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Open Access 01-12-2017 | Research

Disentangling regional trade agreements, trade flows and tobacco affordability in sub-Saharan Africa

Authors: Adriana Appau, Jeffrey Drope, Ronald Labonté, Michal Stoklosa, Raphael Lencucha

Published in: Globalization and Health | Issue 1/2017

Abstract

Background

In 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.

Methods

We 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.

Results

Preferential 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.

Conclusions

These 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.

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MFN refers to the treatment of all trade partners equally by providing trading partners with non-discriminatory terms of trade.

Harmonized System Codes 24, 2401 and 2402 was used to compile tobacco trade data.

In a separate analysis, we control for the effect of ratification of the FCTC and implementation of the FCTC overtime but do not find a significant effect of these two variables on cigarette prices as anticipated. The results are not presented in this paper.

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Title: Disentangling regional trade agreements, trade flows and tobacco affordability in sub-Saharan Africa
Authors: Adriana Appau
Jeffrey Drope
Ronald Labonté
Michal Stoklosa
Raphael Lencucha
Publication date: 01-12-2017
Publisher: BioMed Central
Published in: Globalization and Health / Issue 1/2017
Electronic ISSN: 1744-8603
DOI: https://doi.org/10.1186/s12992-017-0305-x

At a glance: The ONWARDS insulin icodec trials

Springer Medicine

Disentangling regional trade agreements, trade flows and tobacco affordability in sub-Saharan Africa

Abstract

Background

Methods

Results

Conclusions

At a glance: The ONWARDS insulin icodec trials

Springer Medicine

Abstract

Background

Methods

Results

Conclusions

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