Tobacco Plain Packaging - A classic WTO dispute?

I had blogged yesterday about UK's moves to introduce plain packaging. Parallelly, the TRIPS Council at the WTO was the venue for the continued challenge to the proposed plain packaging measures of New Zealand with the Dominican Republic and Honduras maintaining that employment opportunities and TRIPS obligations must be the main consideration on deciding the fate of plain packaging measures.

ICTSD summarised the proceedings thus:

"Members at the TRIPS Council meeting also addressed a proposed New Zealand law that, if implemented, would require plain packaging for tobacco products. (See Bridges Weekly, 27 February 2013) The controversial legislation would require standardised packaging without trademarks, a drab monotone design, and prominent health warnings on cigarette packaging, with only a small line of text to distinguish one brand from another. 

At this week’s meeting, the Dominican Republic - whose main export is tobacco - took the lead in commenting on the draft legislation, saying that it would hinder employment and would force producers to compete based on price instead of quality.  

...

In response, New Zealand said it would continue developing the planned legislation - which is currently in the drafting stage - but may wait to see the outcome of the dispute before implementing it, echoing recent comments made by the country’s prime minister, John Key. It also recalled that the 2001 Doha Declaration says that TRIPS does not and should not prevent members from taking measures supportive of public health. 

The plain packaging regime is a part of “a long policy development process,” New Zealand added, noting that smoking is its single largest cause of preventable death."

Public health objectives, domestic policy space, long term development process vis a vis employment opportunities, growth of less develop countries and intellectual property law obligations. The stage is set for a classic WTO dispute!

Is Australia's Plain Packaging discriminatory in favour of local products?

The Tobacco Plain Packaging dispute is gradually progressing at the WTO. Honduras, one of the complainants against Australia, filed its complaint at the WTO which is available here. I have earlier blogged about the issue here, here, here and here. Apart from the main challenge on the grounds that plain packaging legislation is inconsistent with Australia's commitments under the TRIPS Agreement I found the points in relation to discrimination between local products and foreign products a bit untenable:

"  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 2.1 of the TBT Agreement and Article III:4 of the GATT 1994, because the measures at issue result in treatment less favourable of imported products than of like products of national origin."

I found these two leal claims rather strange since the plain packaging applies equally to tobacco products manufactured in Australia and imported into Australia. Further, it is difficult to imagine de facto discrimination in this case. Am I missing something here?

Australia's Tobacco Plain Packaging row - Whose interests really?

The International Business Times had an interesting piece on Australia's position on the Tobacco Plain Packaging row. I have blogged about it here, here, here and here.

"The Australian government vowed to repeal efforts by giant tobacco firms to frustrate its aim of further limiting the flow of cigarette products in the country.

These efforts, according to Health Secretary Jane Halton, include the deployment of lawyers by tobacco companies to give out legal assistance to Honduras and Ukraine, two countries that had apparently launched legal challenges on Australia's soon-to-be implemented cigarette plain packaging law."

Two interesting issues come out in this position:

1. Subsidisation: It is apparent that interests of large Tobacco Companies are at stake here and their business interests have propelled the disputes at the WTO. Is it alright for national teams to comprise of lawyers from these tobacco companies? Is this an example of multiple interests being accommodated in the national position - Government lawyers, trade specialists, industry lawyers and lawyers of companies directly affected by the measure. Ukraine and Honduras seem to have adopted this approach. Who foots the bill for this dispute? Would it be legitimate for Ukraine and Honduras to take assistance from the Tobacco companies in this regard?

2. Trade interests: Ukraine and Honduras do not have extensive trade relations with Australia. Why did they initiate the dispute then? Are tobacco exports from these two countries substantial to justify this action? As per the Observatory of Economic Complexity, Ukraine exports 1.1% of world cigarette exports. While Australia imports substantially from China (20%), Ukraine does not figure in the list of countries engaged in exporting to Australia.

This brings us to the question - What motivated Ukraine to file a WTO complaint against Australia which it does not significantly export to? Was it prospects of a future market? Was it about taking  a stand against plain packaging which may affect it"s trade interests if larger trading partners adopted the same measure? Or were "national" interests and "business" interests of large tobacco companies coalescing? Should private parties be allowed directly to initiate disputes at the WTO at their own cost? Though this is not permitted by the present legal framework, would it in effect obliterate the need for seeking "national" interests to pursue purely business interests? What is at stake for the people of Ukraine and Honduras in this dispute?