The Australian Tobacco Plain packaging has got a reprieve from local Australian courts against a challenge from tobacco companies. The decision has been widely debated and dissected in the IELP blog here on issues related to intellectual property, investment claims as well as violations of international trade rules. Benn MCGrady has raised some important issues here. I have blogged about this issue here, here and here.
The WTO has seen countries like Ukraine and Honduras challenge the tobacco plain packaging legislation. The outcome of this international trade dispute will be eagerly awaited by both anti-tobacco public health activists as well as the multinational tobacco industry.In the meantime, the possibility of the spread of plain packaging to other countries is widely being seen as a distinct possibility.
New Zealand has recently brought out a "consultation paper" as a prelude to a possible plain packaging legislation. It essentially lays down the rationale for the proposal and seeks comments on the proposal. The closing date for submissions is October 5th 2012. The paper is found here.
The consultation document is in seven parts. Part 7 poses a number of consultation questions designed to elicit responses to the key issues and fill any information gaps. I found several of the questions interesting in terms of their relation to international trade. Some of them are reproduced below:
" 7.2 Specific questions relating to impacts on manufacturers, exporters, importers and retailers of tobacco products
What are the likely impacts that plain packaging would have for manufacturers,
exporters, importers or retailers of tobacco products?
What would be the impact of plain packaging on the market mix and retail price
of tobacco products?
What would be the additional costs of manufacturing tobacco packaging,
including redesigning packs and retooling printing processes, if plain packaging
of tobacco products were introduced?
Would the ongoing cost of manufacturing cigarette packs be lower or higher if
plain packaging of tobacco products were introduced compared with the current
cost of manufacturing packs, and by how much?
How often do manufacturers amend the design of tobacco packaging for brands
on the New Zealand market, and what are the costs of doing so?
Would the ongoing costs of brand marketing increase or decrease over time
under plain packaging?
To what extent is the design, manufacture and printing of packaging of tobacco
products sold in New Zealand undertaken in New Zealand, including work
outsourced to external specialist design, packaging and printing firms?
Would plain packaging of tobacco products result in a discontinuation of
importation of tobacco products with small markets, and if so, what financial loss
would be incurred by importers of those products?
Would it take longer for tobacco retailers to serve customers, and if so, why and
by how much would this occur?
Would retailers face any other costs or benefits if plain packaging of tobacco
products were introduced?"
New Zealand has embarked on a detailed consultative process prior to taking a decision on plain packaging. The consultation process is also a way of eliciting domestic opinion on the measure. An interesting issue is whether public opinion, consultative processes and scientific studies are relevant in WTO dispute proceedings.While scientific evidence is relevant in justifying the "reasonableness" of a measure, domestic opinion need not always assist in justifying an action. It could still be incompatible with international trade law. One would have to wait and see where the New Zealand measure culminates. Another issue is whether there is a middle path at all in this dispute? Is Plain packaging the most suitable way to go forward in dealings with the health hazards of smoking? is tobacco trade, investment and employment in the tobacco industry irrelevant considerations as compared to the health impact of smoking? Is the balance to be decided nationally or internationally? Can there be culturally, and hence nationally, different stands on this issue - one more health conscious while the other less? Is there an internationally universal standard in this regard?