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U.S. Trade Policy and Cigarette Smoking in Asia ABSTRACT During the 1980's and
early 1990's, the cigarette markets in Japan, Taiwan, South Korea, and
Thailand were opened to U.S. cigarettes through actions taken under Section
301 of the 1974 Trade Act and its subsequent amendments. Using pooled
annual time-series data from ten Asian countries, the impact of the Section
301 agreements on the market share of U.S. cigarettes and on per capita
cigarette consumption is examined. Estimates from fixed effects models
indicate that the market share of U.S. cigarettes in Japan, Taiwan, South
Korea, and Thailand increased dramatically after the agreements as consumers
switched from the brands produced by domestic monopolies to the brands
of U.S. cigarette producers. In addition, simulations based on the regression
results indicate that per capita cigarette consumption in 1991 in the
four affected countries was nearly ten percent higher than it would have
been had the markets remained closed to U.S. cigarettes.
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