Australia wins landmark tobacco packaging ruling at World Trade Organization

Australia triumphed on Thursdayin a major trade dispute over its pioneering "plain" tobaccopackaging law, with World Trade Organization judges rejecting acomplaint brought by Cuba, Indonesia, Honduras and DominicanRepublic.

The WTO panel said Australia's law improved public health byreducing the use of tobacco products, rebuffing claims thatalternative measures would be equally effective. It alsorejected the argument that Australia had unjustifiably infringedtobacco trademarks and violated intellectual property rights.

Australia's law, introduced in 2010, bans logos anddistinctively-coloured cigarette packaging in favour of drab
olive packets that look more like military or prison issue, withbrand names printed in small standardised fonts.

The challenge to it was seen as a test case for publichealth legislation globally, and could lead to tighter marketing
rules for unhealthy foods and alcohol as well as tobacco.

Honduras indicated that it was likely to appeal, saying in astatement that the ruling contained legal and factual errors andappeared not to be even-handed, objective or respectful of thecomplainants' rights.

"It appears that this dispute will require the review of thePanel's findings by the WTO Appellate Body before any final
conclusions can be drawn," it said.

An Indonesian trade official said Indonesia would examineits options. Cuban and Dominican trade officials were not
immediately available for comment.

Australia said it was ready to defend against an appeal.

'Dangerous precedent'

"We will not shy away from fighting for the right to protectthe health of Australians," Trade Minister Steven Ciobo and
Rural Health Minister Bridget McKenzie said in a statement."Australia has achieved a resounding victory."

The World Health Organization welcomed the WTO ruling,saying it cleared "another legal hurdle thrown up in the tobaccoindustry'sefforts to block tobacco control and is likely toaccelerate implementation of plain packaging around the globe."

It said six other countries had brought in plain packaginglaws Hungary, Ireland, France, New Zealand, Norway and Britainwhile another six had passed laws yet to be implementedBurkina Faso, Canada, Georgia, Romania, Slovenia and Thailand.

"A number of other countries are examining the policy," theWHO added.

Vera Luiza da Costa e Silva, head of the secretariat of theWHO's Framework Convention on Tobacco Control, said there wasalready a "domino effect,"with countries moving towardsAustralian-style rules and seeing them as a way towards the"endgame" with less than 5 per cent of the population smoking.

Geir Ulle, International Trade Director at Japan TobaccoInternational, said the decision was a major step backwards for
the protection of intellectual property rights internationally.

"It sets a dangerous precedent that could encouragegovernments 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, nordoes it make it worth copying."

"Tobacco plain packaging is an evidence-based measure thatWHO recommends as part of a comprehensive approach to tobaccocontrol," Tarik Jasarevic, a spokesman for the World HealthOrganization said on Thursday.

Australia's law goes much further than the advertising bansand graphic health warnings seen in other countries.

Introduced in 2010, it bans logos and distinctive-colouredcigarette packaging in favour of drab olive packets thatlookmore like military or prison issue, with brand names printed insmall standardized fonts.

Cuba, Honduras, Dominican Republic and Indonesia complainedat the WTO that the Australian rules constituted an illegalbarrier to trade.

Tobacco firms have said the law infringes their trademarksand that the easily counterfeited packs will encouragesmuggling, although they are not involved in the WTO case.

Tobacco giant Philip Morris declined to comment as it is not party to the dispute.