July 10, 2013 / 10:32 PM / in 5 years

Anti-smoking Australia prevails in dry run of WTO dispute

GENEVA (Reuters) - In a dry run of one of the biggest legal battles in public health, an advocate for Australia’s tobacco policies has delivered seemingly strong rebuttals of objections likely to be mounted in a landmark case at the World Trade Organization.

Two top academic lawyers presented the arguments at the Graduate Institute in Geneva, a stone’s throw from the WTO, where Ukraine, Cuba, Honduras and the Dominican Republic are trying to overturn Australia’s radical tobacco packaging law.

Australia introduced the law late last year, requiring cigarette packs to be uniformly dark brown, emblazoned with health warnings, and with the name of the product printed in a standardized small font, with no colors or logos.

Its defense at the WTO is widely seen as the crucial battle that the tobacco companies must win if they want to halt the advance of anti-tobacco laws globally, which the World Health Organization says will result in a “brave new world of tobacco control”.

Legal experts present at Tuesday’s academic debate said the arguments were likely to be similar to the ones deployed when the case is litigated behind closed doors at the WTO.

“What is the core of this dispute is banning all trademarks on the pack,” said Joost Pauwelyn, a leading expert on WTO disputes, who has advised Ukraine in the WTO dispute but said he was speaking in his own capacity.

“Do you really believe that this will stop young people starting to smoke? Will it make it easier for people to quit smoking? The trademark on the pack, is that something that starts people smoking?” asked Pauwelyn.

His opponent, Benn McGrady, a Georgetown professor who has advised the World Health Organization on plain packaging, said Australia had not in fact banned the use of trademarks.

“Trademarks are permitted on these packs. What is not permitted is a trademark other than a word. So for example a sign, a symbol, a color, some other design element.”

Pauwelyn noted the WTO rules on intellectual property said trademarks should not be “encumbered” without justification.

McGrady said the rules set a low bar for justification, requiring only “a rational relationship” between the policy and its objective, and the WTO did not expect explicit proof that plain packaging would improve public health, partly because the results would not be known for years.


Pauwelyn said that, traditionally, trade disputes over tobacco boiled down to the question of whether a government was overly restricting trade to achieve its health goals.

“The big question is, given the health objective of Australia, is the trade or the intellectual property impact of plain packaging really needed, or is Australia going too far without contributing to health protection?”

McGrady said Pauwelyn was mixing up the WTO rules. While WTO members are barred from overly restricting trade in the pursuit of particular policy goals, they are not barred from overly restricting intellectual property rights.

And Pauwelyn conceded that Australia would be within its rights to simply ban tobacco outright, which McGrady said would be much more restrictive of trade.

Pauwelyn said he was surprised to hear that intellectual property had less protection than trade opportunities.

“I always thought it was the opposite, if anything. When you are looking at private rights held by people, they’ve invested a lot of money in this, far more so than trade opportunities. You can’t just take those away. That may be a misunderstanding.”

But McGrady pointed out that the WTO is an agreement between governments and does not confer any rights on private actors.

Australia’s plain packaging laws were based on recommendations in the WHO’s Framework Convention on Tobacco Control (FCTC), which came into force in 2005.

WTO rulings have been guided by similar treaties in the past, since WTO law is not interpreted in isolation, and rejecting the Australian rules would turn that principle on its head, which would be “quite a shock”, McGrady said.

“I tend to think it would be challenging for the complainants in these disputes to succeed,” he said.

Editing by Kevin Liffey

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