[Congressional Record Volume 155, Number 58 (Tuesday, April 21, 2009)]
[Extensions of Remarks]
[Pages E912-E914]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           FAMILY SMOKING PREVENTION AND TOBACCO CONTROL ACT

                                 ______
                                 

                               speech of

                           HON. VIRGINIA FOXX

                           of north carolina

                    in the house of representatives

                        Wednesday, April 1, 2009

  Ms. FOXX. Mr. Speaker, ``The Family Smoking Prevention and Tobacco 
Control Act,'' which is before us today, contains a so-called ``special 
rule for cigarettes'' in Section 907 of the bill that would ban 
flavored cigarettes--with the exception of menthol flavored cigarettes.

[[Page E913]]

  Since the legislation allows the sale of menthol cigarettes, which 
are produced in the United States and in my home State, while banning 
clove cigarettes, which are imported primarily from Indonesia, the 
Indonesian Government has made it clear that it considers this 
provision an attempt to discriminate against imported clove cigarette 
products in favor of a competing U.S. product--and thus section 907 in 
the bill runs contrary to the free-trade commitments the United States 
has made as part of the WTO.
  According to WTO rules Mr. Speaker, an imported ``good'' (clove 
cigarettes) should receive treatment that is ``no less favorable than 
that provided to a domestic good.'' Adhering to this principle would 
appear to require that clove cigarettes be treated no less favorably 
than menthol cigarettes and thus under this bill both should be exempt 
from the prohibition on flavored cigarettes or both should be banned in 
order to ensure there is no unfair discrimination in the treatment of 
the two products. The latter option is not an option at all in my 
opinion but neither is ignoring the concerns of our ally Indonesia, a 
country well known to our President.
  For years now, senior officials of the Indonesian Government have 
repeatedly and doggedly attempted to communicate their country's 
concerns to U.S. legislators and executive branch policy-makers alike--
to no avail. The communique from the Indonesian Ambassador to Chairman 
Waxman, as well as the Indonesian Trade Minister's dispatch to former 
Ambassador Schwab clearly articulate the imperative the Indonesian 
Government places on the trade violation contained in ``The Family 
Smoking Prevention and Tobacco Control Act.''
  Last year, the HHS Secretary sent a letter to Congress expressing 
various concerns about Mr. Waxman's bill on behalf of the 
Administration. Among his concerns he included the following statement 
about the bill's prohibition on imported clove cigarettes that reflects 
the concerns expressed by the Indonesian Government:

       There is a further issue regarding the bill that I would 
     like to bring to your attention. Our trading partners believe 
     that by banning the sale of clove cigarettes but not 
     prohibiting the sale of menthol cigarettes, the bill raises 
     questions under U.S. international trade obligations. The 
     government of Indonesia has repeatedly objected to the bill 
     on the ground that this disparate treatment is unjustified 
     and incompatible with WTO trade rules. Accordingly, I would 
     recommend that the Committee further review the relevant 
     language in this light to ensure the bill is consistent with 
     U.S. trade obligations.

  Mr. Speaker, Congress is increasingly--and rightly--calling on our 
United States Trade Representative and the Administration to more 
strenuously enforce the WTO and other trade agreements to ensure that 
our trade partners are playing by the rules and not discriminating 
against our products and services. I think that it is only right that 
we abide by the same standards that we expect of our trade partners 
when the question is as clear as this situation. It would have been my 
hope that the minor changes needed to correct this avoidable trade 
complication in the bill could have be made before the legislation was 
brought to the floor for consideration, but that was not the case. 
Section 907 affects a de facto ban on the importation of clove 
cigarettes from Indonesia. It is another troublesome example of serious 
flaws overlooked by Mr. Waxman in his bill.
                                                    Embassy of the


                                        Republic of Indonesia,

                                    Washington, DC, July 25, 2008.
     Hon. Henry A. Waxman,
     Chairman, Committee on Oversight and Government Reform, 1102 
         Longworth House Office Building, Washington, DC.
       Dear Chairman Waxman: I extend my personal best wishes for 
     your continued service in the United States House of 
     Representatives and particularly as the Chairman of the 
     Committee on Oversight and Government Reform. My government 
     has been communicating with appropriate members of the U.S. 
     Congress and the Executive Branch since 2004 regarding our 
     opposition to a proposed prohibition on the sale of clove 
     cigarettes in the United States. This prohibition has most 
     recently been included as part of H.R. 1108--the ``Family 
     Smoking Prevention and Tobacco Control Act''--which was 
     reported out of the House Energy and Commerce Committee just 
     this month on July 17th.
       In this regard, I am enclosing a letter that the Minister 
     of Trade in Indonesia, Mari Elka Pangestu, gave to U.S. Trade 
     Representative Susan Schwab on this issue when they met at 
     the Asia-Pacific Economic Cooperation (APEC) summit in 
     Sydney, Australia last September. I also want to bring your 
     attention to the recent letter U.S. Department of Health and 
     Human Services Secretary Michael O. Leavitt sent Energy and 
     Commerce Committee Ranking Member Joe Barton in response to 
     the Congressman's inquiries about H.R. 1108.
       Secretary Leavitt raised the following reservation about 
     H.R. 1108 regarding Indonesia's grave trade concerns on the 
     clove cigarette issue:
       There is a further issue regarding the bill that I would 
     like to bring to your attention. Our trading partners believe 
     that by banning the sale of clove cigarettes but not 
     prohibiting the sale of menthol cigarettes, the bill raises 
     questions under U.S. international trade obligations. The 
     government of Indonesia has repeatedly objected to the bill 
     on the ground that this disparate treatment is unjustified 
     and incompatible with WTO trade rules. Accordingly, I would 
     recommend that the Committee further review the relevant 
     language in this light to ensure the bill is consistent with 
     U.S. trade obligations.
       As you may know, the U.S. does not produce traditional 
     clove cigarettes while Indonesia produces over 99% of the 
     clove cigarettes imported into the U.S. This is why Minister 
     Pangestu felt it necessary to personally express to 
     Ambassador Schwab our government's great concern that the 
     proposed prohibition on clove cigarettes in the U.S. would 
     unjustifiably discriminate against Indonesia's cigarette 
     exports to the U.S. in favor of competing, domestically 
     produced U.S. cigarette products under World Trade 
     Organization and other international trading standards.
       We hope the attached letter from Minister Pangestu to 
     Ambassador Schwab will help to more fully inform you as to 
     the international trading standards and rules which serve as 
     the basis for our objections to the proposed prohibition in 
     H.R. 1108. In addition, we hope you will also consider 
     Secretary Leavitt's concerns as a measure of the seriousness 
     with which your own government views the potential trade 
     problems in this regard. We respectfully ask that the bill be 
     modified prior to final passage by the House so that clove 
     and menthol cigarettes are treated equally under the 
     legislation.
           Sincerely yours,
                                       Sudjadnan Parnohadiningrat.
                                                 Minister of Trade


                                 of the Republic of Indonesia,

                                         Jakarta, 28 Agustus 2007.
     H.E. Ambassador Susan C. Schwab,
     U.S. Trade Representative
     Washington, DC.
     Re: The ``Family Smoking Prevention and Tobacco Control Act'' 
     (S. 625).
       Dear Ambassador Schwab: It was a pleasure meeting with you 
     a few months ago in Washington DC, in which I had enjoyed 
     discussing with you about the increasingly strong 
     relationship between our two countries in trade and 
     investment sectors. I would like to take this opportunity to 
     thank you again for the excellent arrangements made during my 
     visit to Washington, DC.
       I am writing to you to raise my Government's concern over 
     an introduction of a draft legislation entitled the ``Family 
     Smoking Prevention and Tobacco Control Act'' (S. 625), which 
     currently is being considered in the U.S. Congress. This 
     draft Act contains a provision, which if enacted as currently 
     drafted, will unjustifiably discriminate against Indonesia's 
     cigarette exports in favor of competing, domestically 
     produced U.S. cigarette products. We understand that Senator 
     Kennedy, who has been supportive of addressing our concerns 
     with appropriate legislative language, has written to you 
     about this matter.
       Specifically, the ``special rule for cigarettes'' in 
     section 907 of the legislation states that, beginning 3 
     months after the date of enactment:
       (a) In General--
       (1) SPECIAL RULE FOR CIGARETTES--A cigarette or any of its 
     component parts (including the tobacco, filter, or paper) 
     shall not contain, as a constituent (including a smoke 
     constituent) or additive, an artificial or natural flavor 
     (other than tobacco or menthol) or an herb or spice, 
     including strawberry, grape, orange, clove, cinnamon, 
     pineapple, vanilla, coconut, licorice, cocoa, chocolate, 
     cherry, or coffee, that is a characterizing flavor of the 
     tobacco product or tobacco smoke.
       The United States does not produce clove cigarettes at all. 
     Indonesia produces cigarettes containing cloves and over 99% 
     of the clove cigarettes imported into the United States come 
     from Indonesia. That entire volume of imports would be 
     prohibited under section 907 of the proposed bill.
       In direct contrast, cigarettes containing menthol sold in 
     the U.S. are almost exclusively produced in the United States 
     as imports of menthol cigarettes are negligible. However, 
     menthol cigarettes are explicitly excluded from the 
     prohibition in section 907.
       The fact that Section 907 would prohibit the importation 
     and sale of clove cigarettes from Indonesia while arbitrarily 
     permitting domestic production and sale of menthol cigarettes 
     reuses serious concerns about the consistency of this 
     proposed provision with the United States' obligation under 
     the agreements of the World Trade Organization. In 
     particular, the WTO Agreement on Technical Barriers to Trade 
     (TBT Agreement) obligates the United States to ensure that, 
     in respect of its technical regulations, products imported 
     from the territory of any WTO Member shall be accorded 
     treatment no less favorable than that accorded to domestic 
     like products and to like products originating in any other 
     country. The Agreement also obligates the United States to 
     ensure that its technical regulations are not more trade-
     restrictive than necessary, thereby creating unnecessary 
     obstacles to international trade. In that regard, the TBT 
     Agreement requires that the United States take account of 
     scientific and technical information, as well as the special 
     development and trade needs of developing country

[[Page E914]]

     Members, such as Indonesia. Similar obligations exist under 
     the WTO Agreement on Sanitary and Phytosanitary Measures (SPS 
     Agreement) and the General Agreement on Tariffs and Trade 
     1994.
       A stated purpose of the standards in the proposed U.S. 
     legislation is to restrict advertising and promotional 
     practices most likely to entice youth into tobacco use, while 
     affording ample opportunity to market tobacco products to 
     adults. Like menthol cigarettes (and unlike other flavored 
     cigarettes), clove cigarettes are not targeted at youth 
     smokers. Clove cigarettes are estimated to account for only 
     0.1% of the total number of cigarettes consumed in the United 
     States and only approximately 0.8% of youth smokers have 
     smoked clove cigarettes and that number of youths is 
     declining based on recent studies. Menthol cigarettes, on the 
     other hand, are estimated to account for approximately 26% of 
     the cigarettes consumed in the United States and 
     approximately 29.7% of youth smokers smoke menthol 
     cigarettes. Moreover, there is no scientifically supportable 
     evidence or risk assessment establishing specific human 
     health risks associated with clove cigarettes that would 
     justify banning those cigarettes while continuing to permit 
     the sale of menthol cigarettes.
       These facts are compelling. Imports of Indonesia's clove 
     cigarettes are prohibited for no reason other than they 
     contain a natural herbal additive, while U.S. cigarettes 
     containing menthol--a processed herbal additive--are 
     explicitly exempted from the prohibition. The Government of 
     Indonesia firmly believes that such discriminatory treatment 
     is inconsistent with the United States international 
     obligations and, if enacted, will have a significant adverse 
     effect on Indonesian trade.
       The Government of Indonesia therefore respectfully asks 
     that you carefully consider our concerns and, in the interest 
     or our positive trade relationship, ensure that both the 
     spirit and the requirements of the WTO agreements are 
     observed, Further, absent elimination of the prohibition on 
     imports of clove cigarettes, pursuant to Article 2.5 of the 
     TBT Agreement and Article 5.8 of the SPS Agreement, we ask 
     the United States to explain how that prohibition is 
     justified
       As you are aware, Indonesia has expressed concern over the 
     Bill at previous meetings of the Indonesia-U.S. Trade and 
     Investment Council.
       We trust that your government would understand the 
     difficulties we are faced with, as well as the severity and 
     the urgency of this matter to our people whose livelihood 
     very much depends on the existence of the cigarettes 
     industry. We would be very appreciative of your attention to 
     this matter and would welcome the opportunity to discuss it 
     further with you, at your convenience.
       We look forward to an opportunity in building and 
     strengthening the robust relationship between our two 
     countries. Thank you.
           Your sincerely,
     Mari Elka Pangestu.

                          ____________________