¶ … Habit to Break," Newsweek's Brook Lamar discusses the growing illegal trade in cigarettes originating from China and extending to other parts of Southeast Asia. This trade has two components. First, genuine foreign cigarettes from tobacco giants like Marlboro, Philip Morris and Salem are smuggled into the country. Second, China also has a flourishing counterfeit cigarette industry. Fake cigarettes, complete with official-looking government import seals and a "Made in America" label are then sold in the black markets in Singapore, Shanghai, the Philippines and even Australia.
This article illustrates a type of economic globalization. The sales of cigarettes and other tobacco products have dwindled significantly in the United States due to health campaigns. To make up for the loss of its North American market, tobacco companies have turned to China and by extension,...
Tobacco companies have previously tolerated the trade in counterfeit cigarettes, believing that these fake cigarettes increased brand recognition in the country. Today, however, the same companies are concerned that the black market trade in cigarettes is eroding one of the last few markets that are still hospitable to tobacco products.
The article also uses the tobacco trade to illustrate the limitations of economic globalization organizations such as the World Trade Organization (WTO), which was supposed to open countries such as China to foreign investment. However, the WTO does not take into consideration how China is divided into fiefdoms, giving rise to a fragmentation that is incompatible with the WTO provisions. The system of local protectionism is thus not ready to absorb outside brands and limits the development of any national industries, including…
