If you happen to Google search “plain packaging dispute world trade organization”, the first thing that hits you is that Australia is going to see some tough trading times. Five nations- Ukraine, Honduras, Dominican Republic, Cuba and Indonesia, have decided to challenge Australia’s “plain packaging” laws. In force since December 2012, these regulations mandated that all tobacco products are to be sold in drab green boxes resembling a military or prison issue, while using one particular type of package design. The rules further obligated the tobacco manufacturing companies to include graphic images of diseased smokers, while the brands and brand-names would be printed in small standardized fonts.
It was only natural then, for Indonesia to have joined the four countries preceding it, as it exports more than $US670 million worth of tobacco a year. Don’t forget the nation’s effort to protect its Clove cigarettes industry. (The latest chapter of the story can be found here.)
The Australian Government, as the first WTO member to introduce such stringent anti-smoking regulations, has put up a summary of its countries involvement in the disputes here. As a Reuters’ report indicates, opponents of the law, who say it is heavy-handed and an invitation to counterfeiters, had hoped other countries would hold off from following Australia’s example pending a WTO verdict, but Britain, Ireland and New Zealand have already begun drafting similar legislation. But public health advocates fear the such a legal attacks might still deter other countries from passing strong anti-smoking measures. It is probable that the cost of defending this case, and the risk of being held liable, would intimidate all but the most wealthy, sophisticated countries into inaction.
On 5 May 2014, after a long closed-door meeting,the Director-General of the WTO Roberto Azevedo appointed panellists Mr Alexander Erwin (Chairperson), Mr François Dessemontet and Ms Billie Miller to examine the complaints made against Australia’s laws and the division will soon set up a timetable for the resolution of the same.
Fun fact: Ukraine, by the way, hasn’t exported a single cigarette to Australia since 2005. As it doesn’t really have any direct economic interest at hand, it would be interesting to see the nation establish its locus in the case. The matter seems even more bewildering when you consider that just hours before contesting the anti-smoking law in Australia, Ukraine had passed a bill to outlaw tobacco advertising and promotion. These had been seen to be revolutionary steps in the chain-smoking Eastern European country and the decision to take Australia to the DSB, for supposedly doing the same thing, has everyone stumped.
It would be of no surprise to know that there are reports that suggest Philip Morris and British American Tobacco are providing support to the DR, Ukraine and Honduras. On the other hand, Australia is getting its back patted by the WTO and anti-smokers campaigners around the globe who appreciate the nation’s vanguard role in the fight against tobacco use, which has been reported as the leading cause of preventable death. Health advocates stress countries should be free to decide how best to protect public health, without being second-guessed by unelected trade panels. Moreover, they argue, tobacco products, which kill when used as intended, should not be afforded the trade protections of other goods and services.
But here’s the catch: Honduras, Cuba and the Dominican Republic say the legislation harms their traditional cigar brands, thereby hurting farmers and hundreds of thousands of cigar-sector employees in the three relatively poor countries. In light of this, trade experts maintain that the dispute has the potential to open a Pandora’s box of other cases and could result in the re-writing of the script for the public health debate.
Also, the Ukraine and Honduras challenges each have 37 third parties. If you think about it, that’s a lot of nations having a common economic interest.
In essence, the complainants argue that the laws are discriminatory, “more trade restrictive than necessary” and are unjustifiable since they infringe upon the right of WTO members to issue trademarks. Refuting these claims, Australia seeks to take a more moral approach to the issue, arguing that the legislature is sound, well-considered and designed to achieve a specific and legitimate objective i.e. the protection of public health.
An interesting thing to note here is that this was Indonesia’s first request for consultation; a request they could have denied. This would have forced the complainant to lodge a second, unblockable request. This significant, albeit implied move shows that a battle-ready Canerra wants to get done with the matter as fast as possible. A macroscopic view of the matter brings to light the fact that the WTO has, once again, been provided with an opportunity to decide how to square off trade rules with intense public health issues. The “trade vs. health” debate is hardly settled and if not a final verdict, the resolution of the current case (don’t forget the appeals) could very well lead to a new direction in the understanding of the trade related impacts on global health.
Putting things into perspective, Fredrik Erixon, director of the European centre for International Political Economy clarifies that “What we’re talking about here is the extent to which a government actually can deny a company the right to communicate its own trademark, to distinguish its own goods from other goods”.
I’ll take up a legal analysis of the request for consultations, submitted by the five nations soon.