Australia's plain packaging tobacco law and WTO - A weak case?

In my  earlier blog piece on the Tobacco packaging case in Australia the issue of whether the measure is violative of Austraia's obligations under the WTO was raised. 

Tania Voon and Andrew Mitchell in this article titled "Face Off: Assessing WTO Challenges to Australia's Scheme for Plain Tobacco Packaging" address squarely the above issue and  have concluded that "that the high likelihood of a WTO dispute settlement challenge to Australia‘s plain packaging scheme is offset by its low likelihood of success." They have categorically analysed the provisions of the GATT Agreement, TBT Agreement, SPS Agreement and TRIPs Agreement and have concluded,

" Although tobacco companies may have arguable points to make on certain limited issues, Australia has a robust position in maintaining that its plain packaging scheme is fully compatible with all of its WTO obligations, when the relevant provisions are properly interpreted taking into account public health concerns. In particular, the scheme does not breach: Art XI:1, Art III:4 or Art I:1 of the GATT 1994 because the scheme is both de jure and de facto non-discriminatory, with a limited impact on international trade and a sound public health basis, as borne out by the WHO FCTC and its agreed implementing guidelines; Art 2.1 of the TBT Agreement because the scheme is non-discriminatory; Art 2.2 of the TBT Agreement because of its limited impact on trade and its contribution to the legitimate objective of protecting public health; TRIPS Art 2.1 (incorporating Paris Convention Arts 6quinquies(B) and 7) or TRIPS Art 15.4 because those provisions concern trademark registration, whereas plain packaging affects trademark use; TRIPS Art 17 because the scheme does not affect the rights conferred by trademarks, which – as indicated in TRIPS Art 16 – are negative rights to prevent use by others rather than positive rights to use trademarks; or TRIPS Art 20 because, even if the scheme encumbers trademarks with special requirements, that encumbrance is justifiable and indeed justified by relevant evidence including the public health objectives of the Australian government."

The authors do not visualise the matter coming up before the WTO due to the inherent weakness in the merits of the challenge. Nevertheless, if it reaches the doorstep of the DSM, it would give an opportunity to the panel and Appellate Body to "interpret" Article 2.2 of the TBT to establish what constitutes an "unnecessary obstacle to trade" int he context of the TBT Agreement.

Another interesting fact brought out in the article is the positions taken by different member countries at the WTO  to the measure:

"On 7 June 2011, at the meeting of the WTO Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS Council), the Dominican Republic objected to Australia‘s plain packaging scheme on the basis that the scheme would be inconsistent with Australia‘s obligations under the TRIPS Agreement. Supporting the Dominican Republic‘s stance were other WTO members: Honduras, Nicaragua, Ukraine, the Philippines, Zambia, Mexico, Cuba and Ecuador. In contrast, New Zealand, Uruguay and Norway supported Australia‘s draft law, while India referred to studies showing the effectiveness of plain packaging in reducing smoking. India, Brazil and Cuba all emphasised the right of members to implement public health policies, as noted in the Doha Declaration on TRIPS and Public Health. The WHO also made a statement in its role as an observer in the TRIPS Council."

Positions necessitated by "domestic trade interests" would be the obvious conclusion. Those supporting are probably tobacco exporting countries. India, Brazil and Cuba (though a major tobacco manufacturer and exporter) have emphasised the supremacy of the domestic policy space in protecting public health. Whether this space is legitimate in the context of WTO obligations, only a WTO dispute can tell!