WTO Hears Health, Economic Considerations Of Plain Packaging For Tobacco

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In its meeting this week, the World Trade Organisation intellectual property committee heard again about the issue of plain packaging of tobacco products, as New Zealand is proposing to introduce such a regime in the country. Economic and health interests were used by those opposed and proponents to the measure.

The WTO Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS) met from 5-6 March. The Dominican Republic had asked for a discussion on New Zealand’s introduction of a “plain packaging” regime for all tobacco products.

In a document [pdf] circulated to WTO members, New Zealand explained that on 19 February, “the New Zealand Government announced its decision to work towards the introduction of a ‘plain packaging’ regime for all tobacco products in New Zealand.” This decision was taken “to advance New Zealand’s public health objectives and follows a comprehensive public consultation process.”

“Smoking,” the document said “is the single largest cause of preventable death and disease in New Zealand,” especially among the country’s indigenous peoples.

In particular, plain packaging will reduce the appeal of tobacco products, and increase the noticeability and effectiveness of mandated health warnings, and “combined with New Zealand’s existing package of tobacco control measures,” contribute to discouraging people from taking up smoking, encouraging people to give up smoking, and reducing people’s exposure to smoke from tobacco products.

Dominican Republic Says Measure Unlawful, Cites Economic Concerns

The Dominican Republic, according to an unofficial translation of its statement said that “generic” packaging is a threat to several intellectual property rights and inconsistent with international obligations under the TRIPS Agreement and the Paris Convention for the Protection of Industrial Property.

Trademarks and other elements that are part of the packaging of products play an important role in providing essential information to consumers, it said. Eliminating all distinctive characteristics, designs and trademarks from the tobacco products packaging make those products essentially identical. Those measures would consequently destroy the intellectual property rights, and would impede consumers’ ability to get basic information on the products they can buy, creating confusion on the market and reducing competitive opportunities for imported tobacco products.

The measure would not promote public health objectives, it said. On the contrary, it would have an adverse effect, increasing tobacco consumption as a result of lower prices arising from the uniformity of all tobacco products. Furthermore, plain packaging will facilitate falsification and smuggling of products, they said.

The Dominican Republic said the measures proposed by New Zealand would violate Articles 20 (on other requirements on trademarks), 22.2(b) (on the protection of geographical indications), and 24.3 (on exceptions) of the TRIPS Agreement, and Article 10bis (on unfair competition) of the Paris Convention.

The Dominican Republic has registered its first geographical indication “Cigarros Dominicanos” after a two-year process to identify and promote the quality of those cigars in the world and the country considers that the New Zealand measures would lessen the value of this geographical indication in New Zealand.

In the Dominican Republic, about 55,000 people work directly in tobacco production and some 63,000 others work in the tobacco sector, with some 500,000 additional indirectly tobacco-related jobs in the country. In 2012, the tobacco exportations reached US$ 520 million and represented about 10 percent of the total exportations of the country, the statement said. Those numbers give an idea of the social consequences that those measures could have on countries such as the Dominican Republic, it said. It did not specify the amount of tobacco trade with New Zealand.

The Dominican Republic said it supports tobacco control initiatives but is opposed to measures that could destroy competitive opportunities of producers of superior quality products, when they could be replaced by less restrictive alternative measures, they said.

The Dominican Republic asked New Zealand not to approve the measures or at least wait until the decision of the WTO Dispute Settlement Body on the ongoing dispute with Australia.

A similar discussion took place at the October 2011 TRIPS Council meeting when Australia introduced a plain packaging legislation (IPW, WTO/TRIPS 23 October 2011). The issue has brought about three formal WTO dispute against Australia’s measure from Ukraine, Honduras, and from the Dominican Republic (IPW, WTO/TRIPS, 20 November 2012).

The United Kingdom has also conducted consultations on “standardised packaging of tobacco products” last year, and this week British newspaper The Guardian said legislation on plain cigarette packaging is expected to be announced in the Queen’s speech in May.

WHO: Tobacco a Drag on Global Economy

The World Health Organization stepped in yesterday in support of plain packaging. “The economic costs of tobacco use are as equally as devastating as the public health costs,” it said in its statement [pdf]. “Though the tobacco industry routinely cites the economic contribution of tobacco, the reality is that tobacco use puts an enormous financial burden on countries, in addition to the fact that tobacco and poverty are inextricably linked at the individual level.”

The WHO added that “conservative estimates suggest that tobacco’s more than US$500 billion drain on the world economy exceeds total annual health expenditures in low- and middle-income countries.” Tobacco also “represents the leading modifiable risk factor in the fight against the growing epidemic of noncommunicable diseases (NCDs),” it said.

“WHO is of the view that the implementation of plain tobacco product packaging, representing a legitimate tobacco control measure, will have a substantial impact on tobacco consumption, is fully in line with the spirit and intent of the outcome of the UN High-level Meeting, and is in accordance with international legal obligations under the WHO Framework Convention on Tobacco Control,” it said.

The Convention Secretariat of the WHO Framework Convention on Tobacco Control (FCTC) provided information of the framework and said in its statement [pdf] that “Article 11 of the Convention requires Parties to adopt and implement effective measures in respect of the packaging and labelling of tobacco products, including health warnings and other appropriate messages.”

According to the WHO FCTC, after seven years of implementation, “Article 11 is one of the articles of the Convention attracting the highest implementation rates among Parties.”

Tobacco Industry Reaction, New Zealand Expects Legal Trouble

New Zealand’s associate Minister of Health Tariana Turia said in her plain packaging announcement on 19 February: “In making this decision, the Government acknowledges that it will need to manage some legal risks. As we have seen in Australia, there is a possibility of legal proceedings.”

“To manage this, Cabinet has decided that the Government will wait and see what happens with Australia’s legal cases, making it a possibility that if necessary, enactment of New Zealand legislation and/or regulations could be delayed pending those outcomes.”

The British American Tobacco company issued a response to the New Zealand’s decision also on 19 February. Kingsley Wheaton, director of corporate and regulatory affairs, said in the release: “The New Zealand Government has listened to the many arguments for and against this regulatory measure and has acknowledged both the importance of the issue to its trade obligations, as well as the impending World Trade Organisation challenge that Australia is currently facing.”

“We remain opposed to the plain packaging of tobacco products not only because of the lack of credible evidence to suggest it will deliver its policy aims but also due to the likely and serious unintended consequences,” Wheaton said in the release. Among unintended consequences, according to the British American Tobacco are the rise in the number of smokers willing to turn to the black market, and the rise in counterfeit products.

Other Items on the TRIPS Council Agenda

For the second time, the TRIPS Council had a discussion on innovation. In this session, the focus was on small to medium-sized enterprises, at the request of the US, Chile, South Korea and Taiwan.

Member country delegates also discussed, with unchanged positions, the hypothetical amendment to the TRIPS Agreement to require the compulsory disclosure of origin of genetic resources in patent applications, according to a WTO source. Developing countries are in general in favour of such disclosure while most developed countries view it as possibly hindering innovation.

According to the WTO source, some members called for consultations chaired by the WTO director general to be revived, so that agreement could be reached by the WTO December Ministerial Conference in Bali.


Catherine Saez may be reached at info@ip-watch.ch.

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