Peter Martin
September 3, 2012
The Age
A box of cigarettes with generic packaging.
AUSTRALIA has taken a hard line with Ukraine in the first round of an assault on our plain cigarette packaging rules at the World Trade Organisation in Geneva.
On Saturday, the former Soviet republic asked the WTO set up a panel to hear a dispute on ”measures concerning trademarks and other plain packaging requirements applicable to the tobacco products”.
The Ukraine has next to no cigarette trade with Australia but is home to a Philip Morris International subsidiary employing 1400 people. Corporations are not permitted to appeal to the WTO in their own names.
The Ukraine statement says Australia’s law requiring all cigarettes to be sold in plain packets is ”more trade restrictive than necessary to achieve the stated health objectives and constitute[s] an unnecessary obstacle to trade”.
Rather than agreeing to the establishment of a disputes resolution panel as is customary in less serious disputes, Australia rejected the request, arguing the law was ”a sound, well-considered measure designated to achieve a legitimate objective, the protection of public health”.
Public health measures are permitted under WTO rules so long as they don’t unnecessarily restrict trade.
Australia’s rejection of the request for a panel is a symbolic rather than a practical measure. Ukraine will have to ask for a second time at the next WTO meeting on September 28. Australia would be unable to reject a second request.
The dispute would take some months to hear, during which Australia could continue to require plain cigarette packets from December 1.
If the dispute’s panel finds against Australia, the WTO will have the right to impose trade sanctions, should Australia continue to enforce the law.
Australia is fending off a second attack on its plain packaging laws in Hong Kong, where British American Tobacco has moved the headquarters of its Australian holding company. It is arguing Australia has breached the requirements of an Australia-Hong Kong investment treaty
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