The WTO and Australia's Plain Packaging Laws

Earlier this month, according to an article in The Conversation, Cuba became the fourth country to challenge Australia’s plain tobacco packaging law - Tobacco Plain Packaging Act 2011 (CTH) - No. 148 of 2011 -  by requesting consultations with Australia through the World Trade Organization (WTO).

The Background

Introduced in 2011, the Australian government's mandating of 'plain packaging' for tobacco came as a world first. There have been similar proposals in New Zealand, Canada and America since. The legislation and associated regulations made it mandatory for cigarettes to be sold in drab dark brown packets without logos or advertisements, and with graphic health warnings covering 75 percent of the front of the pack and 90 percent of the back.

In response, several legal challenges were brought, primarily concerning the intellectual property of tobacco companies, including trademarks. Cuba has added its voice to the current applications by Ukraine, Honduras and the Dominican Republic and, although tobacco companies can’t bring claims directly in the WTO, but the industry has stated publicly that it is helping countries bring these claims.

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 in the case of British American Tobacco Australasia Limited and Ors v The Commonwealth of Australia [2012] HCA 43.

The Current Challenge

The WHO Framework Convention on Tobacco Control 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.

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 and this enhances Australia's position before the WTO.

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.

Click here to read more about the WTO Challenge.

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