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Australia’s plain tobacco packaging law at the WTO

Earlier this month, Cuba became the fourth country to challenge Australia’s plain tobacco packaging law by requesting consultations with Australia through the World Trade Organization (WTO). Tobacco companies…

The tobacco industry has stated publicly that it’s helping countries bring claims against Australia’s tobacco plain packaging law. LUKAS COCH/AAP

Earlier this month, Cuba became the fourth country to challenge Australia’s plain tobacco packaging law by requesting consultations with Australia through the World Trade Organization (WTO).

Tobacco companies can’t bring claims directly in the WTO, but the industry has stated publicly that it is helping countries bring these claims.

International significance of plain packaging

According to the World Health Organization (WHO), “[t]obacco kills nearly 6 million people each year”, and global tobacco consumption is increasing.

In international terms, the Australian market for tobacco products is tiny, with its population of 23 million and a smoking rate of around 16%. But if other countries follow Australia’s lead in requiring standardised packaging as part of a comprehensive strategy of tobacco control, it will hurt the industry’s bottom line. Tobacco companies are rightly concerned, which explains their aggressive response to the Australian law.

The industry has already suffered major setbacks in its campaign against plain tobacco packaging.

In 2012, the Australian government successfully defended claims under constitutional law brought by the multinational tobacco companies British American Tobacco, Imperial Tobacco, Japan Tobacco and Philip Morris in the High Court of Australia.

More recently, New Zealand announced its eventual aim of introducing similar laws.

A question of development or profits?

In taking the first step towards a legal dispute against Australia at the WTO, Cuba joins Ukraine, the Dominican Republic and Honduras.

A few days ago, a Swiss public relations company issued a press release on behalf of the Dominican Republic, stating:

We welcome Cuba’s decision to join the list of developing countries that are fighting for the livelihoods of hundreds of thousands of tobacco workers.

The idea that tobacco control is a developed country tactic opposed by developing countries is ludicrous. The burden of tobacco-related death and disease falls disproportionately on the developing world and on the poorest people of countries worldwide, and the profound negative impact of tobacco on social and economic development is universally recognised.

The WHO Framework Convention on Tobacco Control (WHO FCTC) has 176 parties (including Australia, Honduras and Ukraine) and covers 88% of the people of the world. Developing countries from Africa, Asia, Latin America, the Middle East and the Pacific have championed the high standards set by the treaty and its guidelines.

So the underlying interests fighting Australia’s plain packaging law are not developing countries, farmers or workers but the global tobacco industry. Tobacco companies have brought direct and indirect claims against Australia in every tribunal possible, beginning with the High Court case already mentioned.

Philip Morris Asia Limited has brought an investment claim against Australia under the Hong Kong - Australia Bilateral Investment Treaty. Philip Morris is also pursuing an investment claim against Uruguay, a developing country that is at the forefront of international efforts to combat tobacco.

Domestic litigation by tobacco companies also continues in developed and developing countries around the world in relation to various tobacco control laws, including graphic warnings in the United States.

And what is the industry’s connection to Cuba? The Cuban monopoly that exports Cuban cigars and other tobacco products, Habanos SA, is half owned by a subsidiary of Imperial Tobacco.

Likely outcomes at the WTO

Australia has strong grounds to win the WTO dispute.

All four countries' complaints concern the impact of the Australian law on intellectual property (such as tobacco trade marks) and imported products (cigarettes and cigars).

But the law applies equally to all tobacco products from all countries, including Australia and New Zealand. The law is also based on years of research showing that standardised packaging will reduce the appeal of tobacco products and enhance the effectiveness of health warnings. Finally, the law implements Australia’s obligations under the WHO FCTC. All these factors enhance Australia’s position in the WTO dispute.

If it proceeds, Cuba’s complaint is likely to be heard alongside those of the other three countries by a single panel of three people. Panel proceedings usually take around a year and are often followed by an appeal lasting several more months.

If Australia did lose the WTO dispute, it would not be required to pay any financial compensation. Instead, it would have time to change its plain packaging laws to accord with WTO rules.

For the industry, whether Australia wins or loses, supporting the WTO challenge is simply part of its long-standing strategy of delaying and hindering tobacco control regulations wherever possible.

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38 Comments sorted by

  1. I am Cornholio

    None

    Good. I hope Cuba wins. The Nanny State has no right to decide or discourage what an individual does to one's own body.

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    1. Gary Murphy

      Independent Thinker

      In reply to I am Cornholio

      But it's OK for the WTO to dictate to a democratic sovereign nation what laws it can pass?

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    2. Mike Swinbourne

      logged in via Facebook

      In reply to I am Cornholio

      No-one is stopping you from smoking Damien.

      If you want to inhale toxic chemicals and increase your chances of dying younger from debilitating diseases, go ahead. Smoke away.

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    3. David Bentley

      logged in via LinkedIn

      In reply to I am Cornholio

      I don't see how the current laws "discourage" an individual from smoking. An individual can still buy cigarettes freely and they can still determine which cigarette brand they prefer to kill themselves with. The only thing that has changed here is that there's a reduction in the allowed level of "encouragement" through the limitation of advertising space and visibility.

      Is the elimination of an encouragement a discouragement? No.

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    4. Henry Verberne

      Former IT Professional

      In reply to I am Cornholio

      Does that include euthanasia Damien? Smoking affects more than the individual, it has large costs which are imposed on society. Not going to elaborate as this has been repeatedly documented.

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    5. Jeremy Hall

      PhD student

      In reply to I am Cornholio

      They're well within their rights to educate you about the product though. Otherwise only the tobacco companies will do so, and frankly I don't know if they'd be entirely honest about it.

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    6. John Crest

      logged in via email @live.com.au

      In reply to Gary Murphy

      Yes, it is. Australia, of its own free will, signed up to the WTO. Thus, Australia has obliged itself to abide by the rules and rulings of the WTO, howsoever the dispute is resolved.

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    7. Gary Cassidy

      In reply to I am Cornholio

      RE: "The Nanny State has no right to decide or discourage what an individual does to one's own body."

      Corporations have no right to influence individual or population behaviour using proven methods of behaviour change when the changes are detrimental to the health of individuals and whole populations.
      While we all have free will, that free will is highly influenced by our environment (including advertising). Tobacco companies know this, they know how to manipulate our environment to maximise their product sales.
      I say thank you Nanna!

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    8. Robert Tony Brklje
      Robert Tony Brklje is a Friend of The Conversation.

      retired

      In reply to David Arthur

      No private entity has the right to profit at the expense of others, it is the responsibility of the state to prevent this, rather than allow the failure of judgement to occur. So should tobacco companies attempt to sell their product they should be made 'FULLY' liable for that, not just the cost but the negligent criminal intent for the harm they cause.
      Those foolish enough to repeat the comments of an idiot politician with regard to a Nanny State, the goal of the state should be to prevent known causes of harm and suffering and not to allow or promote management by failure.

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    9. David Arthur

      resistance gnome

      In reply to Robert Tony Brklje

      Fair comment, Mr Brklje.

      My response to Mr Bezborodov is the 'least-case' response, that accepts his (ridiculous, IMO) assumption that humans are nothing but rational individuals, under which (utterly ridiculous, IMO) assumption, there is no such thing as addicted behaviour.

      What I'm pointing out to Mr Bezborodov is that tobacco companies are bludging off taxpayers who fund the healthcare system; use of their product causes harm which requires health expenditure, which is funded from the public purse. That is, tobacco companies are past masters of the principle of corporate irresponsibility: privatise the profit, socialise the cost.

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    10. I am Cornholio

      None

      In reply to Henry Verberne

      > Does that include euthanasia Damien?

      Yes.

      > Smoking affects more than the individual, it has large costs which are imposed on society.

      What costs to society? You cannot have the ATO steal my income to fund a socialist healthcare system then argue that I am imposing a cost on society. Either deal with the so-called "costs" or privatise healthcare. I'd prefer the latter.

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    11. David Arthur

      resistance gnome

      In reply to I am Cornholio

      Privatising healthcare doesn't work for anyone, not even rich people.

      This is because non-rich people cannot afford privatised healthcare, and are a pool of infection from which rich people are perennially re-infected.

      [Despite all the smoking?] Cuba ($10,200 per capita GDP, socialised health care) has life expectancy at birth of 76.5 years for males, and 80.5 years for females. On the other hand, the US ($49,800 per capita GDP, privatised health care) has life expectancy at birth of 75.3 years for males, and 80.5 years for females.

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    12. I am Cornholio

      None

      In reply to David Arthur

      Perhaps you are right about the higher costs of private healthcare or perhaps not (the U.S. is a poor metric with many confounding factors), but that is not my point...

      While we have a mixed public/private healthcare system in Australia, socialist ideology should not be used to justify encroaching upon personal civil liberties.

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    13. I am Cornholio

      None

      In reply to Gary Murphy

      Well spotted, Gary. I retract the first part of my statement regarding the WTO. We should not let supranational institutions erode our sovereignty.

      The latter part of my statement regarding personal liberty stands though.

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    14. David Arthur

      resistance gnome

      In reply to I am Cornholio

      Well in that case, get the hell out of my space with your filthy dirty polluting tobacco. Until and unless you can totally avoid all tobacco exhalation, you are a clear and present infringement on my civil liberties.

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    15. I am Cornholio

      None

      In reply to David Arthur

      > Well in that case, get the hell out of my space with your filthy dirty polluting tobacco. Until and unless you can totally avoid all tobacco exhalation, you are a clear and present infringement on my civil liberties.

      Correct, if I am on public land with you, it is your civil right to be in a pollution-free environment. If it is a private venue, it is the right of the proprietor (the land owner) to decide whether to allow smoking, smoking zones, or no-smoking at all.

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    16. David Arthur

      resistance gnome

      In reply to I am Cornholio

      No, not just that: if the building you are in exhausts your dirty filthy pollution to the rest of us, then the building is in breach.

      Anyway, your comment about the US is pretty feeble: with 4.5 times Cuba's per capita GDP, it still has lousier life expectancy.

      Land of the free, indeed.

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    17. I am Cornholio

      None

      In reply to David Arthur

      I'm not commenting in the U.S.; they are completely different from Australia.

      > No, not just that: if the building you are in exhausts your dirty filthy pollution to the rest of us, then the building is in breach.

      I would have to be lighting a pretty fat bloody cigar for that to happen!!! You are clearly delusional!

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    18. David Arthur

      resistance gnome

      In reply to I am Cornholio

      You may not be commenting in the US, but the proposition that health care be privatised has been show to be a failure ... by the US. Ergo, health care should remains in the public sector.

      So how does that correlate with the user-pays principle? Through consumption taxation - in the case of tobacco, tobacco excises. That way, direct ill-health due to tobacco, whether suffered by smokers or by their victims has been funded.

      The issue of callous disregard for the health of others is, of course, another issue again.

      This is not an issue of me being delusional so much as you not understanding that because there is more than one human on the planet, some social organisation is required.

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    19. I am Cornholio

      None

      In reply to David Arthur

      > You may not be commenting in the US, but the proposition that health care be privatised has been show to be a failure ... by the US. Ergo, health care should remains in the public sector.

      I have not refuted your claim, but clearly the current public/private mixed healthcare system in Australia is functioning reasonably efficiently; however, there is (citable) evidence that there is overlap between public/private sectors and thus, there is still room for further improvement.

      > So how does…

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    20. Gary Murphy

      Independent Thinker

      In reply to David Arthur

      I'd agree with you that the government has no right to dictate to an individual what they do to themselves. But I do think they are justified in preventing corporations from promoting dangerous and addictive products - especially when most addicts take up the habit when they are still children.

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    21. David Arthur

      resistance gnome

      In reply to Gary Murphy

      Thanks Gary, that's exactly the point I'm trying to get through to Damien.

      Thanks you for explaining it in simple enough terms for him.

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    22. David Arthur

      resistance gnome

      In reply to I am Cornholio

      Room for improvement in the health care system? Decreasing harm to self and others would be a good start, hence plain packaging of tobacco products.

      I'm glad you see the benefits of taxing tobacco products, but you're in Denial if you think tobacco is excessively taxed. Look at the health costs inflicted on the hospital sector through tobacco use.

      The proposition that smokers cost less is just laughable - they cost way, way more. Since the vast bulk of health costs are incurred in the last 12 months of life, irrespective of the age at which those last 12 months occur.

      "Do you think that without government, people cannot organise themselves?" Of course they organise themselves ... by establishing governments.

      I too believe in minimal government, it's just that I've thought about this long enough to see that even minimal government is a hell of a lot bigger than appointing a sheriff, a judge and a hangman.

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    23. Matthew Thredgold

      Software Engineer/Secondary Teacher

      In reply to I am Cornholio

      If laws to protect citizens from predatory drug pushers are seen as "Nanny State" then all hail the Nanny State.

      Better that then have my friends, children and others in society die unnecessarily.

      And while we're on the topic, yesterday my personal space in an indoor designated smoke free place was invaded on two occasions by e-cigarette users and I had to breathe a fugue of nicotine laced air. No it wasn't as annoying as a real cigarette, but it was an assault nonetheless, and in a hard fought for smoke free place. It is time to legislate all cigarettes, including e-cigarettes, out of existence. Chew gum, wear patches, get some willpower from whatever small strength of character they may have, but do not expose others to pharmacologically active nicotine. It would be possible to become addicted to nicotine by passive smoking of e-cigarette fumes. Legislation needs to clarify No Smoking includes e-cigarettes as well.

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    24. I am Cornholio

      None

      In reply to Gary Murphy

      Its about brand recognition. If I go to a store, I should be able to at a glance be able to recognise the packaging of the cigarettes and identify which brand I want to buy. I should also be able to pick up the packaging and read about the product. For example, I should be able to read that the tobacco manufacturer recommends a particular product for smoking as rolled up cigarettes, or as pipe tobacco, and if they are cherry flavoured or have any other things that make the brand different, they should be able to advertise that to me on the packaging.

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    25. Matthew Thredgold

      Software Engineer/Secondary Teacher

      In reply to Mike Swinbourne

      Actually I would like to stop Damien from smoking.

      Too many people get hurt, killed, injured, inconvenienced and annoyed by tobacco smoke in the environment.

      So I would like Damien and all his fellow smokers to stop smoking to stop the harm to everybody else. Society would be better off with compete prohibition.

      Saying that, I don't care what he does in the privacy of his own home, and the slow suicide he does to himself. I have a problem in so far as he will then leave his house, and…

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  2. Jim KABLE

    teacher

    A lot of people with pro-tobacco stance suddenly rushing to its unhealthy defence With the standard cliched comments. On such a forum? Who'd have thought?

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    1. I am Cornholio

      None

      In reply to Jim KABLE

      Science is great at highlighting health risks, but it is up to the individual (not the government or public health administrators) to make an informed cost-benefit analysis. It is the responsibility of the consenting adult to decide if the well-researched risk of smoking tobacco is worth the pleasure from nicotine or not. Government is encroaching on our civil liberties the more it tries to protect us from harm.

      It is hypocritical of certain schools of thought to advocate the legalisation of marihuana on one hand while imposing tougher regulations on tobacco and alcohol on the other.

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  3. Gavin Moodie
    Gavin Moodie is a Friend of The Conversation.

    Adjunct professor at RMIT University

    I am disappointed that Cuba should further erode its progressive position by supporting the tobacco companies. Sure, it has a big financial stake in tobacco, but the whole point of progressive politics is to put general interests above particular interests.

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    1. I am Cornholio

      None

      In reply to Gavin Moodie

      If people want to smoke, it is in their "general interest" that a tobacco company supplies them with tobacco and lobbies on their behalf. People support these companies and corporations out of free will, because they purchase their product. I feel the same way when people complain about the gun-lobby. When I buy a firearm, I EXPECT firearm manufacturers to use some of the profit they make to lobby the government. The corporations are representing the will of their consumers! It is a symbiotic relationship between producer and consumer. Capitalism is far from perfect, but when it works, it is a beautiful thing.

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    1. Gary Cassidy

      In reply to Janeen Harris

      RE "I'd like to see plain packaging on more products such as junk food, a ban on the advertising of gambling and alcohol. These things would, however, only be in the public interest. We can't have that now, can we."
      I agree Janeen. Taking away the right to modify peoples behaviour when the resulting behaviour change has a negative affect on individuals/societies should be a necessary goal of government. I have no problem with advertising for t-shirts or coffee mugs.

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    2. I am Cornholio

      None

      In reply to Janeen Harris

      Plain packaging on junk food? You authoritarian socialist types really like to get carried away!! Or is this some type of sarcastic perverse parody?

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    3. I am Cornholio

      None

      In reply to Gary Cassidy

      What kind of nonsense is this? Are you seriously advocating advertising all potato chips in plain brown packaging? These sound like the words of some bland authoritarian dictator in some strange, ugly, (and thankfully) non-existent dystopia.

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  4. Ross MacKenzie

    Lecturer in Health Studies at Macquarie University

    The WTO appeal by Cuba et al will likely be unsuccessful. In the longer process, the outcome of PM's investment claim is less certain due to the terms of investment treaties, despite the circumstances surrounding PM Asia's acquisition of PM Australia - thus enabling the claim againt plain packaging to be made. Bilateral treatt disputes like this one present real concerns.

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