In what has been viewed as a test case for public health legislation globally, Judges at the World Trade Organisation (WTO) rejected arguments brought by Cuba, Indonesia, Honduras and Dominican Republic who complained that the Australian law constituted an illegal barrier to trade.
The WTO said Australia’s law contributed to improving public health by reducing use of and exposure to tobacco products, dismissing claims that alternative measures would be equally effective.
The ruling, which also rejected the complainants’ argument that Australia’s law infringed tobacco trademarks and violated intellectual property rights, is expected to be appealed.
“Tobacco plain packaging is an evidence-based measure that WHO recommends as part of a comprehensive approach to tobacco control,” WTO spokesman Tarik Jasarevic said. “A positive decision from the WTO panel is likely to accelerate global implementation.”
Some believe the WTO ruling could lead to similar packaging rules being applied to the food and alcohol markets.
Mike Ridgway, director of the CPMA has long expressed his concern over plain packaging law, a version of which was also introduced in the UK in 2016.
“For the packaging industry this precedent for increased regulation moving into other market sectors is of concern,” he said. “The introduction of minimum pricing for alcohol in Scotland is the start of market intervention and the ‘slippery slope’ into packaging health warnings followed by graphical warnings leading to restrictions on logos, branding in a similar way to that of tobacco. These restrictions would be a further attack on brands and a threat to the Intellectual Property rights of the brand owners.”
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.
Geir Ulle, international trade director, 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.”
An Indonesian trade official said Indonesia would examine its options.
There is some uncertainty surrounding the expected appeal and the dispute’s final outcome not least because US President Donald Trump vetoed new WTO judicial appointments last year. Three have already left the seven judge panel and Trump blocked replacements, leaving just four judges to deal with a backlog of disputes.