Wednesday, September 5, 2012

Plain Packaging of Tobacco - Domestic Policy, regulation and protectionism

The issue of plain packaging of tobacco products in Australia, now being adopted in New Zealand, has dominated the international economic and political law blogosphere for sometime now. With the local challenge to the Plain Packaging legislation in Australia failing, all eyes are on the WTO dispute that Ukraine and Honduras are spearheading, albeit with some help from Tobacco companies. 

Several issues of intellectual property protection, investment claims and the more traditional right to trade tobacco products are pitted against public health concerns and the right of a country to domestically decide its public health policy. The WTO decision will have implications not only for tobacco trade but also for the jurisprudence relating to the extent of domestic policy space for implementing public health legislation within the WTO framework.What re the limits countries far when implementing legislation purporting to protect public health? Is national will sufficient? SHould it be backed up by strong evidence? Is trade subject to public health concerns? The applicability of Article XX general exceptions of the GATT to non-GATT Agreements like the TRIPS too would be an issue.

Simon Lester in this Cato piece simplifies the ongoing dispute and succinctly explains the contours of the questions involved. In another piece titled "Free Trade and Tobacco:Thank You for Not Smoking (Foreign) Cigarettes" tracing the history of anti-tobacco legislation in the U.S., he explains the contours of the dispute well.
"Let's turn now to the argument, made by many critics of the current system, that existing trade rules that go beyond protectionism undermine national sovereignty, including the ability to regulate, and thus intrude into domestic health regulation. As the plain packaging cases discussed above indicate, there is an argument that they do (or at least that they may, as the cases have not been decided yet). Where trade and investment rules limit government actions that are not protectionist, they lead to criticism of the existing rules in a way that sometimes distracts from the core purpose of trade agreements. There may be good reasons for some of these rules, but nevertheless they do interfere with domestic policymaking, and this is a legitimate source of debate about the proper scope of trade agreements."
Important questions of trade, domestic policy space, public health concerns as well as protectionism will probably be addressed by a WTO ruling in the Plain Packaging case. Whether the trend of plain packaging will spread around the world will depend on how the multilateral dispute settlement system decides. The decision will rest on the contours of domestic policy space, regulation, free trade and protectionism. Is there a special case to either "regulate" or "protect" tobacco?

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