as illegal manufacturing, including counterfeiting and the emergence of new cigarette brands, produced in a rather open manner at well known locations, which are only or mainly intended for the illegal market of another country. Conclusions The global scope and multifaceted nature of the illicit tobacco trade requires a coordinated international response, so a strong protocol to the FCTC is essential. The illicit tobacco trade is a global problem which needs a global solution.

The Bigger, the Better: Coalitions in the GATT/WTO

What does it take to make a coalition successful? Bigger coalitions are more likely to be successful because the GATT/WTO is a consensus-based institution and countries are informally penalized if they isolate themselves. Through a Bayesian statistical analysis, the article corroborates the above hypothesis. To further investigate the research question, qualitative case studies of the G-10 in the Uruguay Round and the Public Health Coalition in the Doha Round are conducted. These cases show that the more convincing the framing of a position, the better are the chances of coalitions keeping a large number of followers and supporters, thereby affecting their odds of success. By building a unique database and applying a new research design to the topic, the study rigorously tests theories about coalitions that had previously only been proposed but not empirically analyzed.