Indonesia to challenge Australia's plain-packaging tobacco laws at World Trade Organisation

Updated

Indonesia has won the right to seek a ruling by the World Trade Organisation (WTO) on Australia's tobacco plain-packaging laws.

Trade sources said the WTO's disputes settlement body had agreed to set up an independent panel of trade and legal experts in order to assess whether Australia was breaching the rules of global commerce.

If its settlement body finds against Australia, the WTO has the power to authorise retaliatory trade measures.

Australia has faced a raft of challenges to its tobacco legislation, which was passed in 2011 and has been in force since December 2012. Politicians hope it will curb the number of people smoking.

Under the rules, all tobacco products have to be sold in drab green boxes, use the same typeface and contain graphic images of diseased smokers.

Indonesia, which exports more than $US670 million worth of tobacco a year, is the fifth country to take Australia to the WTO, after cases brought last year by Ukraine, Honduras, the Dominican Republic and Cuba.

The Latin American trio, who are all cigar producers, have cited concerns the legislation covers all tobacco products, not just cigarettes.

All four countries argue Australia's law breaches international trade rules and the intellectual property rights of brands - arguments rejected by the Government and which also failed to convince the Australian High Court in a case brought by tobacco firms.

The Geneva-based WTO ensures its 159 members respect the rules of global commerce. Its dispute-settlement process can last for years, amid appeals, counter-appeals and assessments of compliance.

Expert panels have already been given permission to hear the Ukrainian and Honduran cases, although Cuba has not moved beyond filing an initial complaint, and the Dominican Republic still needs to make a second request for a panel hearing.

This was Indonesia's first request for a hearing in the tobacco dispute, and Australia would have been able to block its move under WTO rules.

Observers said the fact Australia did not force Indonesia to lodge a second, unblockable request was a sign Canberra wanted a ruling as soon as possible.

AFP

Topics: health, tobacco, trade

First posted