Impact of Trade Liberalization on Tobacco Consumption
The trade in tobacco and its products has significantly expanded over the past two decades due to the various regional, bilateral and international trade agreements between nations. The main aim of these agreements has been to cut down trade barriers that have hindered the sale of tobacco and its products. With such freedom, there is no doubt that tobacco consumption has also significantly increased across the world since the product can now easily penetrate into several international markets.
As a result of the increased trade liberalization in a variety of goods and services, there has been a reduction in high tariff and even non-tariff barriers to the tobacco trade globally. This has further promoted the consumption of tobacco in a number of low and middle income nations across the world. Based on the intensive implementation of policies for the liberalization of trade, there has been an increase in the competition in tobacco markets that are available locally. Just like it is seen with other products, high competition often leads to lower prices of commodities. This is the same experience that tobacco has also had.
Another thing that should be noted about the relationship of trade liberalization and tobacco is that the intensive competition in the markets has created the push for a dramatic increase in advertisement of tobacco products. Due to the increase in promotion of tobacco and its products, many people have been lured to it, thus, increased consumption.
In the past, before trade was liberalized, there were several restrictive policies that hindered the production of tobacco. As a result of this, most of the tobacco that was produced only ended up in domestic markets where the prices were quite low. In this kind of a scenario, many tobacco farmers started to view it as non profitable and even opted for other agricultural options. The impact of this is that tobacco consumption was quite low. However, this took a sudden twist when international markets for tobacco and tobacco products were opened. Many farmers and countries began viewing it as a potentially profitable venture and increased their productions and supply to the world markets.
Due to the boom in tobacco trade, many countries began venturing in large scale production such that it has today become one of their foreign exchange earners. Countries like Zimbabwe have tobacco as one of their major exports due to the favorable policies on the sale of the product in world markets. As the production of tobacco increases, the supply is equally heightened, thus consumption is also taken a notch higher.
In the recent years, there have been several trade agreements undermining the efforts by various nations to reduce the use of tobacco due to its negative health impacts. In fact, there is even no clear indication that there will be trade policies formed to curtail the production and sale of tobacco and its products. This is a clear indication that consumption of tobacco is still going to soar to greater levels despite the concerns that have been raised on its impacts.
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