GENEVA -- Last week, the World Health Organization (WHO) announced that diplomats from more than 170 countries were hard at work drafting a treaty to deal with the growing trade of tobacco smuggling.
"A good part of the protocol is already agreed," WHO's Dr. Haik Nikogosian told reporters in Geneva last week.
One crucial aspect of the treaty would be a tracking system for all cigarette packages which would allow customs officials to track the country of origin. Issues the negotiators still have to figure out include duty free and internet sales, supply chain tracking and the extradition of accused smugglers.
While the United States is one of a handful of countries not taking part in these negotiations (meaning the treaty would not apply here unless the US joins discussions later on), with illegal tobacco trade costing governments up to $50 billion in tax revenue per year, it's clear why so many nations are eager for a crack-down.
But will such a treaty (especially one not enforced by all members of WHO) really cut down on illegal trade?
"Smuggling is clearly a problem--I'm glad they're looking at it and trying to do something," said Paul Marquardt, vice president of marketing for one of the largest tobacco manufacturers in North America, Prime Time International. "But it's only going to be effective to a point, because of the tax value these governments have decided to put on tobacco."
With Prime Time products selling in both Canada and the United States, Marquardt has the unique perspective of manufacturing to a country that will and a country that won't be taking part in the smuggling treaty. Ultimately, he's not certain it will make a difference either way--with the taxes on tobacco steadily growing in both countries, Marquardt believes illegal trade will continue to thrive, regardless of tracking systems or extradition threats.
"You put a rule or regulation to try and stop smugglers and they come up with three new ways to get around it," Marquardt said. "No amount of world, country or state regulation is going to stop it. Every time they pass a tax increase, they're just adding to the incentive--that's the bottom line."
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.