Indonesia Files Complaint to WTO over Australia’s Plain Packaging Act
Indonesia and four other countries have filed an official complaint to the World Trade Organization (WTO) over a recent new law in Australia. This law (‘2011 Tobacco Plain Packaging Act’), in effect since 1 December 2012, requires the removal of all branding (such as colours, imagery, and corporate logos) on cigarette packages. Indonesia’s Trade Ministry believes that the law violates several WTO rules, such as an agreement on trade-related aspects of intellectual property rights and an agreement on the technical barriers to trade.
The other countries that join Indonesia’s legal challenge are Cuba, the Dominican Republic, Honduras and Ukraine. After bilateral talks failed, the five countries now allege that Australia’s new law is a violation of article XXIII of the 1994 General Agreement on Tariffs and Trade (GATT). Reportedly, over 35 other countries join the complaint as third party, evidencing strong backing.
Although Indonesia does not export many tobacco products to Australia, the country filed a complaint as Australia’s new law may set a bad precedent that can harm Indonesian tobacco products exports to other countries if similar laws were to be implemented. Countries such as New Zealand and Ireland have indicated that they may introduce a plain packaging rule as well. However, these countries will wait with implementation of such a policy until the WTO’s Dispute Settlement Body (DSB) has issued a final ruling (which is expected in 2016).
Indonesia’s Trade Ministry emphasizes that it is not against measures to combat smoking. In fact, the government has implemented various policies to curb domestic smoking (particularly among young Indonesians), including the use of graphic health warnings on cigarette packages.
Indonesia is one of the world’s largest tobacco products manufacturers. The domestic tobacco industry provides employment opportunities to about six million people.
This new tobacco case comes shortly after a previous case had been settled. Indonesia filed a complaint to the WTO after the USA banned domestic sales of flavoured cigarettes, including clove-cigarettes (a trademark of Indonesia) in 2009. Indonesia argued that this ban was discriminatory as it exempted sales of menthol cigarettes. After four years of litigation, an agreement was reached between both sides.