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.

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.

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?