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PPI | Trade Fact of the Week | July 16, 2003
Value of Narcotics Imports to the United States: Unknown


Editor's Notes: The PPI "Trade Fact of the Week" is a weekly email newsletter published by PPI's Trade & Global Markets Project. To sign up for a free subscription, click here. (Just make sure to check the box next to "Trade & Global Markets.")

Original links are included though some may have expired.


The Numbers:

Estimated cocaine imports to United States: 260 tons
Estimated heroin imports to United States: 13 tons
Value of narcotics imports: unknown

What They Mean:

Naturally produced narcotics grow around the world, mainly in poor and remote areas. Mountainous regions in the Andean countries are the sole source of cocaine; opiates are more widespread, growing in upland Southeast Asia, Afghanistan, and Latin America. (About 210,000 hectares, or 800 square miles, worldwide are devoted to coca production, and 247,000 or 1,000 square miles to opium.) Marijuana grows readily in temperate as well as tropical climates; lab-produced drugs such as methamphetamine, of course, can be produced anywhere.

In the year 2000, according to the Office of National Drug Control Policy, Americans spent about $64 billion buying illegal narcotics -- about as much as we spent on furniture or toys, and a bit more than the $49 billion that went to gasoline. Most of the spending ($35 billion, to be precise) was on cocaine; $10.5 billion went to marijuana purchases, $10 billion to heroin, $5.4 billion to methamphetamines, and $2.4 billion to various hallucinogens, depressants, and other drugs. The totals reflect generally downward trends in drug use over the 1990s; cocaine use in particular is down sharply. Between 1989-1992, consumption of cocaine averaged 400-500 tons, or $50-$80 billion per year; by the end of the 1990s, the figures were 260 tons and $35 billion.

Government agencies offer no estimates for the import value of drugs. Comparisons with mainstream consumer goods, though, may provide a shaky analogy. For example, Americans spent $67 billion on toys and sporting goods in stores last year, up from $17 billion spent by importers on the goods at the border. The 'markup' for narcotics is probably much higher than for typical consumer products, of course, given that drug traffickers risk jail sentences and death at the hands of rival drug dealers. An unscientific, and possibly high, estimate might place the import value of narcotics at $5-$10 billion -- comparable to the figures spent to import sweaters, aluminum, or fresh fruit and vegetables. Meanwhile, research on exports of narcotics from the United States to other countries is almost nonexistent. To the extent there are any educated guesses, they view exports as probably minimal -- most narcotics produced here (principally marijuana and lab-produced drugs) also seem to be consumed here.

Further Reading:

The Office of National Drug Control Policy reports on trends in narcotics consumption, irritatingly misspelling "Colombia" as "Columbia" four times on pages 46-48 of the cocaine chapter:
www.whitehousedrugpolicy.gov/publications/
drugfact/drug_avail/index.html

The Drug Enforcement Administration testifies on disruption of drug cultivation and trading overseas:
www.usdoj.gov/dea/pubs/cngrtest/ct070903.htm

The United Nations' annual review of global narcotics trade:
www.unodc.org/pdf/report_2003-06-26_1.pdf

The Andean Trade Preference Act is intended, in part, to give rural districts in Bolivia, Colombia, Ecuador and Peru alternatives to coca production. U.S. government website for the ATPA:
www.ustr.gov/regions/whemisphere/atpa.shtml;
and the Andean Community website:
www.comunidadandina.org/endex.htm

Americans spend about $7 trillion a year. Here's how we spend it:
www.bea.gov/bea/dn/nipaweb/TableViewFixed.asp?
SelectedTable=30&FirstYear=1999&LastYear=2000&Freq=Qtr






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