Australia wins landmark tobacco packaging ruling at World Trade Organization

Australia won a clear victory in a major trade dispute over its pioneering tobacco packaging law.

Ruling effectively gives a green light for other countries such as Canada to roll out similar laws

In this computer-generated image provided by the Minister for Health and Ageing of Australia, cigarette packaging is stripped of all logos and replaced with graphic images. (Minister for Health and Ageing/Associated Press)

Australia triumphed on Thursday in a major trade dispute over its pioneering "plain" tobacco packaging law, with World Trade Organization judges rejecting a complaint brought by Cuba, Indonesia, Honduras and Dominican Republic.
 
The WTO panel said Australia's law improved public health by reducing the use of tobacco products, rebuffing claims that alternative measures would be equally effective. It also rejected the argument that Australia had unjustifiably infringed tobacco trademarks and violated intellectual property rights.
 
Australia's law, introduced in 2010, bans logos and distinctively-coloured cigarette packaging in favour of drab 
olive packets that look more like military or prison issue, with brand names printed in small standardised fonts.
 
The challenge to it was seen as a test case for public health legislation globally, and could lead to tighter marketing 
rules for unhealthy foods and alcohol as well as tobacco.
 
Honduras indicated that it was likely to appeal, saying in a statement that the ruling contained legal and factual errors and appeared not to be even-handed, objective or respectful of the complainants' rights.
 
"It appears that this dispute will require the review of the Panel's findings by the WTO Appellate Body before any final 
conclusions can be drawn," it said.
 
An Indonesian trade official said Indonesia would examine its options. Cuban and Dominican trade officials were not 
immediately available for comment.
 
Australia said it was ready to defend against an appeal.


         
'Dangerous precedent'

"We will not shy away from fighting for the right to protect the health of Australians," Trade Minister Steven Ciobo and 
Rural Health Minister Bridget McKenzie said in a statement. "Australia has achieved a resounding victory."
 
The World Health Organization welcomed the WTO ruling, saying it cleared "another legal hurdle thrown up in the tobacco industry's efforts to block tobacco control and is likely to accelerate implementation of plain packaging around the globe."
 
It said six other countries had brought in plain packaging laws — Hungary, Ireland, France, New Zealand, Norway and Britain — while another six had passed laws yet to be implemented —Burkina Faso, Canada, Georgia, Romania, Slovenia and Thailand.
 
"A number of other countries are examining the policy," the WHO added.
 
Vera Luiza da Costa e Silva, head of the secretariat of the WHO's Framework Convention on Tobacco Control, said there was already a "domino effect," with countries moving towards Australian-style rules and seeing them as a way towards the "endgame" with less than 5 per cent of the population smoking.
 
Geir Ulle, International Trade Director at Japan Tobacco International, said the decision was a major step backwards for 
the protection of intellectual property rights internationally.
 
"It sets a dangerous precedent that could encourage governments to ban branding on other products without providing 
any reliable evidence of benefits to public health," Ulle said, adding that recent data showed plain packaging was not working.
 
"This ruling doesn't make the policy right or effective, nor does it make it worth copying." 

"Tobacco plain packaging is an evidence-based measure that WHO recommends as part of a comprehensive approach to tobacco control," Tarik Jasarevic, a spokesman for the World Health Organization said on Thursday. 
 
Australia's law goes much further than the advertising bans and graphic health warnings seen in other countries.
 
Introduced in 2010, it bans logos and distinctive-coloured cigarette packaging in favour of drab olive packets that look more like military or prison issue, with brand names printed in small standardized fonts.
 
Cuba, Honduras, Dominican Republic and Indonesia complained at the WTO that the Australian rules constituted an illegal barrier to trade.
 
Tobacco firms have said the law infringes their trademarks and that the easily counterfeited packs will encourage smuggling, although they are not involved in the WTO case.
 
Tobacco giant Philip Morris declined to comment as it is not party to the dispute.