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It appears from leaked material that the World Trade Organisation (WTO) Dispute Settlement Body (DSB) has dismissed a challenge initiated by Ukraine, Cuba, Honduras, Indonesia and Dominican Republic against Australia’s tobacco plain packaging laws.

Ukraine requested consultations with Australia in early 2012 challenging Australia’s Tobacco Plain Packaging Act 2011, Trade Marks Amendment (Tobacco Plain Packaging) Act 2011 and related laws and policies that have been adopted to implement these laws. 

Ukraine claimed that these Acts are inconsistent with (amongst other things) the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  Indonesia, Cuba, Honduras and Dominican Republic, all of which are large tobacco producers, subsequently sought consultations. Consultations took place in 2012 and 2013.

A leaked draft of the WTO DSB’s ruling has shown that it believes Australia’s laws are a legitimate public health measure, dismissing the challenges.

Dispute settlement panels were then established at which Australia argued that the laws promoted public health by discouraging smoking. In its submissions to the DSB, Australia cited statistical and scientific evidence of the decline in prevalence of smoking since the introduction of the plain packaging laws.

It was argued that “Even if the use of trade marks to advertise and promote a product were encompassed by "use" within the meaning of Article 20 [of TRIPS], the complainants have failed to prove that it is "unjustifiable" for Australia to encumber the use of trademarks to advertise and promote tobacco products”.

A leaked draft of the WTO DSB’s ruling has shown that it believes Australia’s laws are a legitimate public health measure, dismissing the challenges.

However, the DSB’s decision is not final. The WTO Appellate Body has the power to overrule this decision. A spokesperson for British American Tobacco has said that it is likely one or more parties will appeal the decision, although this cannot occur until after DSB hands down the full report in July.

Regardless, this decision is expected to be a great setback to the tobacco industry, as more countries are geared to follow in Australia’s footsteps. Britain, France and Hungary have already introduced plain packaging laws, and Ireland, Canada, Singapore and South Africa are likely to follow.

Phillip Morris International and Japan Tobacco have also argued that this ruling could be extended to the imposition of plain packaging laws for alcohol and junk food. It is yet to be seen if the precedent Australia has set will have such an effect. 

By Nayan Bhathela and Sheree Hollender

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