WTO panel cites FCTC in trade dispute

31 Oct 2011

In September, the panel rendered its decision in a dispute between Indonesia and the United States over the latter’s banning of flavourings in cigarettes. Among other claims, Indonesia argued that the regulation was unnecessary for health since there was no evidence that it would deter youth smoking.

In rejecting that argument, the panel concluded that such a “measure actually represents at least the majority view, and potentially the unanimous view” among tobacco control experts, citing the FCTC Partial Guidelines for Articles 9&10. The Partial Guidelines were adopted by the FCTC Conference of the Parties at its fourth session in November 2010, and deal with flavourings and additives to tobacco products.

“Since the original FCTC negotiations, we have wondered and worried about how the international trade legal regime would interact with tobacco control regulations,” said Laurent Huber, FCA director. “While there is still much uncertainty, it is clear that the FCTC is now seen as the final word in defining best practices in tobacco control.”

The overall WTO decision was mixed, with the panel finding that the U.S. regulation was invalid because it did not include a ban on menthol flavouring. The U.S. is appealing this part of the decision, but in the end may be forced to allow flavourings – or at least cloves, which is at the centre of the Indonesian dispute – in order to comply with WTO rules.

Before the 2009 ban, Indonesia controlled a small but growing market for clove kretek cigarettes in the U.S.

Read more:

WTO dispute resolution panel report

Analysis of the panel’s report by the O’Neill Institute

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