* Australia's plan for drab packaging challenged
* Opponents say such packaging restricts trade
By Stephanie Nebehay
GENEVA, May 22 The tobacco industry is providing
legal advice to Ukraine and Honduras in their challenges to
Australia's new tobacco packaging rules at the World Trade
Organization, Australian Health Secretary Jane Halton said on
"We know that the tobacco companies, because they have
admitted it, are providing legal advice to WTO members in order
to encourage them to take action against Australia," she said.
Halton was speaking at an event on the sidelines of the
World Health Organisation's annual ministerial assembly in
Geneva, where WHO director-general Margaret Chan called for
stepping up the "tooth-and-nail fight against one of public
health's biggest enemies -- the tobacco industry."
Australia is planning to introduce tough new packaging
regulations for tobacco from October 1 which will force
producers to abandon distinct colorful branding and sell their
cigarettes in uniformly drab packets with no adornments. Other
tobacco products such as cigars must follow suit by December 1.
"We believe this deals with one of the last forms of tobacco
advertising in our country - the packet," Halton said. "We are
very very confident that we can withstand these attacks, our
government will not be intimidated."
Smoking rates in Australia have declined to 15.1 percent in
2010 from some 30.5 percent in 1998. "Our objective in the next
few years is to reach 10 percent and hopefully lower," she said.
Ukraine and Honduras have challenged the move at the WTO by
saying it unfairly restricts trade, even though neither country
has a significant share of the Australian market.
"We are a long way from both countries and we have very,
very little trade with them," Halton said.
Both complainants have "requested consultations" with
Australia, the first step in the WTO legal process. The first
round of negotiations was held in the past month, she said.
"Our belief is that some people in the meeting were British
American Tobacco lawyers," she told Reuters, adding that she
wasn't aware of any date for a second round.
A spokesman for British American Tobacco confirmed
to Reuters that the company had provided assistance for the WTO
challenges but could not confirm that BAT lawyers were directly
involved in the talks.
If the case is not settled by negotiation, Honduras or
Ukraine could ask the WTO to set up a panel of arbitrators to
judge the dispute. If Australia were to lose, it could be forced
to undo some of its rules on tobacco.
The two trade suits have attracted a large number of
countries as third party observers to the disputes, and some
diplomats see them as test cases in the struggle by tobacco
firms to halt a global tide of regulation that has sharply
tightened the rules on cigarette sales over the past decade.
British American Tobacco, Imperial Tobacco and
Philip Morris have launched High Court challenges against
the Australian laws, saying they infringe their trademark
Halton told Reuters that she expected that the High Court's
decision could come by October.
She also said health must be factored into trade in future.
"When we negotiate new trade agreements, we need to be very
clear that the right to protect health of our community is
paramount. We will make sure we live up to our obligations under
the Framework Convention on Tobacco Control," she told the
talks, referring to the WHO's treaty ratified by 174 countries.
Philip Morris' chief financial officer Hermann Waldemer has
said he expects more countries to challenge Australia's rules at
the WTO, according to a transcripts analyst calls provided by
A Philip Morris spokeswoman told Reuters earlier this month
that the firm was open to supporting governments that challenge
Australia on plain packaging but it was not providing support to
Ukraine in its WTO complaint.