Indonesia Challenges Australian Tobacco Law in WTO

TEMPO.CO, Jakarta - Indonesia, along with Cuba, the Dominican Republic, Honduras and Ukraine, is challenging Australia's tobacco law at the World Trade Organization (WTO) Dispute Settlement Body. The Australian health law, requiring all tobacco products entering the country to have plain packaging to make them less appealing to smokers, is considered a violation to the General Agreement on Tariffs and Trade (GATT).

Bachrul Chairi, director general for international trading cooperation at the Trade Ministry, said that bringing the case to WTO is the last step that the government could take. "Bilateral approaches that Indonesia had taken have not been fruitful," he said in Jakarta yesterday.

Bachrul said Indonesia sees Australia's plain-packaging act, which was enforced in December 1, 2012, as violating Article XXIII in GATT 1994. The policy is also considered to go against three other WTO agreements on dispute settlement procedures between countries, patents in the trade, as well as barriers in a technical trade.

Although the volume of tobacco export to Australia is fairly small, it is important for Indonesia to bring the matter to the WTO. If not, Australia's policy would be a bad precedent, and there is fear that other countries will join the bandwagon, even banning the sale of certain products.

According to Bachrul, there are already indications that New Zealand and Ireland are planning to follow Australia's steps. However, the plaintiff states are urging them to put their plans on hold until WTO makes its verdict.

"This case is more than just a business dispute, it is a matter of principle in the world trading system," he said.

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