Saturday, July 28, 2012

Is the Australian Plain Packaging legislation violating national treatment?

The Dominican Republic was the latest complainant to the Tobacco Plain Packaging dispute at the WTO against Australia. I had blogged about it here. The request for consultations of the Dominican Republic touched on aspects of alleged violations of the TRIPS, TBT and GATT Agreements. 

The gist of the request for consultation is found here:
"These measures regulating the plain packaging and appearance of tobacco products for retail sale appear to be inconsistent with Australia's obligations under the following provisions of the TRIPS Agreement, the TBT Agreement and the GATT 1994: 
 Article 2.1 of the  TRIPS Agreement, which incorporates the provisions of the  Paris Convention for the Protection of Industrial Property, as amended by the Stockholm Act of 1967 ("Paris Convention"), in particular, (i) Article 6quinquies of the  Paris Convention,because trademarks registered in a country of origin outside Australia are not protected  "as is"; and, (ii) Article 10bisof the  Paris Convention, because Australia does not provide effective protection against unfair competition, for example, creating confusion between the goods of competitors;
 Article 3.1 of the TRIPS Agreement, because Australia accords to nationals of other Members 
treatment less favourable than it accords to its own nationals with respect to the protection of 
intellectual property;
 Article 15.4 of the TRIPS Agreement, because the nature of the goods to which a trademark is 
to be applied forms an obstacle to the registration of the trademark;
Article 16.1 of the  TRIPS  Agreement, because the measures prevent owners of registered 
trademarks from enjoying the rights conferred by a trademark;
 Article 20 of the  TRIPS Agreement, because the use of trademarks in relation to tobacco products is unjustifiably encumbered by special requirements, such as (i) use in a special form,for example, the uniform typeface, font, size, colour, and placement of the brand name, and, (ii) use in a manner detrimental to the trademark's capability to distinguish tobacco products of one undertaking from tobacco products of other undertakings;   
 Article 22.2(b) of the  TRIPS Agreement, because Australia does not provide effective protection against acts of unfair competition with respect to geographical indications, for example, creating confusion  among consumers with respect to the origin of goods;
 Article 24.3 of the TRIPS Agreement, because Australia is diminishing the level of protection it affords to geographical indications as compared with the level of protection that existed prior to 1 January 1995;  
 Article 2.1 of the  TBT Agreement, because the technical regulations at issue accord to imported tobacco products treatment less favourable than accorded like products of national origin; 
 Article 2.2 of the  TBT Agreement, because the technical  regulations at issue create unnecessary obstacles to trade because they are more trade-restrictive than necessary to fulfill a legitimate objective; and, 
 Article III:4 of the GATT 1994, because the measures at issue accord to imported tobacco products treatment less favourable than accorded like products of national origin."
While the TRIPS and TBT violations require analysis, the Article III:4 GATT violation surprised me. The Plain Packaging Legislation is equally applicable to imported as well as domestically made products. Thus, locally made Australian cigarettes too must follow the same conditions. There is no de jure discrimination on this account. As far as defacto discrimination is concerned, does the imposition of plain packaging requirements on imported tobacco products have an impact on the competitive conditions in favour of local products? Does it accord less favourable treatment to imported products or are local products advantaged? To me, both imported and local products are treated in the same manner. It seems that the national treatment violation contention is not on very strong grounds. Am I missing something here? The rest of the contentions is set for a whole lot of jurisprudential interpretation by the Panel and Appellate Body. 

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