And now it is Indonesia

I have blogged about the Plain packaging of Tobacco products dispute here, here and here. 

And now Indonesia joins the battle over Tobacco Plain Packaging.  More details here.

Plain Packaging - Some debates

Interesting to read about two experts well known to WTO law enthusiasts - Joost Pauwelyn and Benn McGrady - argue, albeit in an academic setting, on the tobacco plain packaging case that has made its way to the doorsteps of the WTO dispute settlement process. While whether the measure of Australia's plain packaging is overtly restrictive on trade and violative of obligations under the TRIPS Agreement will be known only when the Panel decides the case, this case has nevertheless evinced a lot of interest in trade law circles for a variety of reasons as I have blogged here, here and here about it.

The latest news about UK dropping plans to introduce Plain Packaging adds to the series of measures (and non-measures) by governments in this particular setting. 

The Tobacco Plain Packaging case raises fundamental issues of restriction on trade, public health objectives versus international trade, intellectual property rights and permissible restrictions on them, domestic policy space to decide on policy objectives, determinants of justifiable policy objectives, employment versus health objectives and many more.

I agree with Simon, the mock trial should have a webcast (video link) for all those aficionados! 

Developing countries, livelihood and public health

I have blogged about the plain packaging dispute here, here and here. Amongst the many issues arising in the dispute, the one that is linked to the developing country development policy space debate is the impact it has on employment and livelihoods of those in the developing world that are dependent on tobacco production.Cuba's recent entry into the dispute has made this issue come to the forefront again.

Tania Voon and Andrew Mitchell do not agree with the stand that it is in developing countries interest. They have a summary of their arguments here.

The Trade, Investment and Health blog picked this up and has reiterated the position that it is actually not in the interests of the poor of the developing world.

Some observations:

1. How strong or legally tenable is the developing country employment and livelihood stand in a WTO dispute? Is there jurisprudence to support it? Or is it just a ideological argument not supported by specific GATT/TRIPS rules?

2. Who decides what is in the interests of the citizens of a country impacted by such a measure? Is it an objective analysis? Or is national policy will in determining that livelihoods are impacted the best judge? Or is it an international arbiter like a WTO panel?

Just these two questions for now.

Cuba joins the battle

Cuba is the latest entrant to the Tobacco Plain Packaging dispute with reports that it has sought consultations with Australia on the measure trickling in. Cuba had already reserved third party rights in a WTO dispute that was initiated by Ukraine against Australia. I have blogged about this here, here and here. NYT covered this news recently here.

Interesting facts about the Cuban challenge:

1. It is Cuba's first WTO dispute settlement case - either as a complainant or a respondent

2. Cuba, a developing economy, is challenging a developed economy (Australia) on the grounds that it's intellectual property rights have been allegedly infringed - the use of TRIPS by a developing country against a developed economy (The allegation is that it is normally the other way round)

3. With the Dominican Republic and Cuba joining the challenge, it seems to be a Caribbean battle against plain packaging of tobacco.

While on the one side pubic policy imperatives of public health drive the legislative moves of tobacco plain packaging, impact on local employment in developing economies and its impact on trade and jobs is forcing a legal challenge at the international forum. 

Just another example to show that trade measures are not just about trade - it has a far reaching impact on employment and growth.

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!

After Australia and New Zealand, UK proposes to introduce tobacco plain packaging

After Australia and New Zealand, reports that tobacco plain packaging would be implemented in U.K is doing the rounds bringing stocks of major tobacco companies down. The Guardian reported the move recently here. The plain packaging may come into effect later this year in the U.K.

"Ministers are to introduce plain packaging for cigarettes along the Australian model with legislation this year, after becoming convinced that the branding is a key factor in why young people start to smoke. 

The legislation, to be announced in the Queen's speech in May, is also expected to ban smoking in cars carrying anyone aged under 16 years. Ministers acknowledge that the ban is likely to be difficult for the police to enforce, but they believe peer group pressure will have an impact similar to the ban on drivers using mobile phones."

Will the plain packaging moves spread to other countries? How will major tobacco companies react? How will countries that rely on tobacco manufacturing for employment generation and national growth react? How will the panels established at the WTO decide on concerns of public health objectives in the context of intellectual property rights and trade?

 

Domestic policy space, Tobacco Plain Packaging and New Zealand

Plain Packaging of Tobacco products has been one of the latest issues that has knocked on the doors of the WTO pursuant to Australia's legislation to introduce plain packaging. I have blogged about it here, here and here and there is considerable discussion in the international economic law blogosphere about it. Dominican Republic, Honduras and Ukraine have challenged the Australian measure contending that it violates Australia's obligations under the TRIPS Agreement. I had also blogged about New Zealand's moves to enact a Plain Packaging legislation here. The issue raises, amongst other things, the interplay of domestic policy choices, international obligations and interpretation of international treaty provisions. Intellectual Property Watch has a detailed analysis of the various positions on the issue here.

The ICTSD had this piece recently on New Zealand's moves.What I found interesting in this piece is the stand by New Zealand authorities that they would await the decision int eh Australian case at the WTO and then go ahead with the proposed implementation in New Zealand.

"Wellington plans to formally introduce legislation requiring plain packaging for tobacco products this year, officials said last week. Should the planned initiative indeed become law, New Zealand would be the second country to implement such a measure after Australia - whose own policy has been the source of significant controversy. 

However, New Zealand Prime Minister John Key has indicated that his government will not implement the plain packaging measures until the legal challenges on Australia’s policy - including the WTO complaints that have been tabled by some of Canberra’s trading partners- are resolved. 

“We’re hopeful that there will be a WTO ruling, and we’re hopeful that we can make progress on this issue,” Key said last week. “But New Zealand’s always been a country from what I can recall, or see, that’s observed WTO rulings.” 

The debate about domestic policy space and international economic law is a long standing one. This case in New Zealand typifies, according to me, the interplay between the two. The postponement of implementation of a Plain packaging legislation pending the result of the dispute settlement proceedings at the WTO is an interesting case of the impact of multilateral trade rules on domestic policy making. Assuming that the WTO case rules that Plain packaging violates WTO obligations, will New Zealand withdraw it's legislation or go ahead risking non-compliance? There is nothing stopping new Zealand from going ahead with the legislation now and to that extent domestic policy space is not impacted. However, the existence of an international dispute settlement proceeding impacting the implementation of domestic law is in itself an interesting concept? Would the cause of international economic law be better served by such an approach? Or is it an unnecessary impediment to domestic sovereign will?

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?

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?

After Australia, its New Zealand - Tobacco Plain Packaging seems to cover the Australian continent

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

9. What are the likely impacts that plain packaging would have for manufacturers, exporters, importers or retailers of tobacco products?
   
10. What would be the impact of plain packaging on the market mix and retail price of tobacco products?
    
11. 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?
    
12. 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?
    
13. 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?
    
14. Would the ongoing costs of brand marketing increase or decrease over time under plain packaging?
    
15. 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?
    
16. 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?
    
17. Would it take longer for tobacco retailers to serve customers, and if so, why and by how much would this occur?
    
18. 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?