Australia Sued on Cigarette Plain Packaging to WTO

Australia sued by five countries to the WTO for violating Article XXIII of the General Agreement on Tariffs and Trade (GATT) 1994. Australia considered erroneous implement policies requiring plain packaging of all tobacco products. Indonesia's claim to the WTO with Honduras, the Dominican Republic, Ukraine and Cuba. These five countries first submitting documents to the WTO Dispute Settlement Body that contains legal argument about Australian policies implemented since 1 December 2012. The policy requiring plain packaging for all tobacco products, and it is in violation of the provisions in the WTO.

In view of Indonesia, Australia policy contrary to Article XXIII of GATT 1994, as well as three other WTO provisions namely: understandings on rules and procedures governing the settlement of disputes; agreement on trade-related aspects of intellectual property rights; and agreement on technical barriers to trade.

Director General of International Trade Cooperation of Indonesia, Bachrul Chairi, explained, this suit is the last step. In the WTO litigation, process is taken after a bilateral approach attempts Indonesia before, to no avail.

With five state plaintiffs and more than 35 countries members of the WTO to join as a third party, this case became the biggest case in the history of the WTO. Normally cases handled by the WTO Dispute Settlement Body in which between 18 months to two years, it is predicted that the decision on this case will be published in 2016.

Some countries such as New Zealand and Ireland have indicated plans to follow the steps of Australia about plain packaging policy. However, countries such as the plaintiffs urge that the policy should be postponed until the implementation of the WTO Dispute Settlement Body gives its verdict on Australian policy.

This case is more than just a business dispute as a matter of principle in the governance of world trade. This makes many WTO members are interested in participating as a third party. Indonesia is the sixth biggest producer of tobacco products and the 13th largest producer of tobacco leaves in the world. This sector provides employment directly and indirectly, more than six million people. However, Indonesia is still quite active through various approaches to reduce the number of smokers as well as smokers beginners considering the danger they cause.

image source: smokernewsworld.com

Indonesian cigarette restrictions concerned that steps taken are not in conflict with trade rules agreed in the WTO. Indonesian One objection is that the policy is taken by Australia about plain packaging without first scientifically proven. This step is assessed can not assure whether effective than other alternatives are possible.

It must be admitted that the export of tobacco products from Indonesia to Australia is fairly small. However, Indonesia interest to complain this issue to the WTO Dispute Settlement Body. When the plain packaging policy approaches such as this is allowed, then the kind of way that would be a bad precedent and will be followed by other countries in restricting or prohibiting the sale of certain products.

For Indonesia, the decision to take the path to the WTO is more intended to prove the fallacy of Australia. Indonesia did not oppose efforts to reduce the number of smokers aware of the dangers. Desired only to prove that the policies pursued by the Australian suspected violation of WTO agreements and wrong.

Bachrul gave an example for wine alcoholic beverage products. If the approach taken by Australia as above is considered true and valid according to the WTO agreement, then based on the moral and religious grounds could be Indonesia implemented a policy of plain packaging for wine products.

However, instead of lowering the level of wine consumption, such a policy might increase smuggling wine from abroad. In addition, the illegal production of alcoholic beverages in the country may be more difficult to handle.

In addition, plain packaging also makes the price more affordable and more easily accessible. It is dangerous to children. That's why Australia is implementing policies on cigarette plain packaging to be canceled, for violating the terms of trade in the WTO.